There are numerous ecommerce marketplaces available nowadays. They can be classified based on the type of customer, core focus, industry, and other factors. In this blog post, 3 types of ecommerce marketplaces we present the most thorough categorization you’ve ever seen. Enjoy!
Ecommerce Marketplaces by target audience
When it comes to target audiences, marketplaces are divided into three categories: business-to-business (B2B), business-to-customer (B2C), and peer-to-peer (P2P), also known as customer-to-customer (C2C). Let’s take a closer look at each category to understand its concept, business models, and prevalent problems.
Business-to-business ecommerce marketplaces
A business-to-business marketplace is a website where wholesale providers sell their products or services in bulk to buyers. This form of marketplace is typically run by a third party, which allows firms to use it on advantageous terms. The following are some of the advantages of using a marketplace for sellers:
- Capacity to distribute items and services to a larger number of clients.
- Wider sales channels
- No need to build their own ecommerce platform
- Start selling right away
- No large initial commitment
The goal of an online B2B marketplace is to automate the selling and buying process, improve customer experience, and increase financial transparency. Alibaba, Made-in-China, Amazon, and eWorldTrade are among the most popular B2B marketplaces.
Let’s take a look at how these online marketplaces make money.
Business models of B2B ecommerce marketplaces
A B2B marketplace operates as a middleman between suppliers and buyers, leaving just a few monetization options. Let’s have a look at the three B2B marketplace business models.
#1 Commission-based business model
Because it easily adapts to varied industries, this is perhaps the most popular model for all marketplaces. It is based on charging a commission for every transaction that occurs on the marketplace, as the name implies. The major benefit for marketplace owners is that this is the most profitable method. All of the value that moves through the marketplace is distributed to the marketplace. This business strategy is used by well-known marketplaces like Alibaba and Fiverr as their primary source of revenue. The commission-based model is scalable and, more crucially, ideal for marketplaces with low transaction volumes.
#2 Subscription business model
A membership or subscription model is focused on charging sellers a monthly or annual fee for access to a certain set of marketplace features. This strategy is best suited for high-volume marketplaces where customers are likely to make recurring purchases. The subscription income model is well-exemplified by Labelcorner, a fashion B2B marketplace. It offers sellers a variety of subscription options based on the quantity of products they sell, the features they require, and the prominence they desire in search results.
#3 Listing fee business model
Some B2C marketplaces, such as Etsy, charge a fee for listing products in addition to charging commission on each sale. It costs $0.20 to list an item on Etsy. There are also premium listings, such as those seen on Craigslist, where sellers pay for increased visibility and a higher search rating.
Challenges of building a B2B ecommerce marketplace
Lack of a recognizable brand
It’s difficult to break into the market as a newcomer. The majority of marketplaces lack brand recognition and identity. All existing marketplaces, on the other hand, began some time ago and overcome this obstacle. It’s difficult to discover the proper solution, but we believe that people are the most important factor. You may cope with the bad notion of a new marketplace by focusing all of your attention on users. Define your target market, identify their pain spots, and provide a solution to their issue. People will adore your product even if it is new if you do this.
Lack of faith or trust
Orders on a B2B e-commerce platform typically range from thousands to millions of dollars. The first question that arises in the minds of entrepreneurs is whether or not this marketplace is a secure location to sell and buy. New B2B markets should make a concerted effort to establish their legitimacy. Here are four ways that B2B marketplaces can take to improve their credibility:
- When users register, thoroughly verify them.
- Require legal documentation and licenses from providers.
- Create a review and rating system to ensure that only the most trustworthy providers are chosen.
- Customers will feel protected if you provide them with shipping and return policies, as well as a money-back guarantee.
Business-to-customer ecommerce marketplaces
There are two sorts of users in the B2C marketplace model: businesses and customers. Businesses sell their products and services directly to customers rather than to other businesses in this approach. Many B2C marketplaces serve as one-stop shops where customers may browse for a wide range of products. There are numerous well-known B2C marketplaces because this model is one of the most popular nowadays. AliExpress, for example, is a massive online B2C marketplace with hundreds of suppliers selling anything from clothing to automobiles. Booking.com is an online travel marketplace that connects hoteliers with tourists and offers a diverse range of accommodations.
