5 Steps to Start an Online Marketplace | E-Commerce Marketplace #ecommerce #marketplace #online

47% of digital purchases worldwide, happen via online marketplace platforms
89% of buyers said they were more likely to buy from Amazon than any other e-commerce retailer
People trust marketplaces over exclusive brand websites for shopping
5 steps to start an online marketplace:

1: Niche Evaluation
In order to succeed, Having a niche is extremely important.
It is extremely difficult as well as competitive to replicate to Amazon, where you get everything, as the logo says: A to Z

04 steps to deciding your NICHE are:

a. Starting with Marketplace Business Model, there are various types of business models like B2B, B2C, P2P, or even Service-based models.
Ex. of a B2B Marketplace could be Amazon Business, industrybuying.com, Alibaba, E-world trade.
B2C Marketplaces like Amazon, eBay , Walmart, Sephora
P2P Marketplaces like OLX, Airbnb, Etsy, etc.
And service-based marketplaces like Urban Company, Upwork, Fiverr

b. Industry:
You must decide on the industry you wish to cater to. Example: it could be fashion (i.e. apparel, shoes, jewelry, accessories, etc), Furniture, Grocery/ Consumer Packaged Goods, Beauty, Home Services, etc.

c. Category:
Decide the product or service categories you wish to sell.
Example: In the case of fashion: it could be the footwear category with a further niche of only sports shoes. In the case of furniture: it can be home furniture with a niche in Sofas, in the case of beauty, the niche can be personalized beauty services at home and this list can be endless.

d. Target Group & Brand Positioning
Finalize the demographics you wish to cater to, in your brand positioning:
Are you offering value-based products & services or premium ones?
Are you targeting millennials, Gen X, Y or Gen Z, or Boomers?
Which are the Geographies you wish to start with, and later expand to?

2: Validating your idea with Market Research
Market Research can help you understand how the other players in your category are performing? Are they profitable? Have they raised investments? What is their marketing strategy? Are they growing? How many visitors do they have on their website?
What is the bounce rate on their website?
Market Research can also help you understand the product categories and its demand. After you have listed down the categories you wish to sell on your marketplace, you can identify the overall demand for these products within the geographical regions you wish to sell, At what price are the other players selling? Top-selling products within the category
Market research acts like insurance for your business. It can save you from major losses by helping you take data-driven decisions

3: Business Plan
The business Plan’s major objective is to forecast the inflow & outflow thus preparing you for the cash flow requirement, over a period of the next 3 to 5 years. To plan, what exactly would be required to make this model successful.
To Plan for the worst-case scenario, wherein what you may have to forego if it does not fall as per our plan. If you are planning to take investors on board, then Business Plan becomes inevitable.

4: Business Operations Strategy
It starts with people strategy i.e. how many team members are required? Which activities need to be outsourced? Next, is your IT strategy i.e. what software would you require to build your marketplace? Here it's advised to avoid re-inventing the wheel & use platforms that can help to plug and play
Next is Supply chain strategy i.e how would the last mile delivery happen to the end consumers? Do you also plan to fulfil on behalf of the sellers listed on your platform? & several such critical areas of your business operations to be finalised.
Building SOPs for your business operations and robust IT systems will act as a key differentiator in comparison to the other startup competitors

5: Carving out a Critical Pathway & Implementation
List down all the activities, all the tasks right from inception to launch and build a milestone structure. Appoint a Project Lead who shall ensure all the tasks until launch are followed-up and executed. Getting things done shall be the responsibility of the Project Lead. Ensure you have an organised approach while executing these task, failing which, Do not be surprised if your project is delayed by a few months!

TAT:
If you are planning to start your own marketplace, do not miss to budget for the marketing activities as, being a marketplace you need to spend for both, getting vendors as well as getting customers. Your vendors are also your customers. As marketing is going to be one of your major expenses affecting the business plan or the financial model, you must get into this business only when you are ready with marketing funds for the next 12-15 months in hand so you don't run out-of-cash midway and have enough time to get investors on board.
Thank You

MUSIC USED: Alec Koff - @YouTubeMusicLibrary

0:00 - Intro
0:37 - Step 1
2:23 - Step 2
3:17 - Step 3
3:45 - Step 4
4:25 - Step 5