How to start an online marketplace?

Start with a marketplace business model

Have you come up with a super cool online marketplace concept for which you are considering online marketplace development? Maybe you have several ideas. But how do you find out what a good online marketplace business model is?

Set up a marketplace for a good business model
In this article we take you along to determine what a good online marketplace concept is and how you can turn it into a good online marketplace business model.

A good online marketplace business model answers the following questions:

  • Does your online marketplace concept solve a tangible problem?
  • Is there a market you can reach with your online marketplace concept?
  • Are there marketplaces for this concept and can you offer something extra?
  • Is your online marketplace concept close to your own interests?

Building an online marketplace to solve problems for users

Have you come up with your own fantastic marketplace business model and do you want to set up an online marketplace? Investigate carefully whether the marketplace concept you have really solves a problem.

Example for setting up a marketplace
Suppose you want to build an online marketplace where dog owners in Amsterdam look for people who want to walk their dogs. People in Amsterdam have a busy job, but want to enjoy the presence of a dog in the evening. It would be great if there are people available during the day who want to walk your dog.

Research the target audience for your marketplace
When you discuss this with others, several will agree that it is a good online marketplace business model. It remains important to investigate whether there are enough people living in Amsterdam who own a dog.

It is also important to investigate whether there are people available during the day who want to walk dogs.

If there are no people with a dog or if there are no people who want to walk the dog, you will not solve a problem with your marketplace. Building an online marketplace for this is then pointless.

'Building a marketplace usually fails because it's set up for something that doesn't really solve a problem.'

Developing a marketplace for solving multiple problems

Solve at least two problems
Often building an online marketplace to solve just one problem is not enough. For the greatest chance of success, you must solve at least two problems. Every marketplace has a supply and demand.

Set up a marketplace for providers
A provider places an offer for the solution of a problem. For example: I don't have enough money (problem), but I have time during the day. That's why I sign up as a dog walker to earn some extra money.

Create a marketplace for buyers
The questioner also has her problem: I can't walk my dog during the day, so I'm looking for someone who wants to do that for me during the day. That person therefore searches the marketplace for a dog walker or places a search ad.

With this marketplace a problem for the supply and demand part can therefore be solved.

Setting up an online marketplace for a good market

You can create an online marketplace for almost any market. Can you think of a market?

developing a marketplace that suits your profession
Take a look around you. Are you a singing teacher? How about building a marketplace for singing lessons? Are you a teacher? Why not set up a marketplace to sell online teaching materials to other teachers or perhaps directly to students.

Set up a marketplace for your hobby
You can also look at your hobbies. Do you like lifting weights? Why not create a marketplace to let people make appointments so they can meet workout buddies and train together. You can't think of it that crazy. You can develop an online marketplace for almost anything.

Building an online marketplace to realize your members' goal

You want to facilitate a new collaboration on an online marketplace. Collaboration to solve a problem. What kind of problem could that be? Often the problem is in one of the following segments:

  • Money: think of crypto trading, crowdfunding or borrowing money. Examples of such marketplaces are: Binance and KickStarter.
  • Learning: think of linking teachers to students, offering teaching materials or perhaps bringing students into contact with each other about a certain subject so that they can benefit together.
  • Goods: think of sharing knowledge about products, lending / borrowing products or buying second-hand products.
  • Living space: think of renting out rooms, buying real estate or renting workspace. An example of this is Airbnb.com.
  • Transport / transport: think of developing an online marketplace to solve a transport problem. For example, you have various scooter sharing marketplaces in major cities, but also Uber for taxi transport.
  • Meals: developing an online marketplace focused on meals? Many marketplaces capitalize on this. For example, think of Just Eat.

Developing a marketplace for an easily accessible market
Have you found a market for which you might want to create an online marketplace? You also have to be able to reach the market well and they have to be willing to pay for it. Because you don't set up an online marketplace out of charity. How will you reach the market?

Are there small providers for your marketplace?
Building an online marketplace works best in areas where many small providers offer their services and no large party controls the entire market. Those small providers are willing to register on your marketplace in order to generate leads for its services.

Set up a marketplace to compare providers
Your marketplace then forms a valuable channel for the buyers of those services. They can compare all providers for the same services and thus easily find the best provider. Provider and buyer are willing to pay for this because your marketplace can save them time.

Developing a digital marketplace to improve the existing situation by simplifying contacts

You don't set up a digital marketplace for a new product or service. Book a taxi, reserve an apartment or order food? Nothing will be changed about such a service. What you can change is adding an extra layer that makes it easier to find and purchase such a service.

Build a marketplace to link unknowns
You bring strangers into contact with each other online with a digital marketplace in order to enter into a new collaboration with each other.

Developing a digital marketplace with a focus on a goal

Are you going to develop a new digital marketplace? Then focus on a goal in the marketplace. By focusing on just one goal, you can set up your digital marketplace specifically for that goal.

Don't start a marketplace with a broad focus
Setting up a digital marketplace with a broad focus (multiple goals, such as finding an apartment, ordering food online and booking activities online) ensures that you cannot focus your marketing on one goal, the development of the marketplace becomes more expensive ( you need more functionality and especially that your target group accepts the marketplace less quickly.

Do you want to build a digital marketplace with limited resources? Then it is especially important to focus on a goal.

Start a marketplace for a limited market
When setting up a digital marketplace with limited resources, it is also wise to focus on a small market. To take the example of the dog walking service in Amsterdam as an example: you can easily reach the target group with dogs in Amsterdam.

When someone signs up for a walking service in Amsterdam, there is a good chance that they will find someone to walk their dog.

Global Marketplace Challenge
Do you want to set up a global digital marketplace right away? Then you need a large marketing budget. You must then have a worldwide supply. Suppose someone is looking for a dog walking service in Paris and there are no providers in Paris, then your marketplace will deliver a disappointment.

Build a marketplace yourself?

Check out our pitfalls and tips