Business models of B2C Ecommerce marketplaces
#1 Business Model: Subscription
The subscription or membership model is used in B2C markets to charge providers a fee while keeping the marketplace free for users. This concept can be a good starting point for marketplaces that want to charge commissions in the future but can’t handle transactions right now. Venu, for example, is an Airbnb-style marketplace for event facilities that began with a membership basis. They converted to a commission model after they had verified their business idea and built an invoicing system.
#2 Commission-based business model
Booking.com is a B2C travel platform where commission is the primary source of revenue, accounting for roughly 74% of total revenue. This marketplace works with hotels and property owners, charging between 10% and 30% on each transaction. Each transaction on Booking.com is charged a fee ranging from 10% to 30%.
#3 Listing fee business model
Some B2C marketplaces, such as Etsy, charge a fee for listing products in addition to charging commission on each sale. It costs $0.20 to list an item on Etsy. There are also premium listings, such as those seen on Craigslist, where sellers pay for increased visibility and a higher search rating.
Challenges of building a B2C ecommerce marketplace
High levels of competitiveness
The B2C marketplace area is dominated by behemoths like eBay, AliExpress, and Booking.com, all of which are difficult to compete with. These firms have held their positions for a long time, making it extremely difficult for startups to obtain a competitive advantage. Nothing, however, is impossible. It’s possible that the solution will focus on a specific niche. You boost your chances of success by focusing on a specific specialization. A niche is a group of customers who have similar requirements, preferences, and problems. A thorough examination of a target group for a B2C marketplace can aid entrepreneurs in developing the best marketing approach and gaining a competitive advantage.
Pricing issues in B2C
Customers’ purchasing decisions are influenced by a variety of factors. However, one of the most critical factors is price. As a result, developing a suitable pricing system is critical. Many B2C marketplaces have difficulty determining prices that are favorable to both sellers and customers. To create an efficient pricing structure for a B2C marketplace, we recommend taking the following steps:
- Learn about the market, your target audience, and your competition.
- Determine the amount of product and service demand.
- Set expectations for the market (what your customers expect to pay for)
- Price differences are offered (different prices for different levels of products and services)
- Prices should be reviewed on a frequent basis.
- Only raise prices when there is a deficiency.
Peer-to-peer ecommerce marketplaces
Individuals with comparable wants, likes, and incomes can share items and services through a peer-to-peer (P2P) or customer-to-customer (C2C) marketplace. This type of marketplace works on the following principle: peers can trade things (like on Etsy) or services (like on Uber or Airbnb) for money or other goods and services. P2P marketplaces are a facet of the sharing economy, allowing people to make the most of their resources by renting rather than buying. The most essential aspect of this type of marketplace is that one person can be a consumer today and a service provider tomorrow. The P2P model features a shorter sales cycle and average length of relationship compared to the B2B and B2C models.
Let’s learn more about this marketplace type and how P2P marketplaces usually make money.
Business models of P2P ecommerce marketplaces
Paid promotions are number one.
By paying a charge to the marketplace, users can promote their goods or services. This strategy is ideal for product-focused P2P marketplaces where the customer’s focus is on the product rather than the vendor. There are three types of paid promotions:
- Vendor profiles that are sponsored
- Products and services highlighted
- Promotional items in the cart/at the checkout
With this model, third parties can post ads to promote their products and services on the marketplace. There are several advertising models P2P marketplaces can use:
- Cost per impression (CPI)
- Cost per click or pay per click (CPC/PPC)
- Cost per period (daily, weekly, monthly)
Challenges of building a P2P ecommerce marketplace
The market does not provide a solution to a real problem.
Many markets fail because they do not address the real issues that their target users are facing. Why should people utilize a marketplace if it doesn’t answer a specific problem? Conduct rigorous market research, define your target audience and their demands, and validate your business idea using tools like the Lean Canvas or Business Model Canvas before starting your marketplace. These procedures will assist you in selecting the best plan and avoiding failure.
