All of us have used Uber at least once in our lifetimes. You must have planned a holiday and reserved your accommodation using Airbnb. Haven’t you?
Okay, leave it all!
You might have ordered thousands of products from Amazon, eBay, and Alibaba. Similarly, Upwork, and Fiverr isn’t new to us. What do we call them? These are highly popular multi-service or multi-vendor marketplaces.
These exceptional platforms reflect the penetration of digitization into our lives. The brick-and-mortar-type businesses are no longer a hit among consumers. Multi-service marketplaces are all they need. Statistics reveal that 2.14 billion people prefer shopping online using these marketplaces.
A multi-service marketplace can open infinite possibilities for investors, business owners, and buyers. The overwhelming popularity of these platforms invites numerous business owners to tap into the digital world. Unfortunately, they all get trapped right at the beginning of going digital.
Yes, you’ve guessed it correctly!
“How to begin a multi-service marketplace?” – that’s the most significant pitfall.
Don’t worry anymore! Below you will understand the ABC measures of stepping into the marketplace game. Furthermore, we will walk you through some more subtle (and not-so-subtle!) aspects of these revolutionary platforms.
Stay tuned till the end!
Overview of Multi-Service Marketplaces
A multi-service marketplace is an online platform where several business owners accumulate to offer their services to customers.
For example, Uber lets car owners list their vehicles on the platform and provide ride-sharing services to the customers. Similarly, Upwork allows service providers to mention their offerings and companies to hire them. The sky’s the limit regarding multi-service marketplaces. You can create a platform to attract sellers and offer pretty much everything to the customers online.
Typically, a multi-service marketplace encourages various vendors to join their platform, list their services, and benefit the buyers. In contrast, customers can browse the online marketplace to find the desired seller and access required services whenever needed.
What do these platforms have in store for the investors? The investors can charge a commission for each transaction from sellers, buyers, or both. Besides, several other monetization models generate massive revenues for the creators. We will discuss them later.
Moving on, let’s discuss various reasons to jump into the multi-service marketplace arena. Or, more precisely, it’s time to talk about the benefits you will get by developing such a platform.
Reasons to Develop Multi-Service Marketplaces
Successful multi-service marketplaces like Amazon have inspired many investors to play their cards in the sector. The giant multi-service marketplace has a whopping share of 45% in the US eCommerce market. However, fame and popularity aren’t everything. Developing these marketplaces has numerous benefits that you should know before doing anything. Let’s explore!
- Massive Market
Online is the best dwelling ground for businesses. These marketplaces witness optimum market, with numerous opportunities which weren’t accessible otherwise.
Are they more massive than physical marketplaces? Of course! A wider audience, better online visibility, and consumers’ willingness to shop online create an optimum field for multi-service marketplaces.
- High Profitability Prospects
A wider consumer outreach brings more profitability prospects. The multi-service marketplace monetization schemes are successful. So, higher revenues are on their way.
As consumers have significantly more interest to shop online, your marketplace can get more customers. And more shoppers mean higher profit points for your business. The digital marketplace purchases will reach $6.17 trillion by 2023, reveal reports.
- Consumer Willingness
Over time, consumers have shifted their inclination from physical to online businesses. Their interaction and buying behavior are optimum with multi-service marketplaces.
Apart from an impulse to try online marketplaces, customers love these platforms due to a higher degree of customization, browsing, and convenience.
- Well-Established Business Roadmaps
Multi-service marketplaces are tried and tested business models. So, you can easily access successful roadmaps to plan blueprints for your triumphant business.
All you need is to research a few successful strategies and find a survival plan for your marketplace on the Internet. Besides, you can easily implement changes to your roadmap as situations change in the long haul.
Undoubtedly, you cannot overlook these benefits for your business. Can you? You have been seeking them since eternity, after all!
So, it’s time to closely understand multi-service marketplaces before answering your mainframe question. Let’s take a better glimpse of the various types of multi-service marketplaces right below!
Types of Multi-Service Marketplaces
Multi-services marketplaces come in various shapes and sizes, each catered to different interests and demand patterns. Below are the classical types of multi-service marketplaces. Let’s study them together!
Target Market Parameter
A multi-service marketplace can have multiple target markets. The most suitable market is predetermined before even chalking out a roadmap. Here are the worth-considering markets:
- Horizontal Markets
A multi-service marketplace having diverse dealers selling various products online targets horizontal markets. For example, Amazon is a multi-vendor marketplace with a horizontal market of offerings of all types: personal care to commercial requirements and whatnot.
- Vertical Markets
Vertical markets are a slice of horizontal markets. Multi-vendor marketplaces targeting vertical markets have specific sellers dealing in only a particular product. For example, Etsy is a popular online marketplace selling products that resonate with handmade lovers.
Sold Products Parameter
We can classify multi-service marketplaces based on the type of products they sell. Depending on such a criterion, you can identify two types of marketplaces – physical and digital product/services platforms.
