Keep these Questions in Mind to Validate your Marketplace Idea!
Firstly, we want to welcome you to your marketplace entrepreneurial journey. The chances are that if you are reading this article, you have made up your mind to build an online marketplace that will disrupt the eCommerce industry.
The rising number of marketplaces is changing the digital commerce industry. It is also responsible for the rapid development of the sharing economy. The US online marketplace sales will hit a massive $357.26 billion by the end of 2022, accounting for more than 36% of all eCommerce sales. If this is not the right time to hit the hammer, what is?
But how to catch the hype? How to build a booming marketplace to compete with the big fishes in the sea?
Keep reading to find answers to these questions and more, and set your early stages up for success.
What are the Basic Steps to Building a Thriving Online Multi vendor Marketplace?
You cannot just go online and start selling. Building an online marketplace is an intricate process that requires months of planning and execution. We have listed the basic steps to creating a multi-vendor market in a nutshell.
- Think, think, think. Brainstorm with your peers and develop a marketplace idea and validate it.
- Workout your online marketplace business model and pricing levels.
- Work on building your Minimum Viable Platform, which is your marketplace MVP.
- Strategize your initial supply, contact potential vendors and offer them deals they cannot resist.
- Launch your marketplace and sell to your first customer.
- Analyze your key metrics, loop in enhancements and updates, and scale your business.
It is definitely not as easy as it sounds. But these are just steps. The real work begins at the starting line. Thinking, penning down your idea in black and white is the real deal.
As we go into some of the ask-must questions to validate your online marketplace idea, we promise you to come back to the steps to create a successful marketplace business for you in detail in the blogs to follow this one.
For now, let’s get started.
Determining the Potential of Your Marketplace Idea?
A significant benefit of sharing economy is that anyone can enter the industry with a marketplace idea and rise to success. For instance, take the example of Airbnb. It began with a small idea consequential of solving the problem of the founders themselves. But now, it has spread its legs in 99% of the countries worldwide.
So, having an idea is crucial, but here we will show you how you can understand the true potential of your vision.
Q1. Is there a specific pain point you will solve by building your marketplace?
Chesky and Gebbia, the founders of Airbnb, mainly focused on solving their problems. But the twist in the story is that their pain point actually resonated with millions of travelers across the globe. Their solution addressed both sides of the coin: those looking for inexpensive accommodations during trips and those with unused space in their homes and could use some extra income. Now, look at what they have become. Airbnb is currently the leading online marketplace in the hotel and hospitality industry across the globe.
What do we learn from this success story and others like it? The key to success is an elementary idea that addresses the pain points of the masses, consumers, and providers alike. Moving on to our next big topic of discussion.
Q2. How do we define the target audience?
Based on your initial market research, you have to define your buyer personas. These are basically fictional characters based on real-life consumers having the qualities and needs of your ideal customers.
To describe your ideal consumer as accurately as possible, classify them into the following categories:
- Age/sex
- Geographical location
- Education equivalent
- Occupation
- Family
- Annual Income
- Possible pain points
- Interests
- Inhibitions
- Channels they use to shop
These are very generic points. You can add and delete as you go deeper, depending on the type of marketplace you will build. Add more data to understand your potential customer better. You can be catering to several personas at once, or your business can be relevant to a niche audience. You have to study the market and then come to insightful conclusions about your business needs. The more accurate your buyer personas are, the better you can approach your audience with appropriate solutions to their problems and relevant and personalized content.
Unfortunately, not every idea turns out to become a unicorn. Around 42% of the startups fail due to the lack of market need for their products. That brings us to our next question.
Q3. Is there a booming market for your marketplace idea?
Market volume is one of the most crucial factors determining the success of any business. You have to analyze the market while deciding the part you want to target. Consider the geographies, local nuances, vendor availabilities, supply-chain and logistics credibility, terrains, climate, population density, and much more before coming to a conclusion.
Also, not every successful business needs to start with a new genius idea. Sometimes, taking an existing idea and refurbishing and innovating it in your own brand style while applying it to a specific market can be fruitful. For instance, you can start with your local market, where you have a hold and turn an idea implemented in another country into reality in your region. Who knows, you might be able to achieve greater heights than the original one.
But, what is the second significant thing aftermarket volume determining the success of your business? You’ve guessed it right, competition!
Q4. Who is the competition in your online marketplace industry?
In a perfect world, the ocean will not have any bigger fish, and you will live your commerce life without any competition. But reality hits different. Everyone has a competitor, and you must understand your competition if you want to succeed. They say, learn from your own mistakes, but learn from others’ mistakes. Accurate competition analysis will help you overcome existing industry barriers easily and rise to newer heights.
Note your competitors’ advantages, drawbacks, USPs, and limitations, what innovations they are going after, and what you can do better. Play on your strengths and weaknesses. After all, it is a brutal market out there, and ‘you gotta do what you gotta do’ to taste success.
The final question of all, how to jump on the wagon?
How to Build a Multi-vendor Online Marketplace?
If you are looking forward to creating your own successful multi-vendor Magento 2 marketplace, here is your chance to do so seamlessly. Rocket Bazaar is here to answer all your questions and hold your hand through it all. You can build on one of the world’s leading eCommerce platforms, Magento 2, leveraging Rocket Bazaar, a ready-made Magento 2 multi-vendor marketplace platform. Thrive online with a quick-setup, customizable, and user-friendly multi vendor marketplace solution. Contact us to start your marketplace entrepreneurial journey.
