Fundamentals Of An Online Marketplace

Michelle B. | May 12, 2017

Fundamentals Of An Online Marketplace

Fundamentals of an Online Marketplace

Starting an online marketplace sounds exciting, but it can also be difficult, time-consuming, and expensive. Don't forget stressful, complicated, and confusing, too. Fortunately there are options that can make it easier, such as choosing to use a marketplace platform instead of building everything from the ground up. Looking at both options is a great way to discover which will be right for you, so you can move your business forward the correct way. Overall, it's important to consider everything you'll put into the marketplace versus what's already done for you, and then factor in the cost of both options.

Building Your Marketplace From the Ground Up

When you build a marketplace from the ground up, you know everything about it and how it works. There aren't any questions, because you have to study things carefully and really get involved. But it takes a lot of time, and it takes skills that you may not have and will need to learn. You can also hire someone else to handle aspects of your marketplace, and don't forget that you'll need ongoing support, too.

Finding Talent to Create and Maintain Your Site

One of the biggest issues you'll face when it comes to setting up your marketplace is making sure you have the people you need to create and maintain it. Not only can they cost money, but they also need to be located and retained. If you don't have the right talent, you may end up without the kind of marketplace you really want, and that can hurt your business.

Shipping  to Your Customers

Drop shipping was a popular way for companies to send things to customers without having to keep any actual inventory. Unfortunately, there can be serious problems with that method. Generally, it puts your company at risk for complaints and problems you have no control over, when the drop shipper makes a mistake and you get a phone call in an attempt to sort things out. You can create your own shipping channels, as well, but you'll need to secure shippers and set your marketplace up to process orders to be shipped correctly.

Vendors and Inventory

Where will you get your goods? The right vendors can make all the difference, since some charge less than others and many of them may not provide the goods you need or the terms you want when it comes to things like delivery and payment. With that in mind, you want to find the most reliable vendors who have the best inventory, and then work with them to get the best terms. There are plenty of options when you set up a marketplace, but you'll need to spend time and effort to find the right ones for your needs.

Dealing With Payments

Getting paid is obviously very important, and you'll want to be sure you're getting the money you're owed in a timely manner. If your payment processor doesn't work correctly, you could lose sales to another company with the same or similar products. Choosing the right payment processor matters, and can be one of the most important aspects of your marketplace. If there are problems, you'll be the one to sort them out, so you'll need to understand what issues may arise and how to correct them, as well as who to contact when issues appear.

Choosing to Use a Marketplace Platform

Platforms like Near Me or Sharetribe offer highly customizable marketplaces and supported services for clients. Everything is covered, and you can just focus on running your marketplace, building client bases, and seeing those sales come in. That's the biggest value point with platforms, since they allow you to take the focus off the marketplace's creation and place it where it belongs - on sales, clients, inventory, and other significant aspects of your business. While building your own online marketplace can be rewarding, using a pre-created platform makes things easier and can lead to more enjoyment and better profit margins.