With COVID-19 and its ongoing repercussions, it has changed the way people around the globe shop and use technology. eCommerce is booming and is showing no signs of slowing down.
This has left many companies looking at new ways to expand their eCommerce footprint. Online marketplaces have quickly become a trending topic for both B2B and B2C merchants because of the intrinsic benefits that we don’t see in traditional commerce models, but they are anything but a trend. Marketplaces are driving the next generation of eCommerce at lighting speed, leaving many companies wondering just how to launch a marketplace?
As is true with many complex undertakings, there is no single right approach for how to launch a marketplace. At Echidna, we have worked with numerous clients to design and build robust, reliable, and responsive storefronts. And while there are many approaches that can certainly work, the information we share in this article has an established track record and clear conditions for success.
Create Your Marketplace Foundation
You’ve established there is a need for your marketplace and are ready to set out on creating one, so now what?
Before you jump in, you will need to define three areas of your marketplace: business strategy, operations, and technology. These pillars can be developed simultaneously and will be the foundation of your marketplace.
BUSINESS STRATEGY
How will your marketplace make money? Commissions on seller purchases are the most common but don’t have to be the single method. From selling ad space to monthly subscription fees, depending on your marketplace more than one can make sense to incorporate or start with one and place to introduce others down the road. Either way, have a plan clearly laid out before you move forward. Without doing so, you could be at risk for choosing the wrong technology, missing functionality requirements, or even adding unnecessary features in your initial launch.
OPERATIONS
Before you launch your marketplace you will want to make sure it is set to operate smoothly and efficiently. A few of the many areas you will want to consider:
- Staffing requirements and roles
- Customer service strategy
- Promotional strategy
- Seller onboarding and compliance
TECHNOLOGY
You will need to have a clear understanding of the type of marketplace you intend to offer because not all of them will be viable with all marketplace technologies on the market today. From there consider architecture and order management system integration.
Aligning with the right marketplace technology will allow you faster time-to-revenue so it is one of the most important decisions you can make to empower your foundation. Read our entire article on evaluating marketplace technology for additional information.
Client Spotlight: How HorecaHub Launched An Easy to Use Marketplace
HorecaHub is an innovative leader in selling, marketing, and distributing products to hotels, restaurants, and cafes; providing top-quality food and catering supplies to the foodservice industry.
Echidna partnered with HorecaHub to build their B2B marketplace solution that connects buyers to a variety of options. The user experience was key, making sure it was easy for buyers to find, filter, and put products in their shopping cart together as quickly as possible with a smooth checkout process. Technically, being able to communicate with their ERP system to immediately pull stock and also offering a responsive solution for users visiting from various devices was important. Now buyers can enjoy one order, one delivery, one invoice, and one payment- something this easy was not possible before the HorecaHub eMarketplace launched.
Define Marketplace MVP Criteria
Of course, we all want our marketplaces to see the widely acclaimed success that companies like Amazon and Alibaba have seen. But it's important to understand that scaling takes time. Starting with defining and building a minimum viable product (MVP) is a preferred choice that allows you to quickly launch within your set budget and scale over time.
MVPs also provide an excellent way to test core assumptions and ensure investment makes sense. Once your MVP is built you can monitor it over the course of eight to twelve weeks to ensure market demand and scalability potential exist. If your assumptions are accurate, your MVP can continue to grow in phased approaches that make sense for your business.
These six sectors are a good place to start defining your marketplace MVP:
- Marketplace model (open, closed, distributor network)
- Third-party sellers (how many are lined up post-launch)
- Customer service (for sellers and buyers)
- Order management
- Product catalog
- UI/UX (read out article on Marketplace UX for additional insight)
Echidna has been helping our clients with digital strategy, defining and building their MVP, and designing sites that delight their customers for over a decade. Learn more about our experience working with marketplace technology and how our team can help you launch a successful marketplace by contacting us below.