- Physical Product Marketplaces
The most common multi-service marketplaces sell physical products that you can see, touch, and define. For instance, Amazon, eBay, and Etsy.
- Digital Products/Services
The products without a well-defined existence are digital goods. Also, there can be multiple services offered digitally. These multi-service marketplaces deal in digital products/services. For example, Coursera, Udemy, Upwork, Fiverr, etc.
We can classify multi-service marketplaces by identifying the type of audience interacting with each other on either side of the commercial platform.
- Business-To-Business Marketplaces
The business-to-business marketplaces either deal in commercial products or have wholesale offers on any type of commodity. You can consider Alibaba as the perfect example.
- Business-To-Customer Marketplaces
The business-to-customer marketplaces sell products to the end consumers. For example, Amazon, eBay, Walmart, etc.
Apart from selling products like conventional marketplaces, these online platforms can serve different purposes. We can classify them based on the purpose parameter.
- Auction Marketplaces
As the name suggests, these marketplaces enable customers to place their bids on various products during the auction tenure. For example, eBid is the perfect illustration for such multi-service marketplaces.
- Crowdfunding marketplaces
Some multi-service marketplaces take the game to the next level. They offer a crowdfunding platform to the customers allowing them to raise funds for their oh-so-unique business ideas. The best example of such an initiative is Kickstarter.
Monetization Models for Multi-Service Marketplaces
Setting up a multi-vendor marketplace isn’t a goodwill gesture. You are thinking of building such a platform to earn significant revenues. Aren’t you?
So, let’s spare some time to analyze the famous monetization models that populate the industry. Have a look below!
- Subscription Charges
Charging subscription fees can be a brilliant monetization strategy for your multi-service marketplace. You can keep minimal services accessible to all, free and paid users. However, users paying the subscription fees can unlock more features for optimum online business. Indeed, it’s a successful and worth-considering scheme. Don’t you think so?
It’s the classical and conventional monetization strategy for multi-service marketplaces. Any transaction happening on your platform owes you a commission in such a financial model. You can generate sure-shot revenues with every purchase from buyers, sellers, or both. Also, it’s the safest way to monetize your efforts and attract massive returns on your investment.
- Listing Fees
Any seller wishing to list their products on your platform has to pay you a fee. That’s the simplest way to define the listing fee, monetization model. Understandably, a seller approaches you with substantial product types. So, you have the best chances to generate a significant ROI. The listing fee is the underlying strategy behind a popular multi-service marketplace called ArtFire.
- Promoted Products
Another successful monetization strategy for multi-service marketplaces is promoted product fees. You can offer an opportunity for sellers to bring their products to the center stage by paying you some charges. In return, you can display their products on top of the search result pages. It will allow the customers to engage more with such businesses and increase their revenue collection.
- Selling Products Yourself
Apart from trying out the above monetization schemes, you can sell products yourself through your platform. So, you will become a seller on your marketplace and generate excess revenue from regular purchases. As you are the platform owner, you can promote your products and use advanced platform features without paying any fees!
Placing third-party advertisements on your multi-service marketplace is the simplest way to monetize your venture. However, it might not be simple to bring advertisements on your platform while you are new in the industry. Also, too many ads can irritate your audience. Consequently, they might get pushed away from your marketplace due to a degraded customer experience. So, it’s better to plan accordingly.
Now, you know about various monetization strategies for your multi-vendor marketplace. So, let’s move on to understanding the must-have features in your platform before going anywhere else.
Must-Have Features in a Multi-Service Marketplace
Features are the essential assets for your multi-service marketplaces. These functionalities differentiate your platform from others and help attract sellers and buyers.
So, let’s overview the must-have features to eye on for your one-of-a-kind multi-vendor marketplace.
Features for Sellers
- Seamless Registration
The sellers can join your platform after a successful registration. Since you want the vendors to register with your multi-service marketplace, you should emphasize a seamless registration process. It will encourage them to use your platform to sell their products.
- Product Listing
Once the sellers enter your platform, they can list their products on your marketplace for end consumers to find them online.
- Seller Profile
A successful multi-service marketplace like Amazon maintains seller profiles for consumer transparency. Your sellers can create their profiles and edit them to make them more appealing to the audiences. Besides, their profile can carry information critical for users to establish trust in the vendors.
- Seller Dashboard
Let’s agree to the fact that your sellers will list numerous products on your multi-service platform. Furthermore, they might require inspecting which products perform better in the marketplace and identifying strategies that work for their businesses. So, providing them with a detailed dashboard is necessary.
An additional advantage for sellers on your platform is advanced analytics. The vendors can track multiple parameters, get detailed insights, and make better business decisions quickly.
Features of Customers
- Hassle-Free Registration
Your users won’t spend considerable time registering with your platform. So, you should focus on making the registration process hassle-free and highly simplified for them. It will increase your marketplace’s popularity in the blink of an eye.
