How To Start An Online Marketplace – An Ultimate Guide
What is e-Marketplace?
Online marketplace is a collective of varying scales of businesses selling a wide variety of products. Sellers upload their products to the online marketplace and subsequently make their products available for sale. Basically, sellers serve as facilitators, in return the business pays a certain amount of money to them, depending on the terms and conditions set by the marketplace administrator. Sellers also act as distributors, selling the products which focus on trade. Some sellers may outsource their distribution to third party logistics. Some sellers serve as providers of eCommerce solutions that focus on non-trading activities like collaborative design or people collaboration. These kinds of platforms include a technical based solution that targets at enhancing the trading relationship between companies.
Types of e-Marketplace:
Thanks to innumerable types of businesses, e-marketplaces are of different types. For all intents and purposes, e-marketplaces are divided based on the operations they undertake.
Buyer Oriented e-Marketplace:
As the name suggests, the e-marketplace is run by a group of buyers for establishing an efficient purchasing environment. This helps in achieving the best price from sellers by lowering administrative costs. This can also be used to advertise the catalogues on the buyer oriented marketplace.
Independent e-marketplace is an online platform where a third party is available for the buyers and sellers of a particular organization. In other words, independent e-marketplace is a business-to-business marketplace. By registering under marketplace that is independent, the user can gain access to ads and request for bids and quotations. A payment would be required to participate.
Horizontal and Vertical e-Marketplaces:
Horizontal e-marketplaces connect sellers and buyers across different regions and industries where users can use the e-marketplace to purchase indirect products E.g. Office equipment
Vertical e-market place is a kind of e-marketplace that provides online access to various companies through every possible segment of industry sector such as automotive, chemical, construction etc. This kind of e-marketplace can increase the operating efficiency and help to decrease procurement-cycle time, supply chain costs and inventories of industry sector.
Supplier Oriented e-Marketplace:
This marketplace is set up and accessed by huge suppliers keen in establishing sales channel through the internet for buyers. The product or service can be searched on the platform being offered. More often than not, sellers use this marketplace to improve the visibility to buyers to get the market.
What are the benefits of having e-Marketplaces?
The advantages gained by joining an e-marketplace will differ between businesses and industries. As a matter of fact, the benefits vary between sellers and buyers. Some of the benefits are summarized below.
From Business Perspective:
- Greater opportunities for suppliers and buyers to enhance new trading partnerships, either within their supply chain or across supply chains.
- The e-marketplace operates on a round-the-clock basis which helps to reduce the time constraints and problems with different office hours.
- Provides greater transparency in the purchasing process since the availability of stock levels and prices are all accessible.
From Buyer’s Perspective:
- It is easier to secure the best deal as updated information on price and availability are known.
- The buyer can easily see and compare prices as well as products from a single source instead of contacting different individuals for different products.
- Provides a level of trust for the buyer from an established e-marketplace as they are dealing exclusively with suppliers.
From Seller’s Perspective:
- Both new and current customers can provide regular requests for quotations.
- Provides an additional sales channel for marketing and selling products.
- They can offer reduced marketing costs as compared to other sales channels.
- International e-marketplaces provide a lot of opportunities for the overseas sales which might not have heard about.
What are the ways of creating an Online Marketplace?
There are a lot of software and platforms available, with which you can build an online marketplace. But there are several aspects which you need to consider while creating an online market place.
Mainly there are three ways of building an online marketplace with the help of online market place software:
Use an online marketplace software to build the marketplace from scratch If there is an existing platform or software, you can build an online marketplace using it. Hire professionals or companies to build an online marketplace for you
Each method has its own advantages and disadvantages.
The best method you want to opt for depends mostly on the following things:
The kind of marketplace you are going to build:
The online marketplace software is a multi-vendor eCommerce site, where multiple multinational companies sell products to customers. It is like the site where parents can sell second-hand stuff or a location based marketplace for services or rent. Once the type of online marketplace is decided, you can go ahead with the way you want to create it.
How much you are willing to pay:
Based on your budget, you can choose which online marketplace you want to build. If you are planning to go with a low budget in the start, it’s not necessary to spend much on the hosting, design, development and other things. It will reduce your expense. When you have a higher budget, all the above features can be included or you can pay an established firm to build an online marketplace for you.
Depends on your own technical resources & capability:
If you are a talented coder and have spare time and if you are highly skilled with technology, internet, have experience in owning a blog, you can easily and quickly build your own site with the marketplace software without spending a lot of money on it. The important thing that matters in building a marketplace business, is not choosing the software, but actually making the marketplace idea work both for your providers and customers. That being said, you are required to watch out for the trends. Today, eCommerce marketplaces are built by leveraging MEAN stack. For your information, MEAN is Mongo DB, Express JS, Angular JS and Node.js.
