Online marketplaces: 7 tips to grow your marketplace website

Grow your Marketplace

1. Use widely trusted payment gateways
Using a popular payment gateway will immediately establish trust in (for) your marketplace users. The goal of online marketplaces is to enable business between two parties (buyers and sellers) and it can only happen after both parties build trust with (upon) each other. A widely accepted payment service provider (PSP), preferably PayPal or Stripe appeals to users. PayPal has over 137 million active accounts in 193 markets and 26 currencies around the world while it processes some 8 million payments every day. Both PayPal & Stripe offer split payments; a major requirement for online marketplaces.

2. Use ESCROW
It is important to hedge risks for sellers; Escrow is the safest way to transact as it removes risk from online transactions. Money is held by a third-party on behalf of the transacting parties.

This is the next step for growing (to grow) your marketplace into a credible app that the sellers actually get paid after they deliver goods/services. You have two options to use the escrow services, these are:

  • Develop your own escrow [Don’t forget the inherent costs such as legal, accounting, and technical]
  • Integrating a third party service, such as (popular escrow services)

3. Encourage interaction between buyers & sellers through advanced marketplace features
Make it interactive for buyers and sellers to ask for more information from each other. This can help both parties communicate more frequently. Provide background information such as similar products, other products for product marketplace, or past projects completed or posted in case of a services-related marketplace. It helps them to know about each other and find the best product or services, provider. The key here is providing the other party's context-rich information without the 1st party to make much a lot of efforts.
Take a leaf from popular social media platforms such as LinkedIn and Facebook. LinkedIn sends emails/messages encouraging people within each other’s network to congratulate on work anniversaries, skills and other activities. Similarly, Facebook makes yearly photo albums and videos of close friends and post these on their timeline. This not only encourages interaction between both friends but also increases the average time spent on Facebook. Though your marketplace is not a social media platform, most good ideas are borrowed from other disciplines. Just tailor these ideas to your context through your development team.

See a couple of examples here…

Vivid UI, encouraging users to make contact and communicate
Image Courtesy: kkooee.com User Profile

[kkooee.com is an engineering marketplace designed, developed, and maintained by Softicks.com for engineering consulting firms to hire engineers online] Read Case Study for more details
Design plays a key role for users. A vivid UI “Contact” and “Make an Offer” buttons are encouraging the buyer to contact the service provider when needed. It leads to fulfilling user experience.

4. Make the Workspace Intuitive
Nothing helps more than giving offering a user-friendly workspace, especially for buyers. The buyers appreciate vivid information and a simple process to place an order.

Make the User Interface (UI) of your marketplace as attractive as possible. Try to decrease the number of steps involved in a typical transaction process. This will improve the User Experience (UX) and the users will enjoy their time spent on your website; ultimately better retention rate. Brainstorm and simplify the user's journey for the activities they will perform during the processes of buying or selling.

The important point here is to consider the user's context and target the seller’s expertise in designing a logical workflow. Create multiple user stories, scenarios and cases (completing the profile, adding products and services, and communication flow) to develop an efficient user flow.

5. Invest in Mobile App for the marketplace

Offer mobile apps for users to stay in touch with their account activity on the go. Build your mobile apps using native or hybrid technologies. It depends on your budget, a number of active marketplace users, and future plans. The choices are:

  • Hybrid Apps: A budget option for marketplaces with small to the moderate user base. Technologies to use: Appcelerator, Ionic framework, PhoneGap, or Apache Cordova.
  • Native iOS and Android apps: 30% - 40% more costly, yet nothing beats a native app in action.

6. Bake virility into your marketplace the
Virality is the condition or fact of being rapidly spread or popularized by means of people communicating with each other, especially over the Internet.

If your marketplace app allows being shared/distributed without your direct involvement, it will have a snowball effect with each additional user it attracts (usually by enticing users to share your offers and invite peers to sign-up for your marketplace to purchase products/services or become suppliers).

Consider the Dropbox example; it offers the users to send referrals and earn a 30 GB additional space and referrals signing up through the invitations are also entitled to a free bonus of 20 GB space. Virility can make your marketplace a self-operating promotion engine.

7. Focus on quality sellers first
Supply and demand go hand in hand, but without quality suppliers (product sellers or service providers) you won’t sand the chance of attracting buyers. Before you start lining up the suppliers on your marketplace, just don’t ignore the fact that genuine demand needs to exist for the problem you are trying to solve. Identify demand first, and then work on a clear plan to attract supply. To test your business case, you need to be sure of the demand side but building your platform requires that you start with the suppliers.

Sometimes you’ll go back and forth as to whether you should focus more on buyers or on the supply side, observes Dan Beyers of The Washington Post. This is perfectly fine until you are sure about the value proposition of your marketplace.

Key Takeaways: You are growth ready when buyers and suppliers trust each other and the marketplace, payments are risk-free. It is ensured through escrow, and both parties can communicate easily. Intuitive design and simplified workspace are must-have features to retain both parties. Mobile apps help increase immediate communication and boosts sales.

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