A focus that is too broad
Another typical issue with P2P marketplaces is that they offer an excessively large choice of products and services. When you’re starting from scratch with a marketplace, it’s best to focus on a vertical market in a certain geographic area. Lyft, for example, focuses solely on one service — rides – and has been a huge success since its inception. TaskRabbit, on the other hand, began with a horizontal strategy and eventually struggled with scaling. When marketplace owners select a niche, they may put their concept to the test before going global, reducing risk.
Ecommerce Marketplaces by focus
Vertical marketplaces, as the name implies, are focused on a certain region or niche. Rather than selling everything to everyone, they focus on a specific set of services and products. Having a niche-specific website allows you to stand out from the crowd, provide higher-quality products and services, and boost personalization. Etsy is the most well-known example of a vertical marketplace. Craft supplies, as well as handmade and vintage items, are the core of this platform. Only genuine sneakers are sold on the StockX marketplace.
A horizontal marketplace, on the other hand, sells products and services from a variety of industries to a variety of clients in numerous locations. This form of marketplace is referred to as a one-stop shop because it caters to a variety of customer needs in one location. It’s similar to walking around a mall with a lot of stores, but it’s all done online. The most well-known marketplaces, such as eBay, AliExpress, and Amazon, are horizontal and provide a wide range of products.
Ecommerce Marketplaces by management approach
Unmanaged markets are typically peer-to-peer, with customers contemplating purchases based on ratings and reviews. Background checks, quality assurance, and feedback analysis are not investments made by the marketplace owners. In general, the lower the fees, the less a marketplace manages on its own. Unmanaged marketplaces include Fiverr, eBay, and Etsy.
Uber, Airbnb, and Grubhub, for example, put some effort into quality control and background checks. These investments are being made by Airbnb for customer service and user verification. Uber’s expenditures include driver verification and ratings.
Sellers’ entire sales process is covered by fully controlled marketplaces. For example, Opendoor, a real estate platform, acquires houses from sellers and resells them. The only thing left for sellers to do is accept the offer. Fully managed markets have a lot greater charge, but the service quality and customer experience are also much better.
Unmanaged – Peer-to-peer transactions; trust comes from reviews and ratings; lowest transaction fees
Lightly managed – Protection and guarantees for users; accurate content; technology tools
Fully managed – Operator mediates transactions; marketplace handles the whole process; superior customer experience
The bottom line
The trend in marketplace development is to focus on a single niche. High competition and a lack of brand identification plague new marketplaces, causing the majority of them to fail. New marketplaces that solve actual problems for target groups, on the other hand, are in high demand.
You’ve arrived at the start of your adventure as a marketplace entrepreneur!
This guide’s goal is to assist you in getting started on your trip and moving forward one step at a time. The iterative method will help you maximize learning, save costs, and ensure that your idea is set up for success from the start.
The marketplace building process is a lot more comprehensive than one might think, so let’s dive into the #1 guide to building an online marketplace in the Caribbean.
What is an online marketplace?
An e-commerce site that connects merchants and customers is known as an online marketplace. It’s also known as an electronic marketplace, and the website owner is in charge of all transactions. Companies utilize internet marketplaces to connect with clients interested in buying their goods and services.
A website or app that supports shopping from a variety of sources is known as an online marketplace. The marketplace’s operator does not own any inventory; instead, their job is to show other people’s goods to users and enable transactions.
Guide to creating an online marketplace one step at a time.
People often look at amazon & run and say “hey I want to build the next amazon in the Caribbean”. It’s not that easy, given the size of our markets and the ability to do cross boarder commerce in a way that makes sense to the end customer. That means that building a successful marketplace in the Caribbean is a lot more difficult in the region than it will be in other parts of the world.
It takes time to set up an online marketplace. In a nutshell, here are the steps:
- Find a strong marketplace idea & flesh it out (ensure you are solving a problem & that problem is a pain point for enough people).
