The rise of AliExpress and Amazon proved that we love to shop via online marketplaces. Having access to products and services from millions of sellers helps people all over the world find offers that match their needs. According to statistics, online marketplaces will eventually become the dominant way we sell and buy, accounting for over 50% of all shopping.
Creating such a platform yourself seems convenient as well – you don’t have to invest in warehousing and the scaling potential is almost infinite. However, there’s one problem all two sided marketplace platform owners are facing equally – user acquisition.
In this post, we will take a look at why it’s so challenging to connect users and sellers and explore useful hacks to help you grow your presence.
It’s no secret that offer selection is one of the key factors that makes users come and continue exploring your platform. When a seller creates his own inventory, expanding the product or service range is a tried-and-true way to appeal to more prospective clients.
However, when it comes to marketplaces, you have nothing to offer prospective clients. Instead, you need to attract people to come to your platform and promote their offers. When it comes to sellers, they choose platforms that have enough prospective buyers and aren’t eager to explore new-founded hubs.
This is the math behind the chicken-egg problem: to attract buyers, you need to have enough sellers and vice versa.
How do marketers deal with the issue? They attract the hardest side first – most marketplace owners start with securing a base of sellers. Once a network of reliable partners is built, it’s easier to attract buyers with customer-driven advertising.
The success of eBay, Amazon, AliExpress, and other online marketplace platforms is proof that there are dozens of ways to solve the chicken-egg problem – let’s take a closer look at these.
If you choose to start solving the seller-buyer conundrum by encouraging people to offer their products, there are plenty of strategies to fuel your progress. Here are some of the cheapest and easiest-to-implement techniques to help you understand how to get sellers for your online marketplace.
- Find vendors on top e-commerce platforms and get in touch. If you don’t have a seller network yet, make one by reaching out to Amazon, eBay, or Facebook sellers that meet the needs of your buyer target audience. Chances are, these vendors wouldn’t mind a chance to get additional exposure and would agree to promote their products or services on your marketplace as well. Reddit threads, forums, and other online communities can help you connect with vendors as well. To make the offer more lucrative, you can promise higher search ranking and promotion on the company’s behalf in return.
- Make publishing and managing listings easy. A poor user experience may be the reason a vendor will choose Amazon over your marketplace, so make sure sellers are comfortable managing orders via your platform. Create an admin panel where business owners can track the number of product or service listing views, offer assistance with publishing listings, and 24/7 customer support – this way, you’ll attract and retain more sellers and improve user acquisition. Don’t forget to create a knowledge base to help sellers and users navigate the platform – these reference documents will make the marketplace more intuitive.
- Find sellers offline. Connecting with vendors via social media and advertising is a powerful strategy – however, it is not the only way to build long-lasting partnerships. In-person meetings are highly efficient as well, so take every chance to connect with sellers on trade fairs, merchant association meetings, and other offline events. After getting to know people at local trade shows, write them an email or add them to your social media contact list to stay in touch and discuss collaboration prospects.
- Share the successes of the vendors you already have. To get in touch with new sellers, celebrate the achievements of the vendors that already chose the platform. Sharing success stories and interviews via a corporate blog and social media is a popular and efficient way to prove that the platform is reliable and promising. Take advantage of different ways to tell stories – both texts and videos.
- Offer efficient monetization models. As you launch an online marketplace and attract sellers, remember that they want to know exactly how much they need to pay for joining and using the platform. It greatly affects the seller’s level of trust and the final decision as to whether or not they should choose your platform. Be specific about monetization: are you charging a commission, a fixed fee per listing (Etsy chose this one), or collaborate with users on a subscription basis (a model adopted by eBay). To make sure sellers are comfortable with the monetization strategy you choose, consider running a survey among them via email or social media.
- Clarify the terms of collaboration. Sellers may be wary of your platform because they don’t understand how much they can make hosting products and services on your marketplace. To get rid of confusion or objections, be clear on the commission rate and describe the benefits of your collaboration framework. Top retailers like Amazon have a dedicated “Seller” portal explaining the terms and the benefits of publishing offers to the platform – consider following this practice as well.
Even if your marketplace has a solid number of offers, that alone is not enough to attract and retain new buyers. With the fierce competition on the market, retail managers only have seconds to convince buyers that their platform is the safest, most comfortable, and cost-efficient one.
How do you go from people having no idea about the platform to them shopping eagerly? Start by following these practical tips on how to drive buyers to an online marketplace:
- Make the platform easy to use. Since you only have a single shot at making the first impression, make sure you get it right. Reduce the website’s loading time by compressing images and writing clean code. Optimize your platform for mobile devices – according to statistics, 51% of Americans use smartphones for shopping. Work on navigation, making sure that all offers are categorized, there’s a search bar that makes finding the right listing easier, and a FAQ section that answers people’s most frequent questions.
- Invite referrals. Referral systems are one of the highest-yielding ways to attract more buyers to a newly found marketplace. According to statistics, a platform visitor will be 4 times more likely to make a purchase when invited by a friend or a peer. Such customers don’t only make their mind up more easily – they tend to come back more as well. Researchers found out that the rate of referred customers turning into regulars is 37% higher than those shoppers who came from other acquisition channels.