True validation and learning process only happens as soon as you will launch your online marketplace.
Paying an established company to build online marketplace software would be a better option for you. Hosting, automatic software updates, server monitoring, backups and technical support are provided by the provider of the software platform. A technical person in your team is required since there’s always something to do in this front.
Use open source for creating an online market place which is quite important. It may not be possible to hire a developer team and build new features later. By using an open source, they can always move to their own server and continue development.
What is their pricing?
Budget plays a major role in creating an online market place. Always remember not to pay a big amount in the upfront.
How to Design a Marketplace?
The first step in designing a marketplace is to build awareness and understand what the target market opportunity for the marketplace is. The designing of a marketplace is followed by the implementation of all the available tools and applying them into a consolidated platform.
After a detailed analysis, start with the essential aspects such as looking in the participants’ context, their performance pressure, capabilities and goals. Software can help the user further to look in to gains of convenience, access and general value. The marketplaces are designed for connecting activities and resources from a basic level.
Platform design process consists of motivation analysis, ecosystem mapping, and learning and designing the process. After establishing strategy and design of marketplace, the next step is action based strategy building. The customer development leads can assist through the validation phase. Validation phase is known to save money.
Tips to Consider While Creating an Online Marketplace:
Keep these tips in your mind while creating a marketplace for your business:
Gain the basic knowledge about starting an online marketplace:
A basic knowledge about market place helps in creating a better online marketplace. That includes why one needs to build it, why are they booming, etc. Come up with good market place ideas for building a successful marketplace business with thousands of users. Find a market place business model that finance its operations with commission, subscription, listing and lead fee that has featured listings and ads. The online market place idea and business model needs to be validated.
Building a Platform:
Building a platform is all about providing a minimum viable product (MVP) that solves the problem of users and improves the learning process. Copywriting and design matter more, as they clearly communicate the value proposition to users. The online market place can only be successful if it facilitates transactions.
Growing and launching the online marketplace:
Build the initial supply before inviting the customers. Then, learn how to find them and how to make their first experience on the site a success. Once the users are enrolled, focus on healthy marketing and growth.
Trust is the foundation block for every marketplace and this has to be gained between the providers and the customers. Turn the online market place into a community, as most great online market places are a thriving community around the marketplace’s niche.
Key points to consider while growing your own Online Marketplace:
- Customise the market place and add third party plug-ins
- Personalise the domain with unique brand and logo
- Bring your own payment partners such as PayPal or Stripe
- Powerful admin controls, performance functions, and dashboards
- Access to Google Analytics, Facebook Pixels, and SEO tools
List of the Top 5 Marketplaces in Today’s Time:
Here are some of the top marketplaces people are using in today’s time, have a look
This is an eCommerce website that focuses on vintage, handmade and novelty items and other goods such as clothing art, craft and various other things. The site was launched in New York City in 2005. Etsy has proved itself as the go-to marketplace in the tradition of art and craft fairs where students, housewives signup to get an income.
Amazon is the largest internet based marketplace in the US which sells everything from toys to food, electronics, and furniture. It was launched in Seattle and the marketplace has made a mark into selling software, cloud infrastructure services, and multimedia products. It also includes digital content such as Amazon Games and Amazon Music, an online store for original and limited edition fine art pieces in Amazon Art, the internet video-on-demand. Now they are active globally and have become number one in several countries.
Bonanza was launched in 2007 followed by many awards and recognitions. It gives opportunities for entrepreneurs and small businesses to create an online business easily, without any obstacles as a beginner. They are an expert in the selling and buying of items like collectibles and novelty items, hard-to-find books, videos, music and records, jewellery, stamps, and sports and other memorabilia.
Rubylane is the largest curate marketplace for art, antiques, vintage collectibles and fashion. Some of the inventories include antiques, fine art, furniture, lighting, glass, and jewellery.
This provides the facility to shop and sell on eBay, where users can create an account for free. The buyers need not pay money for browsing through the items on the marketplace, but there is a charge for sellers if the sellers intend to list their items. eBay is known for its auctions.
What is Marketplace Software?
Marketplace Software is an eCommerce platform which allows all the business owners to develop their own online marketplace from the scratch. One can easily manage marketplaces with state of the art software with full efficiency. The software supports a wide range of online businesses – from start-ups and small web shops to large shopping malls and even multi-store marketplaces. Marketplace software is multifunctional, flexible and easy-to-use. The software offers all eCommerce essentials and plenty of extra tools to provide shoppers and the vendors with a new, more engaging and rewarding way to make purchases and interact online. Complete eCommerce marketplace software offers fully integrated functionality which lasts the entire spectrum of the transaction from browsing through delivery, including but not limited to inventory management, analytics, and financial reporting.