- Do market research to find out market needs & Product demands (you may be trying to solve a problem for you alone)
- Select a marketplace business model, Operational model, Pricing models, Revenue models & Digital strategy (That all works together)
- Solve the disintermediation problem for all your models (This will break your marketplace before it even starts)
- Value, finding the right balance of value for mercahants, customers & the marketplace
- Create your Minimum Viable Platform (MVP) (your marketplace MVP that will get useful feedback that you can use to iterate).
- Build your demand & supply models (Finding the right balance between the chicken & egg problem)
- Begin selling to your first consumers on your marketplace.
- Keep track of your essential metrics & analytics to help you expand your business.
You’ll learn about business strategy as well as a deep dive into how successful marketplace websites work from the inside out if you keep following my blogs as I am to bring local context to how marketplaces can work.
How do online marketplaces work?
Online marketplaces do not have to keep track of inventories, logistics, photos, or product descriptions, but they can delegate this responsibility to sellers. Sellers, on the other hand, receive their own location where they can manage orders and offer their wares. Buyers have electronic access to suppliers’ inventory, and real-time information on the products being presented to customers is updated on a regular basis. So, how do these online marketplaces generate revenue? Continue reading to learn more:
- Options for Earnings
- Subscription-based model: One of the most common business models is the subscription-based approach. A regular price is charged for the supplier’s access to the platform in this monetization model. Suppliers can use this revenue model to find new clients or obtain access to potential clients or partners. However, you must guarantee that your vendors receive sufficient value to keep their subscriptions active.
- Sign-up fees: In this arrangement, sellers pay a one-time cost when they apply to sell on your marketplace platform, often known as sign-up or registration fees. No complicated payment methods are required because the sellers pay you upfront. You can motivate vendors by stressing the benefits and offering early bird rewards.
- Commission model: When a vendor makes a sale, you charge them a fixed fee or a percentage of the sale as commission. Each conversion may be charged by the platform to both the vendor and the buyer. Unlike subscription-based models, the charge appears to be acceptable in this case because the parties operate for free and only pay when they receive some benefit from using the platform.
- Product listing fees: Product listing fees are a typical marketplace business concept among two-sided marketplace platforms. When your vendors put their products for sale, you charge them a fixed or variable sum in this approach. While there are several methods for calculating product listing fees, you must make it as simple as possible for the seller to pay the fees. This would inspire them to add additional products to their catalog.
- Mixed models: You can choose the revenue model that best matches your market, depending on your industry. You shouldn’t, however, take a “one size fits all” strategy. You can use multiple models at the same time. You can generate many revenue streams by merging numerous models. Some of the largest online marketplace participants, such as Amazon, have successfully integrated numerous models.
Types of ecommerce online marketplaces
Online marketplaces are classified according to their industry, focus, and target audience. We’ll go through each one individually and explain how the Multi Vendor Marketplace Module can assist you in creating your own marketplace.
Online Marketplace based on Core-Focus:
Based on emphasis segments, there are two types of online marketplaces: those that provide only one type of service or sell only one category of products, and those that serve as a hub for many services in a number of niches.
A marketplace that focuses on a specific sort of service rather than diving into a pond full of fish. Consider Etsy, which began as a small marketplace for people to sell goods and has grown into a giant.
A marketplace is an internet platform where you may locate a variety of services or items. Consider a shopping mall where you can locate all of your favorite brands and items under one roof. A horizontal marketplace is an online eCommerce marketplace such as Caribshopper.
Global markets are locations where you may buy and sell anything. You’ll have a larger inventory, and buyers will have more selections, regardless of the distance between buyers and sellers. Purchasing from a worldwide marketplace is similar to shopping at a mall; you’ll find everything you need all in one spot. The most well-known example in this area is eBay.
A major feasible classification for the online marketplace occurs on the verticals they are offering:
Product-based online marketplace
This type of online marketplace focuses on product sales. Product-based marketplaces, such as Amazon and Flipkart, exist. Product-based marketplaces make money through commissions and subscriptions. They have the authority to levy delivery costs as well.
