Difficulties Of Starting A Marketplace Platform

Are you ready to start your own marketplace platform? You may want to think again. If you have conducted your research, you understand how much work it really is. If you are new to the marketplace space, I highly suggest you conduct some research before jumping right into it. The great thing is there are plenty of marketplace providers that can assist with launching. However, it is important to weigh both options as you may need certain functionality that is not offered. Take a look at the points below to help understand the difficulties of starting a marketplace platform.

Starting From Scratch

If you truly understand the marketplace model and all the technology that goes into building one, this option is for you. Oh and more importantly if you have the time to do so. Starting from scratch is an uphill battle from the beginning but it can be done. However, with plenty of marketplace providers now, why try and reinvent the wheel? Don’t waste your time doing something that has already been done but rather working with a provider. If you decide to go the route of starting from scratch, keep in mind the following things along with the hassle of maintaining those as well. Oh and don’t forget once your marketplace is built, there may be bugs you or other issues you may come across. Do you have time to take care of those as well? You may want to reevaluate your choices.

Working With The Wrong People

Starting your marketplace all starts with working with the right people. Is your team knowledgeable and easy to work with? Nothing is worse than working with stubborn people who are not willing to lend a helping hand. In every office, there are a few choice people you may not necessarily get along with but are forced to do so. That can all be avoided from the beginning if the right people are hired to join your team. Let your whole team meet new applicants and ask for their opinions. Do they see themselves working with that person or fit with the current culture? After all your team is the one who will be working with them on a daily basis.

As you assemble your team, look for those who are eager to learn and make improvements. Who is willing to take that next step in their career or even in their current job positions? Keep in mind your marketplace is far from complete once it goes live. Your team members must be willing to maintain and constantly look for improvements to take your marketplace to the next level. Whether that is with design, speed, SEO, or keeping your listings appealing. If your site gets dull to the eyes or the UI is confusing, you will quickly lose customers.

Shipping Models

The whole idea of creating a marketplace is to work virtually and not have a need for an inventory. Having a warehouse full of supplies and goods is the way of very traditional e-commerce platforms. With multi-vendor e-commerce models, a personal inventory is out the window. The issue then arises how do your customers receive the items with multiple vendors? How can you trust they will handle the transaction on their side of things?

A great way to put that to rest is the popular way of “drop shipping”. For those who are not familiar with the term, it is essentially a method for the marketplace not to keep inventory and orders are transferred to wholesalers, retailers, or manufacturers to process the order. If your marketplace is a part of this popular way, you must ensure you are working with the right people to get their orders completed. If something goes wrong, you will be the first to hear it from the customer as they are under the impression you are sending it out, not your partners. If you want to take a different route, you can create a secure shipping channel within your marketplace. This can all be done on the backend to process and ship orders correctly.

Supply And Demand

Creating a supply and demand is tough for any new marketplace. The great thing about a multi-vendor model, there is no need for a warehouse of inventory. Your focus must be shifted towards finding the right vendors to work with and building the supply side up before the demand gets out of hand. While it’s a good problem to have when you run out of inventory (meaning people are using your marketplace), it also has negative effects as people will look elsewhere for their needs. It’s important to have enough vendors that are trustworthy and deliver as promised. If a user has an issue with not receiving their purchase, you will be hearing it from them even though you are just the middleman. Your vendors are a direct reflection of your marketplace so don’t let them hurt your reputation.

Take your time as you look for vendors who are interested in partnering with your marketplace. Ensure they have a track record and prove to be a reliable source. Don’t settle for anything less than what your expectations are set for. You are the marketplace owner and understand what needs to be done.

Payment Gateways

Just like the saying goes, “money makes the world go round”. If you are not getting paid in a timely manner, there is a serious issue going on. Payments must process and the marketplace owner and vendor must be paid as soon as the order goes through. The customers must be charged as well to ensure it reflects correctly on their bank accounts. If any other issues come up, you must be sure to correct them as soon as possible. As a marketplace owner, you are responsible for what goes on. Does your marketplace integrate with companies PayPal or Stripe? Create an easy to use payment gateway for your customers and it will make your life a whole lot easier.

Multi-Vendor Marketplace Platform Provider

As I mentioned above, “Why try and reinvent the wheel?”. There are many multi-vendor marketplace platform providers that can offer you the customizable solution you may be searching for. With various price points and needs, providers such as Near Me, Arcadier, and Sharetribe are great places to start when looking. Whether you are a more serious entrepreneur or looking for more of a hobby based marketplace, these providers can help answer your questions.

Opting for a platform provider has many benefits as everything on the backend if covered. No need to worry about developing the code, customizing features, integrating payment gateways, shipping models, and keeping the platform up-to-date. With all of this off your plate, you are able to focus on building your business and taking it to the next level. Build your client base, focus on sales, and up your marketing game. This is where your business really needs your attention to help become the “go-to marketplace” in your industry. Platform providers help make your life easier and do all the tedious legwork you dread to do.

 

Are you looking to start your own marketplace platform? Take a look at our section on Marketplace Platform Providers to see what options you may have.

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