Different kinds of Online Marketplace Software:
It’s important to have a look at the different kinds of online marketplace software so that you can choose the best one for building your marketplace.
An eCommerce Platform:
To build a marketplace with eCommerce software or an online shopping ECommerce turnkey platform is to come up with such an online place where multiple vendor business activities will be fostered.
Some of the most popular eCommerce platform:
- Magento: Costly to purchase, but powerful and has got higher flexibility comparatively.
- WooCommerce: Utilises the extremely popular WordPress platform which is built-in less functionality than Magento but simpler to work.
- Shopify: Shopify is a SaaS platform that is less flexible but could be a cheaper and simple way to get the work done.
A Generic Web Application Framework:
To build a platform using a generic web application framework, a plenty of libraries that can help with specific aspects such as dispute management, coupons generation, drop shipping facilitation, etc. need to be considered. Marketplace functionality built in has to be developed. A generic web application framework gives you maximum flexibility to build things in a desirable manner but can also be the most expensive.
Some of the most popular frameworks at the moment are Ruby on Rails, Django, and Meteor.
A Specialist Marketplace:
The platforms tend to provide support to many types of the marketplace that give functionality correspondingly. The marketplace may or may not be the one that meets your needs. If the marketplace meets your user requirements, then this could be a cheap and fast way to get a marketplace up and running. It can be expensive and difficult to build since very few of the developers use this platform and are familiar with it.
WordPress is an extremely popular open source content management system (CMS). This has a huge, inexpensive developer community. This is being used by WooCommerce but, it’s not quite popular when it comes to designing because of its poor coding. Still it can provide a lot of flexibility and other useful functionality.
Most recommended online marketplace software service is GenStore’s software. The user can configure, create and launch the site in one day, without having any technical skills. GenStore provides hosting, handles all your technical issues related to maintenance, installation, software updates, etc. all in order to build a great user base. 30 days free trial feature is available and after that, there is an affordable monthly fee.
Factors to Look Out While Choosing the Marketplace Software
There are several factors to consider before creating marketplace software and choosing a marketplace platform provider, as it has a huge impact on the strategy, business, and investment that requires lot of effort.
Some of the factors that help to choose the right marketplace platform are:
Before choosing the right cloud marketplace platform, the experience has to be considered. The more the experience, the better would be the product. Another factor to be taken into consideration is reviews. The experience faced by the other users can also help in choosing the right one.
Procurement & Billing
The user has to make sure that the marketplace allows to the source, provide and procure the infrastructure as software as a service (SaaS), independent software vendors etc. The service should have the ability to set billing rules for the customers to subscription terms and paying systems.
Make sure the platform has the ability to manage the customers, partners, sales organizations with customized dashboards, reporting tools and worksheets. It has to provide role based access to several users.
Make the right choice of a marketplace where there would be an opportunity to become the trusted advisor for your customers. In future, it has to provide a right choice from location, price to the customers. It has to enable on boarding of new suppliers and vendors that increase market opportunities.
Most Renowned Marketplace Software – GenStore Marketplace Software:
GenStore is our turnkey software that helps users builds their own marketplace. Genstore is an eCommerce platform which is used by several top firms like IBM, Facebook, Google, etc. GenStore is an open source Node.js commerce platform & a multi-vendor eCommerce marketplace build on MEAN stack (MongoDB, ExpressJs, AngularJs, and NodeJs) that has a highly scalable robust eCommerce platform with detailed documentation and quality code.
GenStore has integrated Facebook messenger bot, where the customers want you to be within their Facebook messages. The customers can search for a product, track and place an order and get answers to all their inquiries. With a single click, all this happens inside a Facebook message window. However, there is no need for a manual intervention to control or manage these activities. GenStore takes automation to a new level.
Features of GenStore:
- Product Selling, Rentals, Services: GenStore supports all types of marketplaces and has built-in availability management for bookings & rental.
- Manage your Marketplace: Manages and moderates marketplace easily from the admin dashboard. Connects Google Analytics to get a detailed view of what is going on.
- Robust Administration: Dynamic design to manage everything from the back end for its user management, account management, content management. Everything is automated to be dynamic.
- Dispute Management System: It easily handles all the disputes between the seller and the user regarding payment and other issues.
- Digital Product: Has two different marketplace niches on single software that gives your sellers the option to sell both physical and digital products, according to the type of product.
- Unique Seller Dashboard: Gives the sellers a separate dashboard to manage their products and orders that manage profile, uploads products and its approval status, order and shipping status from responsive seller dashboard.
- Revenue Channels: Offers multiple revenue channels, seller subscription, banner ads, prime delivery options, commission percentage against each sale, and much more to generate easy revenues.
