Build/create/development and the making of Revenue Model – are essential steps of formation of the Effective Business related to the Online Marketplace.
All people who are somehow connected (or simply familiar) with the world of digital business know that in order to create a successful project, you need:
Work hard on technical implementation
Develop your business logic (business plan for online marketplace).
This article is a small introduction to the questions related to the creation of online marketplace.
What are the differences between business platforms?
Nowadays, there are three types of business:
B2B (business-to-business) Connection scheme: manufacturer/producer (Company 1) → Service provider (Company 2) → End-user. Examples: Fooducer, TradingTable, and Alibaba.com.
B2C (business-to-community) Connection scheme: company/organization → End-user. Examples: Avis and Booking.com.
P2P/C2C (peer-to-peer; community-community) Connection scheme: User ↔ User. Examples: Meals unite and OLX.
Another division of types of marketplaces:
Vertical (single-focused and oriented for the one niche). Examples: Booking.com and Hertz;
Horizontal (universal orienteer, so people could sell/buy anything). Examples: Amazon, Alibaba.com.
Also read our article: 10 Best and Simple tips of building B2B Marketplace step-by-step.
How to build a two-sided marketplace?
So let’s find out the main steps of the creation of online marketplace business model canvas.
1 step: we need to decide which one of the three above types of marketplace platforms we are going to develop in our marketplace model. We will consider the case with the development of peer-to-peer online marketplace. Namely, web/mobile P2P platform for sale and exchange of rare comic books.
2 step: determine the auditory.
Adult people that want to sell or exchange comic books (from one copy to the whole collections)
Authors and artists of original books, who want to sell their finished works.
3 step: On-demand products We need to understand the market and understand what consumers want and what products are in demand.
So let's think about what the various users want:
Comic book fan
A typical comic book reader wants to create a profile quickly and easily. In addition, he will not mind adding his collection of comic books and will want to see the collections of other users.
need a worldwide-connected platform, so he can easily sell or exchange his comic books to other people.
wants to talk about different issues related to the comic books on chat rooms and through individual messages.
wants various shipping / payment options.
wants to be able to store and read copies (that were received) online for an unlimited number of time.
wants to monitor his income and see the history of sales/purchases.
wants to see various pricing options – to select a suitable price category.
wants to see nearest shops, exhibitions, events related to the comic books.
Also read our article: Angular 6 vs React vs Vue (Best Choice).
Original author or artist
He wants to be singled out, indicated that he is the original author or comic artist and that his product is not fake.
Wants to put a list and sort his own creations.
Will be happy with various payment acceptance options.
Wants to monitor statistics and see profiles.
Chatroom and private messaging is an advantage.
A nice addition – is to be a seller and the customer.
Features for customers
Auth, authorization methods by phone number, email, Google+ or Facebook;
Switching between seller/customer profiles;
Different options for secure payment (PayPal, SEPA, Visa or MasterCard cards, Stripe, etc.
Partnership with delivery services all over the world.
Dashboard for users public and personal information (list of comic book collections included).
Monitoring option - to view profiles of other users and see info about exchange/purchasing opportunities.
Cloud storage for received products, which will be available for the unlimited number of time.
Online reader system – for reading comic books that were received by the user.
Online tracking and GPS - to see nearest events and stores.
Search filters (price filter included).
Data protection and Author’s rights.
How to monetize a marketplace properly?
Based on our chosen example, we can go three ways:
Free (limited functionality, try out),
For Creatives (various features for writers and artists),
For Readers (expanded features).
If the user wants to upgrade different functionalities (like finding events, cloud storage, adding unlimited copies of different comic books, or expand additional rights), he has to pay.
Main details of monetization strategy include internal sales, percentage / sales charge, app advertisement, free trials, money from subscriptions. A properly designed business plan for your service will help determine the volume of distribution of products.
How to increase revenue from the online marketplace?
Here are some tips:
Listen to the customers. Consider preferences and allow people to evaluate the product and your services.
Collect statistics of what people like, what they think about your service, let them share their emotions and get new opportunities from your online platform.
Be in a trend, but do not forget to be unique. After all, people always follow fashion and follow trends. Therefore, we must strive to create something new, unique in its own way and very popular. This way people will reach out to you.
Do not forget about large events and exhibitions, or create your own.
Experiment, and find the right approach to your customers.
We hope that it has helped you to understand the different types of business, as well as planning the online marketplace. So, do not forget to determine the right market for business development, and do not forget to think about people and their preferences. In this case, success will be guaranteed.
In case, you got left any questions or suggestions, feel free to contact us and we will assist you in any inquiry!