4 important things to know when scaling a marketplace
In the early stages of your marketplace development, it’s important to know that you’re constantly adapting to the needs of the people and the trend in the market
Starting any business is hard and comes with many challenges, but growing is even harder. In building a marketplace, one of the most difficult tasks is to maintain the balance in supply and demand. You want to make sure you have enough buyers and sellers to keep the business running.
Problems in scaling a marketplace is unavoidable, and they can take many forms. It could be an angry customer that received a wrong order, or a clash with the local government and traditional industries in operational regulations.
So what are four key thoughts you need to consider when you need are scaling your marketplace?
Don’t expand or pivot too quickly
You want your marketplace to see signs of traction as soon as possible. That’s understandable, but you need to be patient and accept the fact that it takes time. It’s not the end of the world if you haven’t see any significant growth after 9-12 months from launching.
Remember that you need to create both buyer and seller communities, and that’s no small task. Reassess and changing your market’s direction too soon or expanding too early could be harmful in the long run, the foundation needs to be solid before you can move on to the next step—otherwise it’ll crash later.
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It took 10 years for Etsy to aim for IPO and seven years for Airbnb to be valued at US$13 billion. The bottom line is, stick to your plan as long as you can and be patient.
Narrow your market focus strategically
It’s most likely that marketplaces have limited resources when starting out. With that in mind, it’s wise to not overspend your budget on targeting multiple markets. Instead, focus on building a single or few markets.
You need to make sure that your business effort in smaller and vertical markets will work before you expand. Location plays a big role too, for example; if your marketplace connects farmers with buyers and you’re reaching out to coastal cities—it’s won’t work well.
When you’re narrowing your focus, you’ll have more time and hands to offer personalisation in your service. It can be beneficial because creating a unique experience for customers can ultimately boosts trust in your branding.
Build trust with users
Marketplace industry relies heavily on trust and it requires a lot of efforts to build it. Your marketplace needs to be trustworthy and reliable in order for people to use it. If buyers don’t trust the sellers on your marketplace platform, your business is stuck.
Having an efficient background checks, adequate insurance, legitimate customer rating system, testimonials—are just some things people look for when using a marketplace. Being transparent in the way you operate your marketplace is one of the easiest way to gain credibility.
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It’s also crucial to deliver what you promise. If you claim to be “the cheapest and fastest delivery service” or “homestay experience better than Airbnb,” you need to prove it. Fail to do so will cause customers to think twice in trusting your brand and using your service.
Do something extraordinary
You’ve followed the book step-by-step in scaling, yet unsatisfied with the result. Then try to do something extraordinary. Deliver something unexpected and amazing to your customer that they didn’t see coming.
From sending coffee mugs to new customers and having groceries delivered in reusable shopping bags, to free movie tickets on birthdays, these surprises will leave a pleasant impression for customers.
It varies depending on the type of marketplace, but offering special gestures in scaling your marketplace will set you apart from other competitors. Unique experience matters and this is a good reason for people to come back and to choose your marketplace.
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To check all the boxes on the list of things to do in scaling a marketplace is tricky. But you can prioritise them and add more as you go.
In the early stages of your marketplace development, it’s important to know that you’re constantly adapting to the needs of the people and the trend in the market.
Consider different routes and don’t hesitate to look for inspiration from others, doing so will just make it much easier for you to grow your marketplace.
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Kenneth Low is a co-founder of Arcadier, a SaaS company that powers next generation marketplace ideas. Follow Arcadier on Twitter, Facebook, and LinkedIn for news and updates.
The views expressed here are of the author’s, and e27 may not necessarily subscribe to them.e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your article here.
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