|Dave Schneider is the founder of LessChurn, churn reduction app. In 2012 he quit his job to travel the world, and has visited over 65 countries. In his spare time, he writes about SaaS and business at DaveSchneider.me|
A few decades ago, no one could have imagined the scale at which online marketplaces would potentially change the way we avail products and services. Today, however, online marketplaces and e-commerce have become a staple part of most people’s lives.
When you think of online marketplaces, what comes to your mind? Perhaps your first answer would be Amazon, where countless sellers can facilitate buyers on one platform. While the e-commerce sector was traditionally dominated by giants, such as Best Buy, Walmart, Amazon, eBay, the rapid growth of new online marketplaces have given us a preview into what the future holds.
This rapid expansion has given rise to new business models that were once not even thought of. For instance, freelance platforms, such as Upwork and Fiverr, while the platform for services, work under the same concept of buyers and sellers, which in this case are people who need something done and people who would be willing to complete those jobs. With jobs ranging from logo designing to data analysis, the possibilities in such online marketplaces are endless.
Solving a Universal Problem
So, what’s the secret to their success? Well, contrary to what you may think, it isn’t the technology. While you can use software for custom development and design to create an efficient platform, it’s specialization and focusing your resources towards one goal that can make or break you. By stretching themselves too thin and trying to solve every problem possible, businesses risk providing common services, proving themselves unsustainable in the long-run.
This begs the question: what can such online marketplaces do to succeed? It’s quite simple, actually; provide a solution to a universal problem. Online marketplaces, in particular, overcome to hassle that come with browsing and shopping in brick-and-mortar stores. When time, effort, and money are invested in solving that one universal problem and apply the secret formula the worked so hard to develop, the potential for growth is unlimited.
Upwork, for example, adds value by offering solutions to problems all across the world. Geographic boundaries are no longer an issue such as this and clients can take advantage of the various wage rates accepted in different areas of the world. Similarly, Etsy provides a one-stop solution to everything unique under a wide range of categories, most prominently handmade and vintage items.
While traditionally, it may have taken browsing dozens of stores to find what you want, online marketplaces allow you access to as infinitely more products and services from your laptop or smartphone.
Retaining Customers’ Interest
For an online marketplace to attract endless customers and have positive recommendations, the universal problem we just discussed needs to be solved consistently and efficiently. The entire experience, from making a profile to making the transaction must be seamless.
Provide an overall brand experience by having a top-notch website, rating systems, pricing systems, and, customer service that helps customers resolve any issues they encounter. Additionally, if you’re operating on Amazon, you can use Amazon brand protection to help counter issues of infringers and unauthorized sellers.
Lastly, for an online marketplace, there needs to be a selection of high-quality service providers who can deliver consistently. E-commerce software, such as CS-Cart Multi-Vendor, can manage multiple vendors and provide you the ability to keep track of orders, payments, shipping, and overall analytics.
Having Room for Growth
Once upon a time, to avail different services, you had to open the Yellow Pages and call up every service provider. Today, you have different platforms available, allowing you to book the same services in a matter of seconds. Each of these platforms solves a universal problem and deliver their promised solution effectively.
Online marketplaces can gradually add related services to expand its platform and increase its potential for long-term customers. For instance, freelance platforms often start with basic categories, such as writing, and grow to more complex ones such as voiceovers and game designing.
By continuously evolving and providing solutions to different versions of your universal problem, you keep your customers interested and reduce the risk of boring your customers.
While there’s no doubt that online platforms have escalated to a whole new level, there is still massive room for improvement. Most transactions are even being conducted offline and, thus, the opportunity to create a groundbreaking online marketplace still exists. Entrepreneurs who can provide innovative solutions will find themselves creating online marketplaces that make history.