Service-based online marketplace
A website where service providers can post and deliver services such as personal care, cleaning, plumbing, appliance repair, pest control, graphic design, and so on.
The Urban Company, Fiverr, and Upwork are popular service-based online marketplaces that offer a wide range of services across hundreds of categories.
Booking or rental online marketplace
There’s a good chance you’ve heard of a booking or rental business that offers an online marketplace. The most common websites for booking or renting Marketplace are Ola, Uber, booking.com, and MakeMyTrip.
Marketplace based on the platform
A platform or an online marketplace for the purchase or sale of goods and services through wireless handheld devices or mobile phone
A two-party site, e.g. seller – shopper, company owner – investor, etc.
Marketplaces on the basis of Customer Type:
B2B – an online marketplace for the exchange of goods or services between companies or two business merchants
B2C – an online marketplace for the transaction from the merchant to customer for goods or services
C2C– an online platform for the transaction between customers for goods or services
Examining several sorts of markets and deciding which one is best for your company is a crucial decision. You’ll be dedicating a portion of your revenues to growing a new audience, which is something you’ll be doing on a regular basis.
When you’ve located a market that interests you, learn more about the items and businesses that thrive there. It doesn’t imply it won’t work out if your products don’t match, but it’s something to think about.
Benefits of online marketplaces
You are not obligated to do anything just because everyone else is. Every business will not benefit from selling on an online marketplace for various reasons. It does, however, have some advantages that make it a viable alternative for some organizations.
- Improved visibility: Placing your products in a virtual high-traffic marketplace increases their visibility. Customers will be directed to your website or physical store as a result of this.
- Better management: As a seller, you won’t have to waste time and money building and managing your own e-commerce website or app. The market will take care of it for you. You can concentrate on controlling your inventory rather than getting distracted by non-essential issues.
- Low startup expenses: Using online marketplaces to promote and sell products can help small firms keep their expenditures under control.
- Ease of use: As the worldwide internet penetration rate rises, customers will find online markets to be more convenient than their offline equivalents.
The near future
Online marketplaces dominate the internet, providing a perfect meeting place for consumers and sellers. You can create the optimal conditions for customers to shop and businesses to promote by using the proper revenue model.
Amazon and Walmart, for example, are hybrid markets that sell both their own products and those from other companies. They also operate as a marketplace for buyers and sellers, allowing a wider range of products to be sold. Because of their experience, technological capabilities, and nearly limitless resources, these behemoths give other competitors a run for their money. Marketplaces must eliminate friction in both buying and selling to encourage participation, show trust in all transactions to encourage involvement, and provide efficiency and distinctive value to consumers in order to exist. Those who are unable to do so will see their market share dwindle.
Do you have a solid business concept in mind? Are you ready to launch your own online marketplace? But hold on a second, have you validated your marketplace company concept yet? Don’t be concerned. We’ve got your back!
Before you establish your own website or app, you must first validate your marketplace business idea. You must ensure that your concept is properly implemented, with the end result being a viable and legitimate marketplace. No matter how much money you spend into developing a profitable app, if it is not in the best interests of the users, all of your efforts will be for naught.
So here is the first step to learning about your idea, let’s take a dive into Online Marketplaces: 10 tips to guide your idea.
Solve A Problem
The fact that most online markets do not solve an issue is one of the key reasons for their failure. Most young businesses launch an online marketplace too soon and fail to expand their customer base. In Trinidad & Tobago only there are 34 online marketplaces all of which actually follow the same model.
Entrepreneurs have been influenced by the Sharing Economy to feel that sharing any asset would be a smart concept for a marketplace. The majority of them fail to consider whether the approach solves any issues. It’s critical that your marketplace addresses a market pain point or unmet need. It’s also critical in a marketplace business that the solution caters to both the vendors and the customers.
Is It Better To Go Big Or Small?