- Work on SEO optimization. Shoppers rely on search rankings for research – according to statistics, 75% of people will not even consider offers ranking lower than the top page of Google. In e-commerce, the fight for ranking is fierce, so you have to work extra hard to earn a spot. Make sure there are “title”, “description”, and “keywords” tags for every website page. Other than that, plan product and service categories and blog posts with relevant keywords in mind and add these to your on-page copy. You can use tools like Ahrefs or Google Keyword Planner to find out what people are looking for and which keywords your competitors are missing out on. Optimizing robots.txt and adding alt-tags to images are other important SEO tasks your marketplace marketing team should handle.
- Use social media to foster trust and build connections. According to statistics, 78% of Internet users browse Facebook before making buying decisions. Marketplace platform owners should recognize and leverage the potential of this and other platforms. Explore local Facebook buy-sell groups, forums, and announcement boards – hundreds of people come here every day looking for lucrative offers. Also, make sure to let website visitors know about your social media channels. Encourage them to like the page of the marketplace in exchange for a coupon or a better deal. If you can afford it, start a social media campaign that targets website visitors or people that could be potentially interested in online shopping. Keeping social media accounts running is time-consuming – however, it definitely pays off in the long run.
- Start a loyalty program. According to statistics, these are a powerful way to keep in touch with one-time customers and convert them into recurring clients. 77% of online shoppers have participated in a loyalty program at least once. The most popular loyalty programs are credit- or reward-based ones. To choose the right type for your platform, run a survey among the company’s clients.
When developing an online marketplace growth strategy, take your time to learn from the renowned names in the field. Let’s take a closer look at how top-notch retailers build connections with audiences by examining the top user engagement strategy examples.
Airbnb is another example of a marketplace that took the world by storm. At first glance, finding guests who’d be willing to rent a property to strangers and people who can risk living at somebody’s apartment is not an easy task. How did Airbnb manage to establish trust between guests and hosts and become one of the biggest property marketplaces?
- Pricing – according to statistics, renting an Airbnb is cheaper than staying at a hotel. Offering a wide range of competitive listings helps the brand attract more guests.
- Appealing to premium audiences (Airbnb Plus). The platform came up with a powerful way to address users’ security concerns. For an extra fee, you can access property listings with the highest trust score and best reviews.
- Marketplace user education. Airbnb blogs offer tons of value both to hosts and sellers. Here, you will find detailed listings on how to find the right accommodation, promote your offer, or ensure safety when traveling solo. Publishing relevant content increased the audience’s trust to Airbnb, as well as the company’s virality potential on social media.
Etsy is the world’s leading craft multi vendor marketplace that needs no introduction among artists all over the world. Over the last ten years, the platform became one of the retail giants, worth over $3 billion.
How did Etsy get there? Let’s take a closer look at the building blocks that brought the platform to the top.
- Knowing its target audience. Unlike eBay or Amazon, Etsy doesn’t chase universality. Instead, it focuses only on distributing handcrafted products. The platform skillfully appeals to sellers by publishing helpful guides on monetizing artwork and helping creators find a buyer. On the other hand, buyers feel proud to be a part of the marketplace – over time, Etsy started associating itself with high-quality art, so joining the platform feels like becoming a part of the elite.
- Building a strong real-life community. Unlike most retailers, Etsy didn’t focus its promotion efforts on digital marketing. Instead, the company invested in real-life gatherings, encouraging creators to host workshops, share experiences, and meet shoppers face-to-face. In a way, joining Etsy feels like going to an after-school club – here, you can find friends, have fun, and learn something while you’re at it. As a multi vendor marketplace platform owner, you can choose the same strategy, creating a real-life hub for shoppers and sellers in your community.
- Being brave enough to scale. In 2013, Etsy noticed that companies, not only individual creators, were interested in publishing listings on the platform. The company responded with a brave but necessary change – allowing marketplace sellers to hire manufacturers and moving away from the handcrafted-art-only positioning. At the end of the day, this allowed the brand to broaden its reach and scale its influence.
Upwork is a poster case for a marketplace that fully relies on people interacting with each other. Aside from a functional and easy-to-use platform, the owners of the job board don’t have much to offer. Yet, they managed to build one of the most successful businesses of this century. How did Upwork gain traction and scale its impact? Let’s find out.
- Collaborating with startups. According to the company’s SVP of marketing, working with early-stage startup owners helped Upwork grow and develop at an impressive pace. CEOs and founders eagerly published job openings after networking with the Upwork team at startup conferences.
- Betting on a community. Upwork executives wanted to make sure that employees and freelancers had a physical connection with the company. To this day, Upwork hosts regular workshops and meetups to help freelancers and business owners improve, exchange knowledge, and grow professionally. In the company’s early days, investing in a community forum was an investment that paid off tenfold – as a marketplace owner, consider building a brand-centered community of your own.
- Improving constantly. Upwork designers and developers made improving the marketplace a continuous effort. Dozens of new features were implemented because employees and job-seekers missed them – detailed profiles, job success scores, and many others.
Running a marketplace is an ambitious and potentially rewarding project. However, you will need to take your time creating user acquisition strategies. Business managers, when thinking about how to start a two sided marketplace, need to focus on every aspect of their user experience when launching their projects – from functionality, interface, and performance to marketing and sales.
To make sure you build a user-friendly, scalable, and easy-to-use marketplace, contact Eastern Peak. We will help you determine how to grow your online marketplace, with state-of-art navigation, payment gateway integrations, and a sleek interface. Your marketplace will be easy to use, memorable to look at, and cost-efficient in maintenance.
We are looking forward to helping you build a next-generation marketplace. To discuss your project, leave us a message.
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