How to Buil an eCommerce Marketplace for future

How to Build an eCommerce Marketplace for Future

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by Alan Jackson — 3 weeks ago in Development 3 min. read
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Whether you are planning to invest in a new business venture or looking to augment an existing one, the success achieved by the eCommerce marketplaces world over is hard to ignore.

The paradigm shift towards eCommerce has been expected given the continued development and improvement of digital and logistics infrastructure.

Better devices, faster internet and technological advancements have further fuelled this growth. But despite that, the B2B multivendor market is yet to reach its full potential. The current scenario is just a taste of things to come.

The eCommerce Impact!

Consumers spent $861.12 billion online with US retailers alone in 2020, up 44% from $598.02 billion in 2019 (source Digital Commerce 360 analysis). Even though CoVid has hastened this growth. Still, it’s slated to grow even further in 2021 and beyond.

According to a forecast published on Statista, gross revenue in the eCommerce market is expected to show an annual growth rate (CAGR 2021-2025) of 6.3% resulting in a projected market volume of US$ 3,477,296m by 2025.

This elucidates an enormous potential in the market as exemplified by innovative startups like Taobao, Depop which are carving out their own niche in the eCommerce ecosystem and, whilst “old-timers” like Alibaba and Amazon continue to rule the roost.

Brands that still have just a conventional brick and mortar presence are starting to lose out on their brand value and consumer loyalty. The £1bn loss suffered by Primark being the latest case in point. 

Covid has confined everyone to their homes. A trend that is likely to continue in the immediate future as well. eCommerce marketplaces have been the savior during these testing times for businesses. They give a near-perfect shopping experience to the buyer. 

eCommerce is all about volumes, delivering unparalleled value to the buyer. With the world economy reeling under the covid impact, people have been becoming increasingly circumspect on their spending, making the value proposition offered by eCommerce (especially multivendor) marketplaces even more significant. This is another factor that is driving traffic to various eCommerce marketplaces.  

Advantages of eCommerce store

Higher Volume:

The sheer volume that a multi-vendor market can potentially create redefines the business strategy of the marketplace. More volumes would result in more revenue, but it also opens doors to innovative marketing strategies, further attracting more customers to the marketplace. 

More marketing Options:

Bigger revenue also makes it possible for the marketplace owner to offer significant discounts and employ other similar marketing strategies, both for vendors and buyers. 
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Easier to sell Niche Products

Reaching a larger audience is easier. multivendor marketplaces make it possible to reach out to an otherwise unfathomable number of buyers. This also makes it easier to sell niche products.

Generates higher revenue in the form of Advertisements:

A larger customer base will make it easier to attract advertisements in your marketplace, thereby further increasing the revenue. 

A better platform for the vendors

Different vendors feed off each others’ success and product range. A buyer, for instance, would consider shopping for product accessories along with the product being purchased.

A notable mention here is the marketplace solutions that have the smart recommendation feature, wherein related products are displayed enticing the customer to buy more. 

More ROI

The initial investment may be more in the case of a multivendor store as you go about setting up the infrastructure and the rest of the paraphernalia, but so is the ROI

Challenges

Getting off to a start:

Just like any other business venture, the biggest challenge for a multi-vendor eCommerce marketplace is the start. The initial stage is all about garnering attention and convincing potential vendors and establishing a loyal customer base. And this is where the dilemma lies. 

Just like the chicken or the egg paradox, this is a similar conundrum where it is difficult to identify a starting point. Both adding a vendor base or adding a customer base are interconnected and can’t happen without the other.

Issues with the software:

If you have customizations done on the software, you might face an issue initially getting used to it. 

After-sales support is a crucial factor when you choose a multivendor marketplace platform. In fact, the software company must keep you abreast of the customizations during the development stages as well. 
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Scalability:

After achieving significant growth, an eCommerce marketplace will need a scalable platform. It is imperative, then, to choose a platform in the first place that offers scalability. 

Speed Issues:

According to data published by searchenginejournal.com, nearly 70% of users say a website’s slow loading time affects their decision to buy.

What’s palpable but more concerning for an eCommerce website is that 14% of the users said that they will close the tab and visit a competitor’s website.

That loss of business impacts the future of your business venture as well. This makes the speed performance of your marketplace a crucial pain point that you have to address.  
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A check on the quality of products & services

The end-user will inevitably judge your business by the quality of products and services on offer. Thus the brand image of your marketplace hinges on this factor. 

You must opt for a multi-vendor marketplace software that gives you complete control over the vendors and products on offer by them.

Moreover, it should provide you with a complete statistical overview of your marketplace. Additionally, it should let the end-user review the products on offer.

Alan Jackson

Alan is content editor manager of The Next Tech. He loves to share his technology knowledge with write blog and article. Besides this, He is fond of reading books, writing short stories, EDM music and football lover.

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