- Booking Feature
The booking feature is specific for multi-vendor marketplaces dealing in digital products or services. For example, you can build a marketplace selling courses. So, the platform should allow them to book the services whenever required.
- Search Tools and Categorization
A massive catalog of products and services makes it impossible for customers to reach their desired offerings. Right here, an advanced search tool and navigable categorization can simplify the customers’ lives.
- Seamless On-Site Checkouts
Buying or booking products and services require customers to transfer funds to sellers and marketplaces. The checkout process on your platform should be seamless, secure, and hassle-free.
A multi-service marketplace has better success rates if you allow the users to share their feedback regarding your services and offerings. So, your platform should allow them to provide generous reviews and ratings to various products listed in your marketplace.
Like other marketplaces, your platform should have an admin panel to track various performance parameters, understand the demographics, and create improvisation strategies for your business. So, apart from seller and customer features, admin panels are a must-have for your multi-service marketplace.
By now, you are already familiar with all aspects of multi-service marketplaces. So, it’s the best moment to discuss the initial steps to enter the domain without worries.
Are you ready to discuss the initial measures? Let’s dive in if it’s a yes!
How to Begin a Multi-Service Marketplace?
Indeed, building a multi-service marketplace changes your destiny. These platforms are taking over the consumers more rapidly than you think. But, the question is, how to begin your journey in the industry.
Don’t worry; we’ve got your back!
All you need is to adhere to the following measures to step into the domain effortlessly.
1. Understand the Audiences
The first checkpoint of any business journey is understanding what audiences expect from them. So, it’s better to understand the customers before setting up a multi-service marketplace. It will give you the right direction and assist you in deducing a profitable business strategy.
2. Choose the MVP
While you are an absolute beginner in the domain, understanding the market and customer expectations can be challenging. You might continuously encounter second thoughts regarding if the industry will accept your products.
So, an MVP with minimal features can help you. Developing them won’t drain your pockets and you can stay on the safest side.
Begin by realizing the critical customer pain points and identify MVP features that will solve their problems. Develop the first product prototype and quickly launch it by keeping marketplace quality in the foreground. It can reduce the time for app development.
Also, keep collecting user feedback and improving your product from time to time.
3. Decide Your Type
Now, the next and most critical aspect of your journey is deciding the type of marketplace you wish to set up.
Remember the marketplace types discussed earlier? You can choose any of those models and chalk out a business strategy around the chosen type.
4. Pick a Monetization Scheme
Now, you already know the class of your futuristic marketplace. What’s next?
Yes, you’re right!
It’s time to discuss the monetization scheme for your business. How do you wish to make money from the platform? Is it through indirect compensations, subscriptions, or something else?
It’s better to spend considerable time brainstorming the monetization part as it will decide the marketplace’s future.
5. Make a List of Platform Features
At this point, most, if not all, hard work is done. Now, you can freely focus on the look and feel of your multi-service marketplace.
You can pre-decide the features you will offer to different parties using your multi-service marketplace: sellers, buyers, and admin.
Since we have already discussed the features, you can quickly create a massive list and build a successful marketplace from scratch.
6. Collaborate With a Development Agency
Discussing marketplace development might create stress wrinkles on your forehead. You might be an excellent business person but developing a product from scratch is tedious.
It requires experience and tech expertise to build a unique multi-service marketplace. Right here, a development agency can help you.
You can find the best marketplace development company, collaborate with developers, and build the desired product in the shortest turnaround times.
7. Decide the Tech Stacks Together
You can spare some time to understand various technology stacks that your developers will leverage. It might give you an overview of the underlying architecture used in building your multi-service marketplace.
Also, you can ensure that your platform has the latest technologies and includes all the desired features. It’s an excellent way to maintain communication with your development company.
8. Product Testing
Once the developers create your multi-service marketplace and you approve their effort, the development agency will likely subject your platform to rigorous testing.
It will eliminate all possibilities of errors, glitches, and bugs. So, you can ensure that the multi-service marketplace delivers a consistent experience to sellers and buyers at any point in time.
9. Final Launching
Enough of drums rolling! It’s the showtime now!
After successful development and product testing, your multi-service marketplace is ready to roll out in the market. It has all the essential features and functionalities required to attract the correct sellers and desired audiences.
Now, your investment will begin converting in almost no time. Get ready to welcome the massive venture success!
10. Marketing Strategies
You can make your multi-service marketplace more visible to the sellers and customers using digital marketing strategies. These tactics target search engines, social media, and various devices to spread the word about your multi-vendor marketplace.
Before even launching the platform, you can strategize and create a buzz among your audiences. And once the product comes out in the market, you can work on optimizing the marketplace visibility.
The Bottom Line
Multi-service marketplaces are all the rage these days. Surprisingly, the future has better avenues for all platform stakeholders.
Now that you know how to begin your journey in the industry, it’s time to strategize, build a feature-rich multi-service marketplace, and generate massive revenues from your venture.