Marketplace businesses are some of the most valuable globally. Still, they are some of the most complicated to start. That’s because these businesses need to bring together two different groups of people: those who have something to sell, and those who want to buy it. Not only do marketplace businesses need to attract these two groups of people, but they also need to create a platform that makes it easy for them to connect with each other.
Find out more about how to build a marketplace website in terms of highlighting the problems when developing an online marketplace.
Here are some of the biggest challenges you’ll face when creating an online marketplace:
- Being in demand on the market. It is a crucial task to solve
- Attracting both sellers and buyers to the platform in the right proportion. This challenge is called the chicken-and-egg issue
- Creating a user-friendly platform. The least of all you want is for users to get frustrated with your site and give up. So, ensure the design is intuitive, and the navigation is easy to understand
- Keeping transactions safe and secure. This is essential in ensuring that both buyers and sellers feel comfortable using your marketplace. Be sure to have strong counter-fraud measures in place
With thorough planning and execution, you can overcome these challenges and create a thriving online marketplace. Let’s discuss these three main issues in more detail below.
Challenge 1. Being in-Demand
CB Insights research states that the main cause of startup breakdown is no market need.
But how can you be sure that your idea will be in demand?
Before you enter the market, conduct market research. It is an important step in a thriving marketplace launch.
If you neglect this phase, this may lead to the failure of your marketplace business. Therefore, collecting all the information needed for your business to be competitive is essential. In general, market research demonstrates the direction where to develop and helps to prevent many mistakes.
So, conduct a Product Discovery Session before starting web development. These are sessions where you meet with the software development team and discuss what you want to see from your future website and how it can solve users’ pain points.
In general, these sessions can help to answer the following questions:
- Will this website solve user problems?
- Will this marketplace make profit?
- Will your web solution be scalable in the future?
By finding answers to these questions, you will have an idea of whether your idea is profitable or it needs some modifications.
When creating a marketplace, think about how it will differ from others? These are possible options:
- Low commission. A small fee percentage is an attractive condition for both customers and suppliers
- Speed. How long would it take to process an order? Do the clients get an answer to their questions quickly? Speed is one of the indicators of the quality of a marketplace
- Good conditions. Is there a return? What is the warranty period? What about the bonus system? All of these aspects are worth thinking about in order to make your marketplace attractive to customers and suppliers
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Challenge 2. Attracting Sellers and Shoppers
When there are neither merchants nor consumers on the website, this is the chicken-and-egg problem. But how do you get the first users? Focus on unique content. Describe the pros that your potential user will obtain. Being engaged enough, each offline user may bring their acquaintances with them.
For example, the Etsy marketplace attracted artisans from various exhibitions and fairs. Thus, the website transferred potential merchants and purchasers from offline to online.
Another example is the Uber transportation company. It gained drivers by paying them even in case they did not have passengers. Thus, the founders attracted service providers and then consumers. That’s how they solved the chicken-and-egg-issue.
Challenge 3. Creating a Platform With Good UX/UI
User experience (UX) design determines how the interface works. User interface (UI) design is responsible for how the interface appeals.
Good UX and UI design make your web solution more attractive and competitive.
There are specific requirements for the marketplaces’ design:
- The website needed to be simple, easy to use, and visually attractive. Users should quickly understand how to perform a particular task on your marketplace platform
- Your marketplace design should be responsive
- Your web solution design should be unique on the market
The marketplace does not need any fantastic visual effects. Buyers come here to find the product quickly. It means that the main requirement for the design will be simplicity and conciseness. Any task that the user will pursue should be performed as efficiently and fast as possible.
You should bear in mind that any “extra” click or “arrogant” form of search can lead to a running out of potential customers.
Challenge 4. Keeping the Platform Secure
Indeed, a data security breach can kill your marketplace business. Therefore, you need to invest in protecting the data of your users.
Data security is a major issue for the online marketplace. For example, The 2021 Thales Data Threat Report states that 45% of US companies suffered a data breach in the year before.
Hackers can gain access to sellers’ personal information, such as bank account information and credit card numbers. They can also access customer information, such as addresses and phone numbers. This can lead to fraud and identity theft.
To protect customers, business owners must use data security measures, such as two-factor authentication and encryption. You must also ensure that your employees are trained in data security best practices. By taking these steps, you can protect your customers from online threats.
Today you read an article about the biggest challenges online marketplace buyers and sellers can face. To create a successful online marketplace, you should build a robust and user-friendly platform.
Also, you need to provide a unique value proposition on the market and find a way to attract buyers and sellers to your site. And, of course, you should ensure that transactions are safe and secure and user data are protected.
In short, starting a successful online marketplace is no small feat. But for those who are up for the challenge, the rewards can be immense.