In this guide, we will cover prerequisite to start a marketplace, how to start an online marketplace, when its the right time to start and many more topics related to an online Marketplace. But first, let’s understand
What is a Marketplace?
An online marketplace is a shopping platform where:
1. Store admin generates revenue via seller commissions and subscription fees.
2. Third-party sellers get a wide exposure and offer products for sales.
3. Buyers buys goods/ services from multiple vendors.
A regular or a simple e-store is different from an online marketplace as in a single eCommerce store buyers purchases from the store owner directly. A small online store has products and services of a single brand.
Why you should start an online Marketplace?
Wide Variety: One of the main benefits of a multi-vendor Marketplace is that it allows the consumers and sellers to get access to services and goods more easily.
Zero Inventory Management: In a Marketplace, the store admin doesn’t need to have an inventory to run the marketplace. It allows the owners to grow the business and earn huge profits through multiple channels like commissions and membership plans without even worrying about inventory management.
Global Reach: Marketplaces with a wide variety of products to choose from have a large customer base already. Selling on the marketplace will help the sellers to gain massive recognition and boost their sales.
Traffic Increases: Marketplace is a common platform for multiple shops. Multiple shops with their wide variety catch the customer attention which results in more traffic as compared to individual sites.
To build a marketplace, a store owner needs to have a clear understanding of the market, users, their requirements, a ton of extra capital and solutions.
Few of the prerequisite to start an online Marketplace are:
Research your target market:
To build a successful Marketplace, it is very important to understand the target market size, identify the users, the needs of your users and solutions the users are looking for.
Establish the budget:
Starting up an online Marketplace and eCommerce store both require almost the same amount of funds. One of the main advantages of Marketplace over e-store owner is that in the online marketplace you don’t need capital for inventory.
Focus on Outcome:
Don’t forget to focus on the outcome of the multi-seller marketplace. Always keep a check on your aim. Make plans to achieve your aim in the most efficient way. Ask yourself, how your online marketplace adds value to the market it services.
Nowadays, there are different ways available for building the marketplace. One can mainly build a marketplace in 3 ways:
- Saas based model
- Self-hosting model
- Develop from scratch
Out of these above ways, Saas based model is the fastest way to launch the marketplace. It excludes the technical development from the store owners. It does not require any server maintenance or hosting charges. For the eCommerce store owners, multiple multi-vendor plugins available can easily convert their online store into an Amazon-like Marketplace.
A similar type of the Marketplace addon is offered by Knowband. The Multi-seller Marketplace module can convert the store the online store in a few simple clicks. Knowband offers a simple mobile app for both Android/iOS users. Having a mobile app for the store will enable the customer to explore the store their smartphones. Having a mobile app for the store will benefit both store owners and buyers.
Thus online marketplace sites bring more audience and offer a wide set of the features, products and services that lures the consumers to stay on a site.