7 Rules for Building Successful Online Marketplaces
Online marketplaces aren’t new. They have been around and have been a part of the e-commerce ecosystem for a while. But they are getting more and more dominant by time. The reasons behind this seem to get clear even without a deeper look. Online marketplaces are flexible, they offer more added value to the customer, they offer a chance of competition and presence to the retailers and as in the purpose of this article, they let more innovative business models to be applied.
Up until now, we (as in humanity) have seen sharing economy platforms, starting with the ones that let people sell their unused or used stuff. We have also seen reservation sites that connect travellers and hoteliers from all around the world. We have even seen platforms for people who want to rent their houses partially or as a whole.
Every day we see a new platform trying to take a new approach to e-commerce. Some of them fail, and some prevail. In the habitat of e-commerce even failures don’t go in vain. It’s important to look deeply in failures and success stories to understand what makes an online marketplace successful. What drives them to the top. What makes them tick. In this article, we’ll try to do that. We’ll talk about 7 rules for successful marketplaces.
Create Added Value
Almost every craft or trade starts with addressing a necessity or a demand. But after a point, they need to evolve to something more than that.
Booking.com was successful because it addressed a need. Travellers wanted to be able to reach out to hotels from all around the world and hoteliers wanted customers. It addressed both parties’ needs. But AirBnB took the same idea, then created added value. They addressed people who wanted to travel in a more affordable and cosy way.
Today AirBnB prides itself not only for selling accommodation but also for providing an experience. They even have an individual category for travel experiences that you can check out here. One can shape or distort the hospitality industries of whole countries while the other attracts attention for affecting rental prices in the major cities of the world.
To be a success story, marketplaces not only have to address a necessity. They should offer an added value, an innovation if you will. By doing the same thing that the previous guy did may carry an online marketplace to a point, but e-commerce customers will demand added value at some point.
Provide Benefits for All Parties
The idea behind Uber was simple: Some people have cars and spare time that they don’t use to the full, while some other people occasionally need a lift. Uber provided people with cars and spare time a means to use them efficiently and make money at the same time. And provided a lift to people who occasionally need it.
Other, more direct kind of sharing economy platforms do the same. eBay, Amazon and other similar platforms started by providing a means to people who have too much stuff that they don’t use. These sharing economy platforms provided a means to sellers to make a bit of money over items that they don’t use or need anymore and buyers a platform to find fairly priced, delicately used items. It’s a win-win situation for everyone. So why wouldn’t it become a success?
Online marketplaces have already expanded the application fields of sharing economy. There are sharing economy platforms which bring together freelancers from various disciplines and possible employers who need stuff done. Freelancers “share” their abilities and workforce while employers share the job they have.
While there are many e-commerce platforms around that aims to gather around all kinds of vendors that are selling all kinds of stuff, online marketplace platforms can specialize and go vertical. And the ability to focus on the right niche is a very good way for online marketplaces to become a success story.
The number of online marketplaces and sharing economy platforms may be a clear example to this. There are freelancer platforms which connect designers and people who need designing jobs done. There are platforms for students or newly grads. There are also e-commerce sites that sell products or equipment specific to a single profession or a hobby. Like the e-commerce platforms that only sell survival gear for “preppers”, or the ones that sell LED lighting equipment or drones and drones parts. If there’s a specific demand, a successful marketplace can always thrive by supplying it.
While global e-commerce platforms become giants, marketplaces have very good opportunities to act locally. With the widespread use of mobile devices, more specifically smartphones create valuable opportunities for online marketplaces that are eager to offer geographically relevant services. Global e-commerce giants like eBay can help you acquire a wide variety of goods, but they cannot send a plumber to your location. Although they reshape e-commerce, there are huge local gaps that global giants cannot fill. Online marketplace platforms can take advantage of these gaps. And the ones that did, became success stories themselves.
Don’t Neglect Your Suppliers
We have previously mentioned that successful marketplaces are the ones that create added value for all parties included. While the customer is always right, successful marketplaces realize that suppliers are customers too.
Online marketplaces, sharing economy platforms, almost every e-commerce platform except single vendor suppliers act as a mediator between the supply and demand. They need both to exist. While protecting the end-user is a good approach in trade in general, marketplaces that hurt or scorn their suppliers are destined to fail.
Successful online marketplaces are usually good at focusing on their roles as a medium, don’t take sides and try to protect both the customer and the supplier.
Seek Opportunities to Grow Further
While going niche and vertical is good and provides opportunities, this shouldn’t mean that e-commerce or online marketplace platforms should be blind to other kinds of opportunities. Many e-trade giants like eBay and Amazon started their life as sharing economy platforms and evolved into marketplace platforms. eBay even has a condition specification guide to help sellers specify the right condition of the items they are selling. Alibaba was meant to offer people around the world a platform that they can reach Chinese mass suppliers. Then they have seen the opportunity and created Aliexpress to offer the same thing to the end users.
Online Marketplaces are Easier to Create Today
The creators of the first examples of successful online marketplaces were usually developers or people with a technical background who had a good idea. Some of them even handled the legwork and kept pushing in the field of programming and software while struggling to thrive their businesses. Today much more than they ever achieved in their startup phase is readily available.
There are companies out there, companies like Solvea Tech, which are very good in technical aspect and eager to serve people who are willing to venture into the field of e-commerce. Nowadays you don’t need to be a software genius to become an e-commerce success story or even a global giant. All you need is a good idea, a good opportunity and an innovative way to present it.
The possibilities are endless. Solvea offers software solutions tailored to your business model and can even offer solutions that can expand your business idea. So the question comes down to “Are you the creator of the next Amazon?” Is your idea that good? Is the opportunity you have realized is that valuable? Well, what are you waiting for then? Just bring the idea and the business model and let the experts in Solvea handle the rest!