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4 points for building successful two sided online marketplace

4 points for building successful two sided online marketplace

We cannot deny the fact that building a multivendor marketplace from the scratch is difficult, actually difficult. You can make a list of successful models such as eBay, Airbnb, and Uber. However, getting to scale is a long story. It is the long-term strategy on how to balance the number of sellers to satisfied the demands of buyers. It might take you even years to get traction and build out your supplier and consumer communities in this tough time. But only when you have a proper plan and consider some important points below:

  1. Avoid too quick to pivot

If after six or nine months running your Saas marketplace, you had better reassess your market or model. Considering you need to establish both buyer and seller communities, you will need more time to prove your business when building a two-sided marketplace. It might take you time to make the marketplace run smoothly. Therefore, as a marketplace owner, you should stay patient, check and draw the plan carefully for every step. Network effects really start kicking in when there are enough products on the site to encourage buyers to return to look for products in other categories, when products from other sellers are listed more, and finally the growth of sellers and buyers is quickly accelerating.

  1. Tightening your focus

Building a marketplace, it is quite hard to say how many employees and effort are enough for the whole project. So, you should spend time to arrange everything. Let’s build traction in smaller verticals before expanding their reach into bigger markets. We can make a list of typical examples for this point. Ebay, before being one of the world largest marketplaces, they started with Pez dispensers or Esty, before achieving such success as today, began listing craft supplies and tools.

  1. Focusing on your most passionate users

Great marketplaces are built from the niche to the masses. Before approaching a broader audience, let’s start with early adopters/niche users. Why? Because when you begin going with your passionate users, they might tell you about their experience, they might give you suggestions to improve your multi store, they might introduce you to their friends. After a time working with them, you might accumulate enough experience to satisfy the rest of the customer segmentation. Let’s see the case study of Esty, you can see how they have done a fantastic job of involving their buyers in the marketplace by creating a true social commerce platform. It can be said that Esty has built one of the strongest communities among their competitor and this model helps them attract a lot of passionate users every day.

  1. Believing in your vision

When you decide to start your own business, even when others are not confident, you should still believe in yourself. However, I want to emphasize that having faith does not mean you ignore the reactions from the market because those reactions are the evidence to prove whether your faith is true or false. Even the smallest signal can also give the right tracks. A brief suggestion for you: increased three things word of mouth from your early adopters, repeat usage from buyers and listings from sellers, and positive user feedback.


If we make a comparison, the two-sided marketplace seems exponentially harder than a one-sided transactional model. But when you reach the scale, everything will become much easier.

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