- Compatible with iOS & Android App: Helps your users manage everything with just a mobile in hand to search through the collections, making an order, tracking an order all can be done with Android & iOS apps.
Other Products offered by ShopyGen
ShopyGen offers three other products which are Mobigen, Gencart, and Gentack.
Mobigen is a ShopyGen’s product that offers intelligent mobile eCommerce solutions. Mobigen can be used to start a mobile marketplace business in any niche such as creating a market place for pet stores, real estate, buying/ selling goods, second-hand goods and coupons online.
Features of MobiGen:
- One Click Product Upload: Simple product upload method. A single click uploads the product with a snap, fill details and upload.
- Seller or User App: One App with one registration. The access is all under a single login and single mobile app.
- Reviews & Ratings: The product has got good ratings and reviews by users.
- Revenue Channels: Two revenue making strategies are integrated. Subscription model and featured listing for consistent revenue.
- Payment Gateway: Takes your business across the world. Users can use the app easily to shop using PayPal payment gateway.
Gentack is a used to create service marketplace software online. Real time helps you track the location of the service provider. To track the provider’s location and estimated time of arrival, Google Map is integrated into the software. For posting a job, you can directly select the service providers you want, looking at the list of service providers, available in your locality. Gentack as a service provider recommends the jobs you can take on top which are available in your locality.
Gentack uses the cutting edge technology called LAMP which provides security, scalability, and performance of the application. It’s integrated and tested several rounds of User Acceptance testing. Native mobile apps for iOS and Android are part of the package and the special part here is you get both separate app for the users and service providers on both platforms.
Features of GenTack:
- Request On-demand: Few business ideas require quick response from the service provider when there is a demand for it. In case of Uber drivers, they will have to quickly respond to the demand of a booked ride by customers. For such applications, Gentack allows on demand service.
- Bidding Algorithm: This amazing and fast feature is in built with state of the art programming. Gentack can enable the providers to bid on gigs on the platform. This feature is designed to help both users and service providers where the users can look at each bid and choose the best.
- Facebook and Other Messenger Services: The integrated Facebook Messenger BOT, your users can chat and inquire anytime with the bot. The Messenger service eliminates the human resource on customer support which can give recommendations for service provider and informs and tracks the users about service requests.
The online grocery marketplace is slated to become the next big thing, but the most important question for visionary entrepreneurs is: How brilliantly and quickly they can grab the opportunities in this undiscovered markets. Gencart clone plays an important role to help you build your grocery marketplace business. That too at an unbelievably economical cost, you can get amazing new features exclusively developed for the needs of grocery delivery marketplace.
The administration panel is easy to use and a powerful feature of Gencart. Grocery delivery marketplace can also be used as food delivery script. Admin Panel can help you create stores and under each store, you can upload product information, manage product inventory easily. Stores will have a Zip code or Pin Code entered by the site owner and with this dynamic admin panel, you can have a complete control over your business.
Features of GenCart:
- Location Based Algorithm: Gencart has developed this feature for quick delivery of grocery, and with this feature, there will be a display of products based on location. This feature is built on a special location based algorithm. You can also easily control and monitor different activities in your business through this powerful Dynamic Admin Dashboard adding and removing shoppers or products are just a single click.
- Order from Multiple Stores: The admin creates multiple stores for the local shops and it will list the products available in those shops. Gencart is the one of the best Instacart clone script available in the market.
- Payment Gateway Options: Gencart gives you the option to accept payments globally and it’s all hassle free with Stripe Payment Gateway. The customer can also integrate alternative payment gateway like Braintree or PayPal for your business.
- Discount Coupons: Discount Coupons are an effective and persuasive method to drive more sales. This enables you and other brands to provide discount coupons to the customers.
- Delivery Management: Gencart helps you to assign an order to any delivery personnel in a given area based on pin code or zip code to get the order delivered.
GenStore market place helps you build an online marketplace in a matter of minutes with marketplace website builder and other products provided by ShopyGen such as Gencart, Gentack, and MobiGen. They have got a super quick setup that creates a marketplace in a matter of minutes which does not need any other online marketplace software and developers. They take care of the technology.
GenStore creates a marketplace website exactly the way you want it to look with simple customization. It helps the customer to build their own concept, with their own brand. Easy to monetize that charge a transaction fee from merchants.The marketplace software is open source and there is no lock-in and it is highly secured. The data and codes are given to the customers. For all intents and purposes, customers can do away with security concerns.
If you have any doubts or concerns, feel free to drop a line or two in the comments section. I shall reply in a day or two. Keep watching this space to know more about online marketplace software. Subscribe to our newsletter which would keep you abreast of marketplace software. My best wishes are with you and your online store. Cheers!