Another decision that entrepreneurs must make is whether to launch a horizontal or vertical marketplace. A horizontal marketplace, such as Yelp, brings together a variety of categories. A vertical marketplace like Airbnb focuses on tackling a specific problem: some people have spare rooms in their homes, whereas most guests require temporary lodging and a pleasant experience.
Entrepreneurs should aim for a vertical platform because they demand strong knowledge of a single sector or solution. Niche marketplaces have a competitive edge, but they require extensive market research because they involve causing behavioral changes. Marketplaces that are local copies of global players lack the novelty but still do good as the entrepreneurs have more knowledge about the local community than global players.
Once you’ve decided on the problem to tackle and the technique to take, you’ll need to put your plan to the test. When you discuss an idea with a few individuals, it sounds fantastic, but the fate of a marketplace ultimately depends on whether the market is friendly to the idea.
1) Does your online marketplace provide a solution to an issue?
This is the first step in validating your marketplace concept, and it’s probably the only one you’ll have to keep asking yourself. It makes little sense to embark on the process of developing an online marketplace unless you have a need to solve. Many online marketplaces (about 40%) shut down during the first six months of operation because they were unable to handle any issues. There was no problem to solve in certain circumstances.
- Make a list of all your assumptions about the situation in order to acquire an honest answer to this question. Every single one of them.
- Ask a few folks, the more the merrier, whether they are dealing with a similar problem.
- Inquire about their current approach to the problem.
- Check online to see if your target market has any existing solutions.
If not, double-check that your solution addresses all of the problems. Also, if there is one, see if your solution adds any value to it.
2) Does the Online Marketplace Have a Market?
Before launching any product, you must determine whether or not there is a market for it. Calculating the total addressable market is an important metric (TAM). In basic terms, it is the total money you will earn if all of your product’s users in your target market use it. The smaller the TAM, the more niche your market is. It becomes easier to qualify your marketplace idea once you have the TAM.
Because a marketplace is a two-sided market, you must consider both groups of customers. If just one of them has a market, the marketplace is doomed to fail. Talking to people is one technique to find out if there is a market. Interviewing potential clients will help you figure out if your solution has a market.
3) Is it true that people are looking for solutions?
We often overlook the fact that people are looking for solutions in our entrepreneurial zeal. There may be an existing problem in your market, but it will never work out unless people believe it is causing enough inconvenience to warrant looking for solutions.
Search engine searches in your target market might help you figure out if individuals are looking for answers. Google and other search engines provide platforms for analyzing search queries. You can be guaranteed that there will be a demand for your marketplace if you have a complete list of users looking for solutions. Interviewing people is another option, which is more traditional.
4) Would People Be Willing To Pay For An Online Marketplace?
One of the final steps in the validation process is to determine whether or not people will pay for the online marketplace. The majority of individuals, particularly friends and family, believe that every concept is fantastic. However, if you ask them if they would pay for the solution, the majority will answer no. Only if you have a collection of clients who provide transactional value to the online marketplace will it be profitable.
5) The ‘Chicken & Egg’ problem (online marketplaces)
One of the most serious issues that online markets face is that both merchants and customers are influenced by one another. Customers will not visit the marketplace if there are no quality seller options, and quality sellers will not put their products and services on your marketplace if there are no customers. As a result, there is frequently a supply and demand imbalance in the marketplace. It’s challenging for a rising market to figure out how to solve this conundrum.
Aside from that, there are a few other problems that new online marketplaces encounter.
- Providing a positive client experience.
- Providing excellent customer service is a must.
- Creating and maintaining relationships with both suppliers and customers.
- Data about customers and sellers is kept safe.
6. Market Research:
You must undertake complete market research before investing in any marketplace notion. This comprises researching possible competitors and their performance, as well as your target demographic and current market trends. The goal of this study is to determine the viability of your platform in today’s more difficult markets.
So, as you’re doing your market research, be sure to ask the following questions:
- Who do you want to reach out to?
- What is the present state of the market?
- Isn’t there already a marketplace for this?
- How is my concept superior to the competition’s?
