A growing two-sided marketplace is one of the better businesses to run. It is probably one of the holy grails of online business models. In a two-sided marketplace, buyers and sellers conduct transactions into a centralized platform. Both sides of the marketplace are self-organized. Let’s we discuss two-sided market and how to build a two-sided marketplace for your online business.
What is Two-Sided Marketplace?
The term indicates to a website where the customers and vendors meet. The website plays as an intermediary helping simplify transaction, payment, product discovery, and a lot more. Additionally, the two-sided marketplace platform owner gets a percentage of every transaction. It also allows groups of producers and buyers to interact with one another and builds network effects among them by this platform.
The platform’s business model is to get a percentage of the transacted value for connecting vendors and buyers. The two-sided online marketplace platform doesn’t provide its own products. Preferably, the platform owner manages relations among the online customers and third-party creators. The Two-sided marketplaces can be challenging to execute successfully, but many of today’s most profitable startups are two-sided marketplaces.
How to Build a Two-Sided Marketplace?
There are three crucial factors in building a thriving two-sided online marketplace.
Platform – A two-sided online marketplace takes together user groups with different goals (buying or selling).
Buyers – They are the users who need to buy goods or services.
Sellers – They are also the users who need to sell those goods and services.
Let’s have a look at the essential tactics for building a two-sided marketplace. We are giving these tips in terms of industry and exact business model.
1. Find a Profitable Niche
Your real challenge is to find a particular niche market and consume it entirely before extending into nearby markets. The way to determine your niche is to look at global two-sided marketplaces and observe the market they are either over-serving or under-serving. If the two-sided market is over-served, e.g., by Upwork you can attempt taking it with by giving a lower cost product. Moreover, if the market is under-served, you can reach your buyers with a more distinct and focused product.
2. Start Doing Things that Don’t Scale
While the beginning, you will likely be the one solving your client issues yourself in one way or the other. When you are non-connected current systems or substances, possibilities are you will have to dig deep into solving their problems yourself at first.
There are many people recommend that you need to be focusing on supply first. But, in most case, this is the wrong method of looking at things. While the switching costs compared with clients not getting what they need is insignificant, they will simply leave if you have no supply. The supply side is more comfortable to hack in the beginning stages.
If you have a great demand side, you will have the capacity to get an ever-increasing number of peoples on the supply side too. The demand side is the stuff with the money, and that is always a good plan. One of the main reasons for the two-sided marketplace startups fail is that they are focused only on the supply side to find out it is hard to retain suppliers.
3. Build a Community
The ultimate goal of building a two-sided marketplace is to create a business model that often scales as the power of the community allows any side of the marketplace to self-organize and develop with low customer purchase or retention costs.
To build a community, you require to be purpose-driven and have a standard goal with your community members. You need to associate and empower your community members. Maintain your focus on the community purpose and be careful about your decisions concerning the community culture.
4. Create Content
Creating a content empowers you to build an engaged audience throughout a topic, and that is essential for a business model that depends on customers activity to be successful. By writing guides, and tips for your marketplace niche, you will learn to use the power of content for SEO purposes. And it will build the trust factor that is very important to the success of a two-sided marketplace.
Content is always a great way to build relationships. It is vital for when you are making your community. Remember that you require empowering your users. Although, providing them an opportunity to write for your blog can also benefit their vision. Furthermore, you can utilize that as a tool to drive up engagement.
5. Preserve and Don’t Give Up
Initially, two-sided marketplaces will start at a slow pace. Before scaling, you have to maintain and gradually enhance your product while waiting for a chance to hit the accelerator when the network impact kicks in.
If you are always pivoting, you can not make a community and keep the focus on your community members. This is the primary thing we think different when creating a marketplace instead of a lean startup. You can not easily hack a community and build trust. Although, you can not reward growth speed with money.
Industry Leaders in the Two-Sided Marketplace Business
Before invest in building a two-sided marketplace platform, you need to get an intense look at the latest trends. Every year, there are many new players appear in the industry. And giving the attention to the most successful things is the only good two-sided marketplace businesses.
For instance, multiple successful new two-sided online marketplace businesses are focused on vertical markets. That indicates the goods and services traded all correlate to a single industry, or vertical. Some current examples of this include markets dedicated to banking, accounting, agriculture, and others.
Here are a few such a two-sided marketplace projects that are worth studying. If you are establishing your own startup in the space, these will grant you some useful ideas.
Etsy – One of the most significant examples of the business model, It was one of the first to create a community around its niche market.
Rover.com – This two-sided online marketplace was built for pet owners. It incorporates a wide range of pet-related services, including dog walks, pet sitting, drop-in visits, and dog boarding.
Bonanza – It is a seller-centric marketplace platform targeted at home businesses and entrepreneurs. This two-sided marketplace specializes in accessories, pre-owned clothes, and online jewelry businesses.
Society6- This two-sided marketplace platform is built for artists and art lovers. The artists can upload the images of their work, which can cover from wall decorations to phone cases.
Build Your own Two-Sided Marketplace with ionwe
Building a two-sided marketplace is widely recognized as a difficult, but potentially lucrative opportunity. There are many marketplace scripts available in online to create a two-sided marketplace. We have the sophisticated two-sided marketplace software that is “ionwe.” It is the best marketplace software and it consists of excellent features, revenue, and business model to build an efficient two-sided online marketplace.
If you are really interested in building a two-sided marketplace platform, you can consider ionwe. We will assist you to develop your own two-sided marketplace platform. Moreover, ionwe gives you the unique features based in terms of latest industry trends and exact business model.
For more details or consultation about our two-sided marketplace software, keep in touch with us at ionwe.com or call us to +91 9884203777. You may also send your queries to firstname.lastname@example.org