Marketplaces ease the pressure on sellers in reaching a massive number of customers in a short period of time, at no extra cost to them. That means marketplaces offer the chance at a quicker, more cost-effective way to generate sales and avoid the expense of developing your own e-commerce website.
Initiating a marketplace is an enticing and aspirational thought. Yet to succeed in driving a business, professional online marketplace development services are a must. Besides, entrepreneurs must be prepared to resolve the most common problem with marketplace, thoughtfully strategize, foreknow likely setbacks and take the proper perspective on growth.
In this write-up, we’ll cover the marketplace challenges confronted when running a new product and some ideas on how to overcome them. So let's kick things off.
The Wide-Spread Marketplace Problems and Their Solutions
Among the challenges with running a marketplace, one stands out—owners promote their platform. To launch a successful marketplace, enterprises must be prepared to encounter online marketplace challenges and tackle them.
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Challenge No.1: Selecting the Working Development Vector
Selecting the non-working development vector involves crafting a solution that fails to satisfy your brand’s and clientele’s requests. This problem may be alleviated by selecting one of three development strategies that encourage getting your platform up and running swiftly and profitably.
Owners can go with an assortment of alternatives to select from. Some may prefer open-source solutions, some are likely to subscribe to a SaaS solution, or purchase a white-label solution to create their marketplace. Let’s go into little details about each of them:
Plumping for an Open Source Solution
Open-source solutions give non-programmers a path to jump-starting their marketplace in a couple of weeks. A single action you have to take is deciding on the suitable theme and plugins that will match up with your business interests.
If you'd like to test your marketplace concept on real users, this option fits the evolution path. One thing to watch out for, however, is that open-source prospects mostly fall short of producing a custom UI design. Besides, marketplace security can be jeopardized by plug-ins and themes applied.
Subscribe to a Software as a Service
SaaS provides access to its features for subscribers. So, SaaS users can take advantage of its features to advance their business goals.
The SaaS platform makes sound work if you intend to kick off your marketplace in a short period. Yet, opting for this solution, bear in mind that there is a high-fixed fee to be paid for the entire feature set, aside from the number of features you engage.
White-Label Solution Purchase
The white-label product delivers prepared-to-use software with all the functionality required for marketplaces. Your role is to decide the feature set you believe to be the most fitting and implement your branding before setting off.
As opposed to open source and SaaS, a white-label brings the product source code and grants you ultimate dominion over the marketplace. Holding ownership of the source code empowers you to fetch new components and functionality and adjust the venue in the way you see fit. A white-label marketplace would not take long to get started with the marketplace. If an enduring platform is what you're aiming for, this variant is the most reasonable one to choose.
Challenge No.2: Solving the Chicken & Egg Marketplace Issue
Customers or sellers? If you set off a marketplace creation, providing supply and demand is one of the sooner issues with marketplace you encounter. But this begs a question: Who should come first? We will look at a few options below.
Vendor Acquisition First
The absence of vendors and suppliers can make the first-coming buyers turn around and say “goodbye”. How can you retain your earliest customers? Proposing a small financial reward or benefit is among the frequent techniques to besting salespeople over and settling this kind of marketplace model challenges.
Customer Acquisition First
Acquiring customers first and sellers later are trickier. Yet, it is worthwhile in certain marketplaces.
Virtual rewards, such as first-order discounts or certificates for a little number of foremost purchases, may become your helpers in enticing customers.
Both Parties' Acquisition
Acquiring both sides is possible thanks to a properly concocted marketplace strategy and plan. Letting vendors play as sellers and back serve as a way out of an issue with simultaneous attracting two sides. In other words, if vendors can act as buyers. Sellers have shared concerns and support each other.
Being a Producer
If the marketplace owner takes on the role of a vendor, they can build a first-time customer base, and later grow their platform by reaching out to other vendors. Market majors including Amazon and eBay both grew up as vendors, and look where that got them!
Challenge No.3: Low Brand Awareness
Entering the market, newcomer marketplaces may encounter the typical problem with marketplaces not being heard or trusted. Learn what steps to take to strengthen the brand awareness and boost its ranking.
Employ Search Engine Optimization Tactics
It is widely believed that 92% of internet users go no further than the 1st page of Google's search results. Consequently, the marketplace ought to be among the search results on the first page. How to achieve this? The answer is Search Engine Optimization (SEO). SEO is a key practice for enriching brand awareness, promoting your site's standing in search results, and accordingly growing your site's traffic. Once a website occurs on Google’s first page, the platform traffic will go up followed by a multiplication of the transactions over your marketplace.
Initiate Brands Partnership
Marketing gave the world a practice named co-branding. Co-branding can be quite advantageous for handling online marketplace problems. This practice entails partnering with other esteemed brands that share a mutual audience with you. The partnership's purpose is to inspire bright connections of your brand and win the faith and trust among your fellow brand's clients. Such practices can greatly boost brand awareness. Nonetheless, choose your partner responsibly, because the brand's credibility determines your marketplace's credibility as well.
Leverage the Power of Social Networks
Social media is a powerful marketing tool to address problems with marketplaces. They are prime channels for ad campaigns too. Targeted advertising and smart investments can work to attain thousands of people around the world and grow your follower base.
No doubt, social media is a route to building rapid market recognition by founding a business-related community and long-lasting connections with customers.
Challenge No.4: Elevated Rate of Unfinished Purchases
One of the most common challenges in the digital marketplace encountered after launch is incomplete purchases. Users add items to carts and don't make payments. Roughly 70% of carts remain unpaid. There may be numerous reasons, and not all of them are caused by the marketplace's improper operation. Among this considerable volume of causes, cut-rate user experience is a major factor. But we have good news—the issue can be solved.
Integrate the One-Click Checkout Function
A long and complicated checkout process adds to the likelihood of confronting marketplace business challenges, particularly purchase abandonment. To enhance the user experience, streamline the process, and build in a one-click order button without requiring signups on the platform. This will positively impact brand perception and increase customers' willingness to return to your marketplace.
Introduce Multiple Payment Methods
Some deals don't close because the platform doesn't provide the desired payment methods.
Some customers prefer to use payment systems and some prefer credit cards. Explore and analyze what payment methods your competitors are using and add them to your platform. Try to provide multiple payment options to reach your audience more broadly. The lack of preferable payment methods creates cart abandonment challenges in the digital marketplace.
Challenge No.5: Monitoring Vanity Metrics
There are several KPIs to be taken into account when we talk about marketplace success. They include metrics related to marketplace size and shape, liquidity, acquisition, retention & engagement, and unit economics. We have an article published in our blog that goes into all the nitty-gritty details about marketplace metrics.
Consider Celadon Your Trusted Partner
Celadon is a software development company that delivers not only end-to-end web app development services to build a speedy and intuitive marketplace. We do everything that is necessary to bring to market a viable and high-quality product.
After conducting a complete and thorough marketplace niche study, we render marketing services, sets the monetization model, and conduct business integration. We do our best for your business to get off the ground.
In short, we take over your hardships and unravel them.
The only challenge you have to deal with is to contact Celadon and describe your need. Well, actually, it’s not a challenge as such.