CEO of MindSEO, a Digital Intelligence company. Director of the Portuguese Marketing Association. Google trainer and University Teacher.
Developing a marketplace can be attractive to many entrepreneurs as it is a business model in which no product or traditional service is needed. It can be a great opportunity to take advantage of the online sphere and the growing need for companies to highlight their offerings in this space; however, there are a few precautions to take, and a structured plan is needed in order to make a marketplace profitable and sustainable.
To create a successful marketplace, some initial investment is always needed, and while it is possible to generate profits and gain a reputation relatively quickly, you will most likely need adequate study and preparation. This is not only in regards to creation but also for the maintenance and growth of the business. In my time in marketing, here are five common mistakes I’ve seen entrepreneurs make when developing a marketplace and how you can avoid them.
1. Not Setting A Clear Target Or Goal
Before choosing the platform and developing the marketplace itself, you need to know what you want to do. There are several paths, and many of them can be valid if they have a clear and well-supported strategy behind them. Start by asking yourself some questions, such as:
• What problem will this marketplace solve for sellers and buyers?
• Why should I focus on market X?
• What are the differentiating factors of this marketplace?
• What do I want to achieve with this business model?
Set clear, real goals for sustained growth. This planning is essential to make clear the reason for your company’s existence in the market. It is also from here that you will know who your target audience will be and adjust the entire communication strategy and online presence accordingly.
2. Devaluation Of The User Experience
As it happens during the development of any other digital platform, the user experience (UX) must be at the base of its design and projection. The browsing experience should be simple, clear and not raise doubts or frustrations. The user usually takes around seven seconds to form a first impression of a company, which is why it is so important to create a positive feeling that motivates them to browse and buy from your marketplace. Even when launching a minimum viable product (MVP) to test an idea, it will be the user’s experience and feedback that will dictate the decision to continue investing and growing the platform.
As an entrepreneur, you want the user to be satisfied, come back and recommend the platform to other people. So ensure the platform is organized and clear with a quick and efficient check-in and check-out process. Although it is a point that can be worked on and improved through feedback and browsing data, it is still undoubtedly one of the most important factors to consider when launching a marketplace.
3. Not Working Trust Into The Platform
To promote the choice of the marketplace by users and sellers, it is necessary to work on a good reputation and embed trust into the platform and experience. Always try to show transparency, ensure good browsing and shopping experiences and present complete and clear information about sellers, regulations, conditions and assistance.
Remember that even the payment method can be a trust-destroying factor and lead to a sales drop. Choose a provider that doesn’t cause problems, is secure and is known and trusted by most users.
4. Lack Of Data Analysis And Interpretation Strategy
Performance, viability and evolving technology are some of the factors that must be continuously and consistently controlled so that you can have a solid informational base that guides your strategy. Information is power, so it is important to collect and record data, but it is also important to know how to interpret that data and adjust the necessary factors to improve your business. Start by choosing the best data collection and analysis tools and define your key performance indicators (KPIs). Let your instincts guide you to focus on the metrics that are interesting and analyze these to figure out what strategies can work for your marketplace.
5. Lack Of Professional Follow-Up And Associated Marketing Strategy
Having a good business idea is very different from being successful. Prioritize finding the right team to carry your business past implementation. The development of a marketplace with the right professionals not only allows you to create a platform with the appropriate tools for the specific project, but their advice and skills are invaluable in order to create a marketplace that is sustainable, viable and attracts and retains users. Make use of this team for professional monitoring to allow the analysis and prevention of recurring problems such as communication issues, plug-ins, integrations, payments and security that can compromise the UX.
After the launch phase, it is crucial to have professionals on your side who are able to plan and put into practice a marketing strategy that converts and is continuous. Points to consider include maintaining proper communication, showing the benefits and differentiating factors of your marketplace and establishing partnerships to help with the dissemination of news and your social media presence.
Starting With Business Planning
Of all the things to keep track of when creating a marketplace, always start with business planning. Set your target, evaluate the competition and prepare a business plan that will help you study the viability of the marketplace. If necessary, look for the best sources of funding and find the right professionals to help you successfully realize your idea.
I also recommend that you think long term, be patient and start by winning over users. If you find yourself in a well-defined place in the market, make moves to guarantee competitive conditions, continue prioritizing a strong marketing and communication strategy and ensure constant maintenance of the platform to avoid any potential frustrations or errors. If you follow this advice, you can be sure that you will have everything needed to attract customers, convert sales and grow your business.