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MenuHow do I start a liquidation marketplace business?
It's where retailers can list their surplus inventory and get biddings/offers from other businesses or individuals. How do I get started and is a shopify website good enough to build this?
Answers
Two sided marketplaces are a very common type of MVP to build. Using no code (shopify, wordpress, bubble) can get you some traction and gets you some amount of painted doors (someone knocks on the door, but it's not real, at least you know how many people knocked).
This can work for a month or two, but it is not technically defensible, and if your idea succeeds, most of this work will have to be discarded. You want to validate cheaply, but you can do this with a MVP that is hyper focused.
Check out some more of my thoughts on no code platforms:
https://mvpengineer.com/no-code-platforms-worth-it/
and minimizing your MVP:
https://mvpengineer.com/building-tech-demos-for-micro-components-not-a-full-user-experience/
1- Start with a small capital to understand the market
2- Find your customers' needs
3- Shopify is an excellent website for sale and it is very easy for you, but you must know how to work on it
4- Choose a main product and the rest of the products are additional and expand into the main product, for example (clothing).
5- Make a small profit margin and rely on expanding the customer base
Rather than shopify, you can use wordpress as you will have control over full source code:
- Go to http://wordpress.org/ and download the WordPress Marketplace plugin.
- Install the plugin and activate it.
- Click on "Add New" in the marketplace menu and input the following details:
- Name: Your marketplace name
- Category: Mobile apps
- Subcategory: Apps
- Upload a .zip file of your app.
- Click on "Create My Store Now!"
If you know shopify, then yes. Use whatever can get you there fastest to present something to your first users. Once you build the traction you're after, look towards setting up a better tech solution that serves user needs with a clean user experience.
B2B marketplaces are inherently different, but not more complex to market. To start, you might look into buying some of that inventory yourself or doing things manually for a bit to evaluate demand.
Related Questions
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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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What is the best pricing (business model) to apply to a marketplace?
I like to separate your question into 2 sub-questions: #1 How do we determine which side to charge? #2 How much is the right amount to charge? On #1, my answer is that you can charge the side(s) for whom you add the most value. In your examples, Uber really solves a big problem for drivers, it's that they sit idle for a good part of the day, so are willing to pay a lot for new leads. (their alternative is no work) Consumers are charged more for the convenience of a private car but they are probably not so much willing to pay more for a taxi, even if they can hail one from their phones. For AirBnB, it's a mix, it's a way for landlords to monetize idle capacity which they are willing to pay for, but it's also a way for a renter to pay less than they would normally pay for a hotel. On #2 (how much), I like to triangulate a number of factors: - What's the maximum amount I can charge one side, while still being a good deal for them. - How much do I need to charge so that I can become profitable? (the economics are quite different if you charge 3% vs. 12%) - What are comparable services charging for substitutes/competitive offerings? I will just add that there is no formulaic way to determine pricing strategies (curated vs. open), and it's a lot more about what's the comparable and what the value delivered is. That's how I approached the question while deciding the business model at ProBueno.com (my startup)MR
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Broad niche or Targeted niche which way to go?
I always suggest going "uncomfortably narrow" initially so that you can really dial in the user experience and build liquidity first. Going broad will be tougher as there's too much noise to signal. Also, it's best to fake the supply side initially of you can to improve the buyers side first, then figure out supply & quality afterwards if customers are buying and you've proven out a demand strategy that will work.DM
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What are the profit margins for high end home decor and furniture?
Hone decor / furniture industry is one of the highest profit promising industry today. The profit margins on home decor ranges from 20% - 45% depend on the price of the product. If you're looking to get quickly popular, I suggest you start with the online store and promote it on offline as well. Keep the margins low initially so that you can attract more buyers. As the business grows, reinvest the amount back on the business so that you can stock more varieties. All the very best.KK
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When working on a double-sided marketplace how do you work out cost of customer acquisition?
I'm the CTO of https://3dagogo.com a marketplace of proven to print 3D designs. We look at the two sides differently. There's not a single customer. In our case you have designers and purchasers ( sometimes the same person can be both ). Cost and methods for acquiring designers are very different than those to attract purchasers. I would clearly separate the sides and come up with separate cost structures. In my opinion when you're looking at the marketplace from the purchaser perspective, the other side's acquisition costs can be seen as fixed marketing costs.DA
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