- Why would customers and providers opt for a different provider?
- What happened to the other marketplaces that did not last or are not successful?
7.The Canvas of the Market
It’s time to write down your thoughts when you’ve completed your market research. The next phase is to develop a business model that considers both customers and providers’ value propositions, distribution channels, and income sources. If you divide your research insights into a fixed template that addresses the following: problem, solution, key metrics, distribution routes, customer segmentation, cost structure, and revenue streams, creating a marketplace canvas can be relatively simple. Remember that the concept will only work if you concentrate on both customers and providers at the same time.
This canvas will aid in the organization of your thoughts by providing an outline of what you intend to accomplish. Acting on a notion reduces the chance of failure and allows you to determine whether the concept is worth pursuing. Here are some of the questions to consider when you create the marketplace canvas for your marketplace concept.
- How effective have you been at resolving the issue?
- What is the consumer and provider value proposition?
- For customers and providers, how effective is the distribution channel?
- Is the cost structure feasible for both customers and providers?
8.Talk to your target market; obtain feedback from customers and vendors.
It’s critical to talk to your target audience and possible providers after you’ve created your marketplace canvas. When it comes to determining the viability of a business, their opinion on your platform is most important. To learn about shopper preferences, speak with someone in the same business or distribute an online questionnaire. This is crucial if you need to know how frequently and under what conditions they are willing to switch.
The interviews may also assist you in identifying some of the most recent market trends or crucial categories. This will eventually assist you in including the most relevant features that target the appropriate consumer base at the appropriate moment. Here are some examples of probable customer and provider queries. Remember that you can only pitch your idea to suppliers and customers after you’ve assessed how they react to current offerings.
Questions for prospective clients include:
- How do you assess the current state of the online marketplace?
- What types of brands/services would be most beneficial to you?
- Which e-commerce platform do you prefer?
- What distinguishes it from the competition?
9.Analysis, Benchmarking &.Risk Assessment
It is not a simple task to design a platform. While a marketplace canvas can help you determine whether or not to pursue your marketplace company concept, there are numerous additional canvases that can assist you in creating the right platform. A thorough examination of the following paintings will aid you in gaining a clear understanding of the market you are about to enter.
Ecosystem Canvas offers a broad perspective on the brand new environment and industries, assisting you in comprehending the new scenario.
Motivation Matrix: Several motivation factors are distilled into six core types: incentive, achievement, social, acceptance, fear, power, and growth. Any business takes actions triggered by several motivation factors that are distilled into six core types: incentive, achievement, social, acceptance, fear, power, and growth. Businesses forecast how a user will interact with the platform based on all of these incentive variables.
Minimum Viable Product (MVP): “A minimum viable product is a version of a new product that allows a team to gather the most amount of validated learning about customers with the least amount of effort.” — Ries, Eric
Using these frameworks to identify the platform’s benefits and drawbacks can be time-consuming, but it will pay off in the long term.
10.Create a minimum viable product (MVP) (Minimum Viable Product)
As the name implies, the goal is to provide a product with enough functionality to please early adopters. A subset of potential consumers is shown the app with essential functionality (and nothing more) and asked to test it. They then recommend enhancements for future development. Your assumptions will be validated by their reaction to the app’s performance. You may test your idea, design, features, user flow, and most crucially, the expectations of both users and vendors with an MVP.
An MVP can help you in the following ways:
- You may test, develop, and optimize your concept by visualizing it.
- Assists you in deciding on the best company model.
- It assists you in comprehending user and vendor requirements.
- Identifying the project’s shortcomings and flaws
Before you start developing anything, write down all of your assumptions about the problem, value proposition, business model, and distribution channels, and test them with consumer interviews and search data. Some of your initial assumptions are very likely to have been proven incorrect. On the other side, you now have access to previously unavailable knowledge, which provides you with new opportunities.
You should have a clear sense of your users’ true problems and viable solutions after going through this procedure. You should be much closer to finding a solution that fits the problem.
Or book a call with OCEY PHILLIPS to get all your marketplace needs solved.