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MenuHow do I make a two sided marketplace work in the children's fashion and accessories niche?
As a startup how I drive customers to the site and engage with suppliers to join the site, and convince angels/Seed funders it's an idea worth investing.
Answers
This is always a chicken and egg problem. You wont attract customers if you don't have sellers on your market place and sellers won't join unless they see numbers.
This is how I would approach(I won't call it optimal as there is nothing like optimal here as strategies will change based on time, place and demand dimensions)
1. Start from a locality or a city with sellers who are known to be providing good service to their existing customers. Go and pitch to those customers on how they will benefit on their supply chain if they choose your market place. Now once they are on-board to your platform, go talk to their customers on how you are making their life simple by coming to their platform.
2. Slowly expand to other localities and make sure that you add varieties to your platform in the process. Choose the sellers who will provide a wide range of goods in the process.
3. Expand this at a city and then go for state, country and cross-country level.
As you build up the model, make sure you respect the credit cycle of buyers and delivery cycle for customers.e are nuances you want to take care at each level.Setup a call and we will go over this in detail.
Having operated an online marketplace for 3.5 years, it's no easy feat. If you would like to setup a call, I can tr to give you as many of these learnings as possible, before you get started.
I ran one of the top accelerators in the US for several years and I'd say 50% or more of the businesses that come through face this problem. I've seen a lot of patterns in this space and I could advise you if you are interested on what has worked for some of the businesses I have seen. The chicken and egg problem can be overcome with the right planning. I'd be happy to schedule a call with you.
Related Questions
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What support software do most marketplace startups use? Is it custom, or a SaaS product like Zendesk, Desk.com or Uservoice
Your support software should cater to your needs, depending on how your business operates. Fiver uses Vanilla forum and Zendesk. Thumbtack uses Zendesk. Not sure about AirBNB, their help center seems to be custom. Depending on how well funded your are, I would recommend starting with a free plan with one of the help desk SaaS products, or even using open source ticketing platform. Then, as your needs grow and you need integration with your marketplace, there's no reason you can't scale and migrate.VN
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What is the pros and cons of a marketplace website like houzz.com, zillow.com and trulia.com where users send mail to professional without logging in?
It really depends on your mission and from where you intend to drive revenues. Asking a guest to create an account and log in in order to send an email to your customers could be seen as a stumbling block. The more you can encourage visitors to reach out to your customers, the more your customers will have a great experience, On the other hand, you have to make sure you all the security measures in place so your customers do not get spammed through your site. Give me a call to discuss further. I offer a free initial call to first time clients. Use this link: https://clarity.fm/kevinmccarthy/FreeConsultKM
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Holding funds in a 2-sided marketplace?
Check out https://www.balancedpayments.com/ They are made for marketplaces. Airbnb CEO among others invested in them and they have some of the best pricing/payout fees. Also some good info on http://www.collaborativeconsumption.com/2013/10/08/online-marketplaces-are-hard/ One of Balanced Payments co-founders is writing this blog series on marketplaces.MA
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When creating a marketplace, does it make more sense to focus on stimulating demand first or supply?
Focus on the more difficult side of the marketplace. For instance, if you think it'll be easier to get suppliers, then focus first on getting buyers - always be working on your toughest problem (aka your biggest risk). You'll find some great blogging on Marketplace and Platform topics here http://platformed.info (read the ebook too!)CM
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How important is it for a marketplace startup to drive enough demand (customers) for your supply (sellers) to make a full time living off of it?
It's very important. (first, read this article by Josh Breinlinger - http://acrowdedspace.com/post/47647912203/a-critical-but-ignored-metric-for-marketplaces) The way you achieve success in a marketplace is by driving liquidity for both your supply & demand. Demand-side Liquidity = When users come to your marketplace, they can achieve their goals. Supply-side Liquidity = When supply comes to your marketplace they can achieve their goals... which are almost always to make money. If you're making a large amount of your supply-side users a full-time income, then you're helping them achieve liquidity. Now it's not so black and white and it doesn't always have to be a "full-time income." It depends what their goals are. E.g., 1) At Airbnb, renters aren't looking to quit their day jobs and become landlords full-time... they're just look to earn a substantial amount of income to offset their rent, mortgage, etc. So in this case, I would probably goal on # of renters that earn >$500 / month... and (in the first 1-5 years) try to grow this number by 10-20% MoM... and maybe by just 5% once you're in the mid-high tens of millions in yearly revenue. 2) At Kickstarter, the goal of the supply-side is to get their project successfully funded. They don't care if the project creator is "full-time"... they just want to make sure they meet their funding goal. This is why they talk about their 44% project success rate all the time - http://www.kickstarter.com/help/stats 3) At Udemy, our instructors want a substantial amount of their income to be driven from their Udemy course earnings... so we look at how many instructors are earning >$2k / month.DT
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