How to Quickly Create a Marketplace
The retail market is constantly undergoing major transformations. In 2004, almost half of Poland’s etail sales were conducted as traditional commercial transactions. Consumers were increasingly keen on shopping in malls and hypermarkets, which allowed them to have all their buying needs met in one location – and, more importantly, to save precious time.
The pandemic has brought about huge changes to the retail market. When shops and malls locked down and social distancing restrictions were imposed, the scale of online purchases rocketed. According to Poland’s Central Statistical Office, between October and November 2021 alone, the share of online sales grew from 8.4% to 11.4 percent. Most consumers quit shopping malls for the screens of their laptops, tablets, and mobile phones. Consumers who used to do their shopping in one place started to seek a similar experience on the Internet.
This gave rise to the increased popularity of the solution known as a marketplace.
What is a marketplace?
A marketplace is simply a platform that offers the products and services of various producers in one place. The most popular online marketplaces are Amazon ($339 bn in 2019), eBay ($90 bn in 2019), AliExpress, Taobao ($538 bn in 2019), Allegro, Empik, and (our client) morele.net. Half of all global e-commerce is conducted on platforms where consumers seek specific solutions, not brands.
It is estimated that almost 2 billion dollars are spent annually on the 100 biggest marketplaces. This upward trend is forecasted to continue. The popularity of platforms on the e-commerce market has been confirmed by Accenture’s study on the Interactive Digital Marketplace 2019. According to that study, as many as 81% of consumers who bought a product on Amazon remembered the details of that product site three months after their purchase (PDP). Compare this to the fact that only 28% of consumers were able to recall a TV commercial.
Why do companies decide to use a marketplace?
In the last two years, many companies have needed to respond to changing market circumstances; thus, they switched to online sales practically overnight. Building an online store and a brand as well as promoting products in the face of cutthroat competition was a severe logistics challenge. To meet it, companies chose to use an online marketplace. Why? Because online marketplaces offer the following benefits:
- Immediate support for online business, making an online store unnecessary.
- Easy worldwide scalability.
- Acquisition of other sales channels, as part of a multichannel strategy.
- Ability to leverage the marketplace's brand power and community.
- Better online search visibility.
- Building trust and brand awareness towards new retailers.
- Efficient order execution (with customer service and payment going through the marketplace).
Why do customers turn to online marketplaces?
From a customer perspective, the purchasing process in a marketplace is no different than an online store. The market appeal of platforms lies chiefly in presenting customers with the offerings of numerous suppliers in one place and allowing them to shop around while only using a single account. Another benefit of the marketplace is its convenient category structure and intuitive filters; these facilitate effective product searches and allow customers to compare product features and prices against competing brands. Platforms offer also significant payment and delivery security.
Does it pay to invest in your own marketplace?
The fact that there are many popular marketplaces with a global reach may raise some doubt about whether more of them are needed. A current trend analysis proves that consumers increasingly often seek to buy in one location. Plus, there is a growing demand for marketplaces devoted to particular industries, ideas, or tastes, e.g. products for children or vegan, natural, or organic products. According to data obtained by Finbold, about 3,734 new external stores start selling daily on Amazon.
How is a marketplace built?
A marketplace – a comprehensive solution offering numerous business benefits – at first glance may seem a time-consuming and expensive implementation. This is particularly true if it must be created for a non-standard business.
Yet such a platform, even for custom options, does not require more investment than setting up an online store. Many of the non-standard solutions can be implemented using plugins. Functionalities offered by e-commerce platforms like Magento and PrestaShop allow companies to launch their own marketplaces quickly and easily. Their plugins need installation, accurate configuration, and adjusting screen views to a given store. Many of them can be bought with source codes, which means they can be tailored to individual needs.
How e-point implements online marketplaces
Drawing on the knowledge and experience of our experts, we identify our clients' needs and design e-stores together with them, developing solutions that match even the most non-standard of requirements. We identify which among the many available marketplace extensions best fit our customers' goals. The choice is very wide, and the available plugins differ largely on price, functionality, and customization possibilities. A plugin to transform a Magento store into an extended marketplace serving multiple retailers costs slightly less than 170 USD.
Apart from the marketplace functionality, plugins support fast and effective delivery management (calculating delivery costs based on distance or package weight) and other features. They also offer a mobile application for suppliers. This helps us launch a highly complex marketplace in a matter of weeks. The implementation time will naturally depend on the particular project, customer needs, and business vision. However, if it does not require a significant modification of the Magento software, a new marketplace may be operational within 3 months. Thanks to using plugins and the Scrum approach, we ensure fast start-up times, followed by unlimited extension options to tailor the store to changing market requirements.
Within 12 weeks, our team can implement:
- A coherent UX and graphic design conception for your stores.
- A Progressive Web App (PWA) frontend to replace native mobile applications.
- An easy and intuitive way of combining products from multiple stores in one order.
- A non-standard set of product attributes.
- Complex algorithms to calculate delivery costs, accounting for distance, order weight, fixed charges, etc.
- Online payments.
- Integration with the product base.
What did we learn by creating a marketplace in 3 months?
There are some important conclusions to be drawn from our experience of online marketplace development:
- A retail platform may be launched within a couple of months, allowing a quick start for online sales and profits.
- A fast and efficient implementation allows the development and customization of products based on day-to-day activity, collected data, and customer feedback.
- Customizing solutions does not require the development of a scratch-built platform; it should no longer be a tedious process. Thanks to ready-made solutions like plugins, we can easily implement particular functionalities and tailor them to our client’s needs.
- Plugins allow us to quickly implement a marketplace easily and also reduce the cost of the undertaking.