Digital marketplaces are the engine of modern eCommerce, accounting for 47% of global online purchases in 2019. And while the giants like Amazon and Alibaba account for the lion’s share of those sales, smaller brands are increasingly emerging as important marketplace operators.
In fact, Gartner estimates that by 2023, 15% of medium- to high-value merchandise brands will have launched their own marketplaces. The trend is likely to transform not just the B2C transactions prized by Amazon, but also B2B procurement processes that until recently have taken place in showrooms or as a result of sales calls and site visits.
With so many marketplaces, there will be plenty of misfires along the way. To ride this wave successfully, new marketplace operators need to understand what makes marketplaces so powerful, and how to translate their understanding of their industry and customers into a successful space for buying and selling. That’s especially true, of course, for B2B brands that are trying to convince enterprise buyers to take the plunge into online sourcing.
Here are five key lessons every new marketplace operator should take to heart:
1. Streamline, streamline, streamline. A big part of the value-add for marketplaces is taking sales processes that ordinarily involve showrooms and salespeople, and turning them into a transaction that can be completed at the click of a button. Far too many shopping carts get abandoned at the last minute, so make sure you’re doing everything you can to streamline the sales funnel, and that you aren’t inadvertently introducing new points of friction by requiring potential customers to jump through hoops or engage in time-consuming and repetitive tasks. Streamlined self-service tools and checkout features can go a long way, but don’t overlook the situations in which customers need assistance. Make sure you’re giving buyers the ability to seamlessly request quotations or additional information from your sales team just as easily as they can click-to-purchase. Don’t neglect seller and buyer onboarding, either: the ability to set up payments and disbursements, manage taxes, or put infrastructure in place for cross-border transactions are all crucial features.
2. Build trust. Buying online can be a bit unsettling, especially if you’re used to dealing with real human beings or making purchases in person. Perhaps that’s why 90% of online buyers read reviews before making a purchase — people crave trust and the sense of connection. That means trust is way more than just a feature — it’s a strategy your platform will need to execute on if you’re going to retain customers. Make sure you find creative ways to allow buyers to rate goods, services, and sellers in your marketplace. This is one area where it pays to take cues from Amazon: easily searchable user comments, buyer-to-buyer and buyer-to-seller Q&A features, and flagging to validate reviews as coming from real product owners all help build trust.
3. Discovery is key. Whether you’re selling to consumers or businesses, a smart search function is a must-have for any eCommerce platform. Make sure that users can find what they need based on product names and descriptions, but also keywords, geographic location, and SKU numbers. And remember, surfacing products is only part of the story: You’ll also need to make sure people can surface the precise information they need. For B2B marketplaces, that might mean giving buyers the ability to request a quote for a particular product or service, and sellers the ability to automatically approve certain kinds of quotes, or to convert quotes into orders at the click of a button.
4. Integration is an opportunity. If you’re putting time and effort into setting up a marketplace, it might seem strange to let other providers piggyback on your infrastructure. But in fact, integration is a major strength for marketplaces. Use flexible APIs and other integration options, along with proper documentation, automation, and technical support, to ensure third-party services can mesh with your marketplace. The result: a simple and easy to maintain eCommerce ecosystem that adds deep value for buyers and sellers alike, and doesn’t require much from you or your team.
5. Find the right partners. When you’re setting up a marketplace, there are times when it makes sense to build from scratch, and times when it makes sense to use platforms developed by outside vendors. Often, the best solution is a hybrid approach, using an open-source codebase that comes ready-to-use, but lets you customize your deployment and adapt to your changing needs. Either way, make sure your platform is designed for your specific needs: building a B2B eCommerce marketplace using B2C software and tools is unlikely to give you the features you need to succeed, for instance.
If you can get these five things right, you’ll be well on the way toward developing a successful marketplace. Of course, there’s plenty more to investigate: we’re increasingly seeing marketplace operators explore the use of mobile technologies, for instance, and AR and VR interfaces are starting to gain traction. We’re also seeing voice search and AI-powered personal assistants emerge as major factors in many marketplace scenarios.
Still, you don’t need all the bells and whistles in order to build an effective marketplace; you just need to know your market, know your customers, and put the right software solutions in place. For ambitious brands, building a marketplace can open the door to big new opportunities — especially in the new, post-pandemic world of widespread B2C and B2B eCommerce. With 2.14 billion buyers expected to make online purchases this year, the potential for new marketplaces is enormous — if you pay attention to detail, and make sure you get the basics right.
Yoav Kutner is the CEO and co-founder of Oro, Inc., the company behind B2B eCommerce platform OroCommerce. Yoav previously co-founded and served as the CTO of Magento.