Wondering how to create an online marketplace? This post outlines the most important steps you must take in order to build a successful digital marketplace.
From Yelp! to Lyft, the existence of so many successful niche marketplaces proves that clients want guidance when it comes to finding service providers.
Due to the overwhelming number of choices that come with varying levels of trustworthiness, consumers don’t want to perform a cold search and simply choose one of the first options that pops up. Instead, they seek out facilitators who can easily connect them with a credible business or individual to meet their specific needs.
Meanwhile, providers want the chance to build credibility and advertise their services to the exact people who are searching for them.
Where these needs intersect is the point where a third party has the opportunity to create a platform on which the others can connect. This platform should offer a wealth of relevant information and advice to help both parties make wise decisions.
In order to establish a successful two-sided marketplace, you have to pinpoint the needs of both groups, streamline the choices to create exclusivity, and establish yourself as an authority in the industry that you’re mediating.
Let’s look at each of these critical steps as we explore how to create an online marketplace.
Anticipate Both Parties’ Needs
What do clients want from an online marketplace? What do service providers want?
Think of how intermediary companies fulfill needs of users on opposite ends of the spectrum. For example, Airbnb connects travelers searching for an affordable place to stay with home owners who have an extra room or apartment and want to make money by renting it out.
On the client side, users want to be able to see good and bad reviews, view photos of the space, and know that the service providers have been screened and so far determined to be non-threatening. They go to Airbnb for the accessibility of hundreds of options that they can compare using the information given.
On the provider side, hosts benefit from advertising their service to the people looking for it at no cost. When a purchase is made, both parties pay a nominal fee to Airbnb for offering them safe and easy access to one another.
Anticipating both parties’ needs means providing cohesive online materials, namely a fully functional and intuitive website or mobile app. It should be easily navigable for both parties, even if that means creating a point of access on the home screen that leads the clients in one direction and the service providers in another.
Make sure your website or mobile app has a clear and separate call to action. For example, Care.com’s “How it Works” page is careful to create separate flows for care seekers and care providers with the option, “For You & Your Family” and the alternative, “For Caregivers & Service Providers.”
Every visitor knows how to proceed from this point based on his or her needs.
Streamline the Choices
If a marketplace doesn’t narrow down options, it’s hardly more useful than a search engine.
To assert yourself as essential in the client/provider relationship, you have to be the open HOV lane that rescues everyone from the solid block of stop-and-go traffic. You have to be, to some degree, exclusive.
Clients have a few concrete goals: they want to save time, avoid being taken advantage of, and know that their problem is going to be efficiently solved. Meanwhile, the contractors also want to save time by using your platform as a way to drum up clientele and build trust with prospects through reviews and testimonials.
Limited Set of High Quality Options
For this reason, you should present a limited set of high quality options. This benefits the service provider because they will have fewer listings to compete with, while the client can feel confident that a quality standard has been set.
One of the best ways to present limited high quality options is to install a screening process as a prerequisite to membership. If you don’t want to use a screening process, create an elaborate profile template that plays a role in search rank.
Rover is a great example of a company that incentivizes service providers to fully flesh out their profiles — you can’t even get started offering pet care through Rover until you’ve completed a profile that includes photos, preferences, availability, per-night rates, and even testimonials from past clients. Everyone who joins has to agree to certain terms and services.
Pricing Strategy
Another way to separate the wheat from the chaff is to charge for your services, which incidentally is the perfect business model for an online marketplace that efficiently connects clients and service providers.
Like Airbnb, Rover charges a standard fee for every deal facilitated by its platform. Care.com, on the other hand, gives caregivers a chance to pay a fee in order to bump their profile higher in search results.
Easy to Use
A third facet of streamlining is making it easy for users to find exactly what they need. If someone visits Angie’s List looking for carpet cleaning services, they should have the power to filter their search accordingly and immediately find relevant results and reviews.
On the other hand, you might want your marketplace to function more like an independent platform, especially if your business has goals outside of connecting service providers and clients.
For example, Modernize is an inspiration hub for any and all topics related to home renovation and interior design. It also produces content for independent bloggers and websites relevant to its focus. Additionally, home professionals can create a profile for visitors to the site to sift through when they’re looking to hire for specific services.
In a case like this, when the format is more like a listing than a matching service, it may not be necessary to mediate or charge a fee.
Build Your Own Brand
Developing a marketplace means doing more than just facilitating. You have to establish yourself as an authority in your industry. Create original, high quality content and curate relevant content. Impose the same criteria across the board.
Build your brand on what you allow and don’t allow. For example, if you don’t mediate hateful or inappropriate reviews, you are not establishing yourself as a safe and family-friendly service, but you may be establishing yourself as a purveyor of unbiased feedback.
If you require participating contractors to respond to requests for service within a certain amount of time, this means more work for you in making sure those providers adhere to your rule. But it also means that you have earned a reputation as a service connecting people efficiently.
Think about what you want your company to mean to the people who use it, and develop all content, screening, and services based on that vision.
When beginning to create an online marketplace, remember that you are here to solve a problem. With your clients’ and providers’ needs in mind, a selective inventory of options, and a strong brand, your digital marketplace can cut a clear path across the winding and evolving landscape of sales and services.
Featured image via LegalVision
