Fotis Kourmadas CMO CS-Cart Europe
An online marketplace is a place where you can find products coming from multiple vendors, would they be brands, shops or persons, in the same platform. The marketplace owner is responsible for attracting customer and keeping track of money transactions, whereas the third party vendor is dealing with manufacturing and shipping. Marketplace is not holding stocks, and the manufacturer sells directly his own products.
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Online marketplaces are hot
NO NEED to have your own inventory
NO NEED to have your own marketing campaign
It provides an additional sales channel
It provides opportunities for overseas sales
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Four things are critical
for success
▫ the idea
▫ the product
▫ the team
▫ the execution
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8. 3. The Team
1. The Idea
2. The Product
4. The
Execution
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9. Business
Model
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you need to find a marketplace
business model that will finance its
operations
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10. Choose the right
marketplace business model
1. Commission
The most popular business model for
modern marketplaces is to charge a
commission from each transaction
2. Membership/subscription fee
A membership fee is a model where either
some or all of a marketplace’s users are
charged a recurring fee to access the
marketplace.
3. Listing fee
A marketplaces charge a fee from
providers when they post new listings. This
model is quite common with classified ads.
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4. Lead fee
Lead fees are somewhere between the
listing fee and the commission models
& it gives a better value proposition
5. Freemium
The basic experience is free for all the
users of the platform. You can
monetize by offering premium services.
6. Featured listings and ads
A way for providers to buy more visibility for
their offerings. Listing is free, but providers
can pay to have their listing be featured
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VALUE IN
TRASACTION
If you want to own the purchase process,
you need to provide enough value in the
transaction both for the customer and the
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12. own the purschase
proccess
Security
The value for individuals
offering products
Tools
The value for professional
service providers
Reduce Friction
The value for customers
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13. set pricing in
your marketplace
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Factors that affect marketplace pricing
seven factors affect the final pricing decision
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14. 1. Marginal costs
the most important thing
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2. Competition
distribution channels
3. Network effect
having more providers
4. Provider differentiation
various types of providers
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15. 5. Transaction size & volume
amount of each transaction
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6. Quality vs quantity
provide as much value as possible
7. Who pays the bill?
how do you communicate this
17. how to validate
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• What problem(s) are you trying to solve?
• Who has the problem?
• How is this person dealing with the problem now?
• How are you planning to solve the problem?
• Why is your solution better?
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18. build a Minimum Viable Platform
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• outsourcing
• programming a simple marketplace platform
• find a technical co-founder
• Use a specialized marketplace software.
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19. Mobile
Friendly
Thanks to a responsive
theme, Google will mark
your marketplace as
mobile-friendly. It will rank
it highly for customers
browsing from
smartphones and tablets.
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Cross-
selling tools
Draw your customers
attention to Bestsellers,
Newest products, Most
popular, Recently viewed,
On-sale, Similar,
Featured, and
Recommended products
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Multiple
languages,
currencies,
taxes
attract vendors and clients
from different countries
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Vendor
Payout
System
Payments management is
the most significant part of
every online marketplace.
You will have to deal with
commissions and
distribution of payments
between vendors every day.
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Product
Approval
System
simple and efficient
product management
inorder to let your vendors
showcase products without
moderation
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Detailed
Statistics &
Reports
You need detailed
statistics on the sales in
your marketplace.
Statistics may be
represented in a form of
graphical or tabular charts.
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Separate
Mini Store for
Every Vendor
Vendors can share it to
attract customers to your
marketplace. It can be
promoted as a separate
store
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More Key Features
and the list is getting bigger as expirience shows that the basics are not
enough
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