What is a Marketplace Website?
A marketplace website is an intermediary platform that connects buyers and sellers across the globe to transact with each other. Sellers can list and sell their goods or services on the platform, while buyers can choose from many options available to them compared to other means of shopping. The most common examples include Airbnb, Uber, Etsy, or Alibaba, where individual sellers like homeowners can sell their homes to home buyers, drivers can offer paid drives, handicraft businesses can sell handmade items, and eCommerce businesses can sell items at wholesale rates. For a deeper look at how Amazon and Alibaba are shaping the future of global B2B eCommerce, check out our Amazon vs Alibaba B2B eCommerce comparison.What are the Benefits if You Build a Marketplace Website?
An efficient platform for vendors
Marketplace websites can prove to be very efficient for vendors across different industry verticals. Its functionality helps the sellers to conveniently carry out their operations, connect with their customers, and offer a common means to list all their products on your marketplace website.Open multiple revenue streams
If you build a marketplace website, you don’t just charge for letting people sell their services but can also include other monetization models. Some of these include listing fees, subscriptions, commissions, advertising, and additional services you can provide to your buyers and sellers.Success from automation
As a marketplace website owner, your primary revenue is the commission from sales. That said, no matter how complicated this process seems, it involves a great deal of automation to handle all the business operations. The platform effectively manages these processes without any major paperwork.Offers value to customers and businesses
A marketplace can expand its horizons when it comes to attracting new customers and service providers as well. While the former can avail security, robust user experience, and location preferences, the latter can leverage lower fees, higher earning potential than other options, and create an appealing brand.Profitable business model
The most profitable business is to build a marketplace website as it has the potential to expand quickly. This works as two-way growth for your business. As your website starts attracting more traffic, it needs more vendors to fulfill the demands. Similarly, if high-quality vendors rule over, they attract more customers. Now, it’s time that you focus on building your marketplace with all the right elements at your disposal.Basic Elements of a Marketplace Website
1. Business Model
Start with defining your business model - what type of customers will you target, what services will you provide, and most importantly, what industry you will cater to. Let’s break it down. You can build a marketplace website in one of the following three types:- Type of participants -> Customer-to-Customer (C2C), Business-to-Customer (B2C), or Business-to-Business (B2B)
- Type of products -> Goods or Services
- Type of interaction -> Online Commerce or Online-to-Offline
- Vertical marketplace - If you want to cater to a specific industry or niche, you can go with a vertical marketplace that lists a specific good or service from different clients.
- Horizontal marketplace - If you want to build a marketplace website that deals in multiple goods and services but share a common characteristic, you can go with a horizontal marketplace.
2. Software Platform
The next step is to select a potent platform or software on which you will build a marketplace website. The platform will be responsible for all your business operations, transactions, and other marketplace activities. So, it would be best if you made a wise decision here. Let’s make it easy for you! You have two options to build your marketplace on a software platform:- Use an existing software or platform
- Build a customized marketplace website
3. In-house Development Team
Now, if you have decided to build the marketplace website from scratch, you will need a skilled, experienced, and robust in-house development team by your side. The team will be responsible for shaping your idea into reality. Having an in-house development team ensures that your marketplace is built under your guidance with all the features and functionalities you want it to exhibit. Your team will work closely with you to understand your expectations from the marketplace and incorporate all the necessary elements in it. From building an interactive and responsive website to product and information pages, integrating third-party services for an upgraded experience, and looking after maintenance - an in-house team can back you with comprehensive support. However, having an in-house development team may equip you with some challenges, too if you wish to build the marketplace website from scratch. Working on a marketplace website is a great project idea in itself, and hence, investing in a team can be equally expensive. Be it training your employees, installing new technologies for the project, or paying them a salary - everything requires a significant amount of investment. Hence, you need to choose your team keeping in mind all the above-mentioned factors.4. Payment System Integration
After setting up your marketplace website, the next big thing is to integrate a payment system for your buyers to transact with the sellers. As mentioned, it won’t be possible without your in-house team as the developers will incorporate the code as they build the marketplace website. Coming back to the process, you need to be very selective when looking for payment options. The most common ones include Stripe, PayPal, Amazon Pay, etc. Before you finalize any payment services, don’t forget to research your target audience and their payment preferences. It is possible that a particular payment option is not common among a certain group of buyers or your sellers may refuse to accept their payments from that service. Besides, there is a certain fee associated with every payment option that you choose to integrate with your marketplace. You may need to look at the budget limitations of your sellers while choosing a payment service. After all, they will be the people to receive payments from those gateways. No matter how complicated this process seems, these are the primary factors to consider when you integrate a payment system while building a marketplace website.5. Third-party Solution for Integration
