Build a successful marketplace: Know the strategies for offering the best products

By moving entire industries online, such as transportation, travel, logistics, and groceries, digital transformation now connects sellers and buyers in one click. With consumer behaviour changing, prioritising fast, simple, and efficient digital experiences should compel marketplaces to adopt best practices in product development, UX/UI, partner relationships, and client support. This is easier said than done, yet many marketplaces struggle to maintain their growth.

Throughout my 12 years in building and leading marketplaces, from a cinema tickets Kinoticket marketplace to an intercity bus tickets marketplace, Unitiki, I’ve learned that there are several important business processes and product features that make every marketplace stand out by creating value for both the customers and third-party suppliers.

Revenue model

Revenue models may differ from one marketplace to another, depending on several factors, such as competitors, the level of development of marketplaces within an industry and region, etc. It could be commissions per transaction, service fees for buyers and/or sellers, mark-ups, or a mix of them. For example, Amazon takes fees from third-party sellers, whereas Airbnb tops up service fees for both hosts and guests.

To evaluate the most suitable pricing strategy – keeping sellers and buyers happy and generating revenue for the marketplace – market research, surveying both suppliers and customers, and relying on a gut feeling are not enough. Price A/B testing will shed light on your users’ fee tolerance. One method is to test different price points for a category or product/service. Another is to pilot a pricing model for a certain region. For example, at Unitiki, an intercity bus tickets marketplace, we use dynamic listings and price optimisation based on conversion and user-origin. We created in-built A/B testing on the website and introduced a fully automated listing optimisation system.

Quality

The listings on your marketplace are your products. Pay attention to the user experience and keep the info updated. At the very beginning, create the product (= listings) quality requirements, make it a part of the KPIs for your team, and include it in supplier compliance for the partners. The requirements must be specific and include all possible scenarios. For example, basic information that should be considered the most important include price, data of service/product delivery, supplier, product/service description, etc. Don’t get a listing published until it meets the requirements.

Automate processes whenever possible to save resources and improve communication with suppliers and buyers. For instance, it will help to avoid client support team overstaffing – it’s especially valuable as the number of complaints at marketplaces might be enormous. For instance, robotic process automation will handle repetitive tasks, such as order processing, and customer service tasks. Natural language processing will automate customer service, chatbots, and text analysis tasks, while machine learning will help with fraud detection and product recommendations. At Unitiki, we created a semi-automated helpdesk system handling 80% of requests through automated scripts, with complete control over support staff actions and integration of several business logic and scenarios. Communications with sellers and buyers, return processes, compensations, and much more can be automated.

You can build everything in-house; however, at the beginning of your business journey, this might be overwhelming. First thing you want to do is to build strong engineering and product teams. The marketplace industry has specifics that the product development teams should be aware of, including liquidity, network effects, and disintermediation. Keeping demand and supply in sync, supporting a word-of-mouth marketing strategy, and providing the best options so that the users won’t leave the marketplace to transact outside of it – are all also part of the product and tech team’s responsibilities. Invest in onboarding and education and be an inspiring leader for them.

Partnership model

Sellers or suppliers for a marketplace are strategic partners and clients simultaneously. At the very beginning, building strong relationships with partners is essential. A clear pricing strategy, onboarding, internal platform and tools, co-marketing campaigns, managing leads, and centralising data will give your partners the impression of an easy-to-use platform and keep them working with you, not your competitors. At Unitiki, we decided to go the extra mile and offered free B2B products. One is a SaaS route management system that helps carriers automate their route processes. It keeps the transport companies loyal to us and automates our listing processes by keeping the bus schedules current.

At the beginning of your marketplace journey, your suppliers’ strong brands will benefit you. So don’t hesitate to include them on the listings, separate web pages, or in the media while working independently. However, as soon as you’ve established your marketplace’s brand, avoid showing their brands on the listings – from now on, your customers should only see your brand. As mentioned before, one of your jobs is to keep the users engaged and not give them any reason to abandon your marketplace to complete their transaction.

Customer support

Dealing with a marketplace, customers usually know that they buy a product or use a service from different types of sellers and service providers. However, your marketplace is their primary touch point, so the best practice is to be responsible for the whole client lifecycle. Do not abandon your clients after a purchase: any issues, complaints, or questions shouldn’t be left unresolved. Handle it quickly and in your client’s favour – strive to provide better results than them going directly to the supplier. Collecting feedback proactively will prevent you from harming your brand; always remember that even though you don’t produce the products and provide the services, it is your brand that clients will associate with the experience.

Go beyond expectations and consider cross-selling. Related products and services can add extra perks to users and diversify your supplier’s portfolio. In our marketplace, we offered luggage as an additional option: many carriers didn’t sell this option prior to going online, yet clients were prepared to pay a bit more to ensure a secure space on a bus for their luggage.

The bottom line is that marketplaces connect supply and demand. Make sure you keep both satisfied with the product by working on a strong partner relationship, investing in product development, and always being ready to resolve any client issues right away.