It is not surprising to know that all globally-known online marketplace companies started with a simple store with a single chair and table, with very few employees to work with. Traditional marketplaces were the norm with the primary intention of cutting down costs and keeping it simple. In this sense, starting and sustaining a marketplace business was a difficult task. It was hard to keep an eye on the performance of the business and analyze the income. Satisfying customers’ needs was yet another challenge. With customers’ demands increasing by the day, the number of challenges kept growing too.
Today, the picture has changed with virtual marketplace solutions. By taking full advantage of the internet and other emerging technologies, entrepreneurs have made it possible for customers to enjoy a frictionless buying/selling experience.
However, technology does not fix everything. Starting an online marketplace is challenging as it requires handling buyers and sellers at the same time. Here’s a list of some of the challenges with possible means of tackling them.
Identifying your customers
When you create a marketplace, you should ensure that you provide a useful service. Otherwise, your marketplace will not be successful in the long-term. A lack of understanding of the needs of your target audience may result in an unsuccessful marketplace that will not last long.
That is why defining the larger part of your target audience is vital. Though the needs and issues faced by different consumer groups will vary, make sure that you think through and include a comprehensive list of all possible issues and services. For instance, if we consider the vehicle trading industry, users who want to purchase new vehicles might have specific requirements and face different issues than those who want to go for used vehicles.
Involving both buyers and sellers
As soon as you start your business, you will want to attract as many users as possible. For this purpose, you must build strong relations with sellers who are ready to put out their products for sale on your platform. To build a large customer base, one needs to create a demand for the products offered by the sellers. Also, users must be willing to buy from these sellers. So, both sellers and buyers go hand in hand. To get customers, you should have a good number of sellers and to attract sellers, there must be customers who are willing to buy the sellers’ products.
To tackle this unique conundrum, you can start by targeting a small geographical area and finding the sellers in that region. Post gaining a bunch of sellers, give them genuine reasons to join your platform so that they might become interested in selling and trust your online marketplace platform eventually. When you get a stronghold of one region, slowly move to other regions. However, this should be done after getting a stable base of loyal buyers and sellers.
Earning trust from your users
Trust is one of the main factors that will decide the success of your online marketplace. Though building relationships with your users can help you earn their trust, a trust deficit is highly likely at least in the initial stages come up. This will directly affect the conversion rate on your platform.
The solution to these problems lies in scrutinizing the sellers to be away from potential scammers who will only disappoint the buyers. A transparent peer-review system should be implemented to achieve a level of trust with your users. Verifiable third-party reviews will encourage new customers to try your online marketplace platform.
Experiencing drops in conversion rates
When you start an online marketplace platform, you will have a stable base of customers and buyers. However, you might face a sudden plunge in the conversion rate. One of the most common reasons for such unexpected drops and consequent low conversions is because your marketplace platform is not attractive to customers. This problem can also arise if users can’t find the necessary information on your platform.
To overcome this obstacle, it is vital to give special attention to your UI and UX design because there is no use if you are getting traffic on your platform but there is no conversion. Your online marketplace must be engaging and responsive. While usability is one important aspect to take care of, you should also ensure that information is easily accessible by customers.
For this purpose, you should devise a unique design strategy and use personalization techniques to make a seamless user interface. Integrate filtering options into your design so that customers can easily filter and find relevant items without wasting any time. The admin panel is another component that should be customizable for both buyers and sellers as per their needs.
Building a successful online marketplace platform can be a Herculean task but startup enthusiasts and entrepreneurs can have a smooth sail if they are well-equipped with the necessary knowledge and tools to build one.
Taking a user-centric approach and visualizing the buy/sell cycle can help you create an efficient platform. All you need is a well-crafted methodology to analyze, isolate, and solve the bits and pieces of the journey keeping the customers at the center of your business goals. This will help you develop, test, or even add any new functionality in your application, ensuring continuous retention and growth of revenue.
Don’t you want your online marketplace application to be a cash cow for your business? Drop us a line to develop the next big online marketplace! Let’s help you embark on your journey towards success.