6 Strategies for Building a Local Online Marketplace
Local online marketplaces are notoriously difficult to build, and yet the rewards are significant for publishers who are successful. When done right, locally focused ecommerce platforms can create additional streams of revenue to help fund news operations, and they can serve as page-view generators for the hyperlocal news sites they’re associated with. Marketplaces can also help publishers establish credibility in their communities, transforming their sites from news-destinations into true community hubs.
To help publishers overcome the obstacles associated with building a local marketplace, we consulted with a few experts. Here are their tips.
1. Remember the buyers. Building a marketplace is a challenging task, since there are two sides of the equation: buyers and sellers. In order to be successful, publishers need to think about how to bring both sides up at the same time. It’s possible to end up with great demand in a geographical area, with no supply (listings to showcase). It’s also possible to have the opposite problem, where there is a significant inventory, but no critical mass to see it. Publishers should keep both supply and demand in mind when developing their marketplaces. (Horatiu Boeriu, Grabio)
2. Rely on transparency to facilitate trust. There can be huge trust issues in the local marketplace, since individual service providers aren’t generally as well known as brands like Apple or Toyota. To remedy this, a marketplace developer needs to create transparency and facilitate trust. This can be done by posting background checks, ratings, reviews, testimonials, leaderboards, and even offering blanket quality guarantees to buyers. It’s also helpful to add mechanisms to put buyers in touch with sellers, in case there are concerns. To prevent users from leaving your system to complete their transactions, it’s important to make these connections in a smart way, by masking the identities of buyers or making it so convenient that the buyer doesn’t want to leave the marketplace. (Ethan Anderson, MyTime)
3. Do your part to help sellers succeed. Don’t drop sellers into your marketplace with the expectation that they’ll sink or swim. Onboard them, stay in constant contact, and solve their problems directly. Your role as the marketplace developer is to help them succeed. In the early days, think of your sellers as the workforce. Train them, promote them, follow up on them, and help them find success. Act as their agent, business manager, and salesperson. No amount of social buzz compares to actually making your marketplace work for someone. (George Eid, Krrb)
4. Don’t build a Rolls when a VW will do. What local businesses urgently need is discovery (the VW) first, and ecommerce capabilities (the Rolls) second. As it is, many lack the resources to maintain current photos of what they sell online, not to mention optimizing those SKUs for search. Local marketplaces should be designed to help — in as frictionless a way as possible — make inventory discoverable, so the mom who is looking for a dress for a party right now can find a local source for that item before defaulting to Amazon, Target, or Walmart. (James Akers, Main and Me)
5. Solve supply issues by integrating with existing inventory. It’s not uncommon for a marketplace to run low on inventory at the beginning. Issues on the supply side can sometimes be resolved by integrating the marketplace with existing inventory, provided by businesses themselves or other marketplaces. For example, someone building a niche marketplace for electronics may be able to find existing APIs to provide the necessary inventory. With the supply side problem solved, there’s more time to focus on bringing eyeballs to the marketplace and building an audience. (Horatiu Boeriu, Grabio)
6. Consider launching with a free model. Local business owners often begrudge organizations they feel compelled to join. Downtown directors feel pressure to get their merchant members to act as a group, knowing it’s the only way they’ll generate enough critical mass to win eyeballs back from Amazon. It’s difficult to get SMBs to agree on the right platform when there is money involved. At Main and Me, we’ve designed a marketplace that allows anyone to use us for free for discoverability, uploading as many items as they wish. Once we scale, then we will charge for features that add demonstrable value on top of the free model. (James Akers, Main and Me)
Stephanie Miles is an associate editor at Street Fight.