The marketplace is a term that everyone knows. From Amazon to Wildberries – successful cases are everywhere. However, there are quite a lot of trading platforms that started to work, but soon closed, failing to reach payback.
The reasons are always the same: lack of demand, unsustainable business models, poor technological solutions, and insufficient marketing. Let’s talk about what marketplaces are and how to launch them correctly.
What is a marketplace?
A marketplace is a unified online trading platform that allows various sellers to offer their services or goods for buyers. There are many types of marketplaces, but all of them are united by a convenient and thoughtful service. The following conditions are always met:
- goods or services are offered by third-party sellers (merchants);
- buyers can purchase goods from several sellers at the same time;
- marketplace processes payments and makes a profit from the commission.
Marketplaces differ by the types of participants (B2B, B2C, C2C), by the products offered (goods, services, coupons, etc.), and by the method of monetization (commission, traffic sale, sale of leads, additional services, etc.).
Marketplaces can also vary in structure: vertically structured marketplaces sell only one product category, while horizontally structured marketplaces sell different product categories. Today, anyone can create marketplace easily with the help of the Scallium.Pro platform. However, the success of your marketplace will depend on many factors.
How to make money on launching the marketplace?
The exact way a marketplace will make a profit depends on numerous factors. The most common ways to monetize your business are the following:
1. Registration fee
The registration fee is a fixed one-time payment that you charge from a merchant for registering on your marketplace. The advantages of this method of monetization are that you start earning even before the site begins to generate large profits. To implement this method, it is enough to use any payment method or even cash.
2. Subscription
The subscription method means charging a certain amount from sellers on a regular basis. This is one of the most convenient monetization methods. But it’s important to give sellers the opportunity to earn more on your platform than the subscription itself is worth. By the way, this approach can be diversified by offering several levels of access to the capabilities of your service (for example, providing more tools for a premium subscription or a lower commission on each sale).
3. Listing commission
When listing items for sale on your marketplace, you can charge sellers a listing fee. This commission can be fixed or tied to the price of the product, its category, and other parameters. However, as with subscriptions, sellers will only be willing to pay a small commission to list items if they are profitable.
4. Sales commission
Sales commission is a great monetization strategy. The more orders your marketplace receives, the more profit is generated in this way.
5. Other methods
In addition to the above-listed examples, there are also marketplace monetization tools:
- payment processing fee;
- sale of advertisements for individual stores and sponsored goods and services;
- creation of your own system of advertising banners.
Choose the one that meets your expectations and proceed to the creation of a marketplace.
How to create a marketplace?
After you have decided on the business model, type, and strategy for monetizing your future marketplace, you need to pay attention to several more key aspects:
- Determine the number of people needed for the future project. Who will be in charge of each function? How will the hierarchy be built? How will the interaction within the team be organized? What will you do on your own and what will you outsource?
- Make a plan that will outline all business processes and stages of interaction with users within the marketplace;
- Use a standardized product catalog. Analyze competitors’ marketplaces and popular search and category ratings. On their basis, create a catalog with categories that are familiar to the user;
- The interface of the marketplace and the structure of the site should be intuitive for the user and the seller;
- Develop a medium-term marketing strategy with online and offline marketplace promotion. Think if you have covered all channels and sources of communication with your target audience;
- Finally, choose a reliable platform on which to build your marketplace. The choice will depend on many factors: goods, services, and functions required by the marketplace (payment processing, logistics, work with returns, recommendation systems). Of course, the budget that you are willing to invest in creating a trading platform plays an important role.
How to choose a platform for creating a marketplace?
In order not to get lost in the variety of platforms for developing marketplaces, you should adhere to the main criteria for choosing a CMS to create your marketplace:
- Popularity in the market;
- Ready-to-use platform adaptation for the local market;
- Functionality;
- Possibility of additional improvements;
- Convenience and ease of work with CMS;
- Resistant to high loads.
Whichever platform you choose, remember that the success of a marketplace depends on many factors. Therefore, it is worth considering all of them to immediately start making a profit from your new trading platform.
