Starting an online marketplace.

[parkerscott]

(prologue - you can skip this if you want)

I think im ready to get started again. Previously I created a product that I wanted that I thought other people might want, and quite frankly now that I look back on it, I don't even think I want it. I don't think other people wanted it either.I wasted resources, but I learned a whole lot. The barrier to entry was too high, there wasnt that big of a want or a need, it scaled, and I had control, and it divorced me of time, but I didn't have all of them. I learned from it though, and I moved on. I have gone through a few ideas since then recently, and each one is a learning experience. Now im in a position where im wiser, and I have a job that will support me, but also allow me to work on my next project 6 of the 8 hours while im at work.

(end of prologue)

I have already started working on my new project. It is going to be an online marketplace. It solves a need for the vendors, and it fulfills a want for the customers. The barrier to entry is the work it will take to get everything set up as far as development, marketing, etc. The control can be good, and bad. I cant keep a vendor from leaving if he wants to, but I will still hopefully have a marketplace full of other vendors. I can scale it up by encouraging more vendors to join, and add more products. I can add my own products etc. Time shouldnt be an issue considering products are being sold. Everything seems to be met.

The marketplace is sort of like etsy but instead of it being for primarily women its more for men/young adults. I found out that lots of people are making products, but the products usually dont make it to store shelves, and people dont really have a good way of finding them.

Some of the products are awesome, but the people selling them have to set up a website, drive traffic to it, and do a whole bunch of work, and they usually don't make a lot of money off of it so they quit. Or they have an idea, but the thought of setting up a website, and learning everything may deter them from ever starting. They usually have no idea how to get the products into stores either.

The solution?

They make the products, and they ship the orders. I take care of the website, and the costs associated with it. I focus on the traffic, and the costs associated. If im more knowledgeable than them at something, and they need consulting then I handle that.

I want to be able to offer a marketplace for people to sell their product, and be found rather than being tucked away on the internet somewhere on a bigcartel page nobody knows about.

I will collect a commission off each item sold, and the goal is to eventually move over into offering fulfillment, and possibly some manufacturing solutions.

Now the problem moving forward is going to be getting the vendors to list their products to a brand new site thats empty. How would you do this?

Any criticism or answers?

 

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[Andy Black]

Market places are tricky as there's the buyers and sellers to acquire, and satisfy.

Start with their wants and see if you can fulfil them, before you "build" too much.

If it was services rather than products, I'd start by generating the leads and using them to acquire the service providers.

Can you do similar? Can you capture interest in a product first and then go to vendors with all these pre-orders? That's what the vendors want after all, - people expressing an interest in their product with the intention of buying.



Some worries and random thoughts:

If the vendors are poor at marketing, maybe they have built a cool product that nobody wants?

Maybe you can't get anyone interested in buying it no matter how much work you do.

There's a risk you do a lot of
marketing work for nothing.

Would being a straight affiliate for products be simpler to start with?

It's easiest to sell to people already looking to buy.

You've picked a target *demographic* of buyers (young men). That's very broad. Can you narrow it down to "people who spend money on XYZ" instead of a demographic?

And then attach yourself to that "demonstrated cash flow"?

Start very niche and focus. Drilling deeper is how you're going to get traction, not being everything to everyone.

Check out how other market places got started. You mention etsy. Check the founding stories for the usual suspects (Amazon, Craigslist, Groupon, etc). Niche ones will be interesting too.

Don't call them buyers and sellers/vendors. Give them better names to describe them. Calling them cyclists and cycle manufacturers would help you.

This isn't a technical "build" challenge, it's a big marketing challenge, made harder because you're trying to serve two sides of a market.

It's essential you focus and simplify as much as you can. There's a real danger you get lost building stuff.

Keep asking yourself "Do I *really* need XYZ? Can I achieve the end-result without XYZ?"

My worry is that this is a potentially big project with a lot of moving parts.

What's the LEAST you can do to get started, and to get profitable?

Podcasts that might help are
• www.tropicalmba.com/consulting
• www.tropicalmba.com/services

I don't know your background, skills and experience. Just be aware of "product - founder" fit too, as Dan Norris mentions in his short and easy to read book "The 7 Day Startup".

Hope that helps.

 

[Bellini]

I want to be able to offer a marketplace for people to sell their product....
Any criticism or answers?

Not to be a killjoy, but how is this any different than Ebay?

 

[AllenCrawley]

@Andy Black brings up some great points.

It boils down to what is it that will make people use your marketplace in addition to the others out there.

New marketplaces pop up all the time. A few gain traction and most fail.

I don't get from your post that you've really researched this fully.

Take a look at alibaba's 11main, opensky, grommet, wanelo, fitmoo, fancy, maker's row, storenvy, wish.com and the other dozen or so that are making noise.

 

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[parkerscott]

Market places are tricky as there's the buyers and sellers to acquire, and satisfy.

Start with their wants and see if you can fulfil them, before you "build" too much.

If it was services rather than products, I'd start by generating the leads and using them to acquire the service providers.

Can you do similar? Can you capture interest in a product first and then go to vendors with all these pre-orders? That's what the vendors want after all, - people expressing an interest in their product with the intention of buying.



Some worries and random thoughts:

If the vendors are poor at marketing, maybe they have built a cool product that nobody wants?

Maybe you can't get anyone interested in buying it no matter how much work you do.

There's a risk you do a lot of
marketing work for nothing.

Would being a straight affiliate for products be simpler to start with?

It's easiest to sell to people already looking to buy.

You've picked a target *demographic* of buyers (young men). That's very broad. Can you narrow it down to "people who spend money on XYZ" instead of a demographic?

And then attach yourself to that "demonstrated cash flow"?

Start very niche and focus. Drilling deeper is how you're going to get traction, not being everything to everyone.

Check out how other market places got started. You mention etsy. Check the founding stories for the usual suspects (Amazon, Craigslist, Groupon, etc). Niche ones will be interesting too.

Don't call them buyers and sellers/vendors. Give them better names to describe them. Calling them cyclists and cycle manufacturers would help you.

This isn't a technical "build" challenge, it's a big marketing challenge, made harder because you're trying to serve two sides of a market.

It's essential you focus and simplify as much as you can. There's a real danger you get lost building stuff.

Keep asking yourself "Do I *really* need XYZ? Can I achieve the end-result without XYZ?"

My worry is that this is a potentially big project with a lot of moving parts.

What's the LEAST you can do to get started, and to get profitable?

Podcasts that might help are
• www.tropicalmba.com/consulting
• www.tropicalmba.com/services

I don't know your background, skills and experience. Just be aware of "product - founder" fit too, as Dan Norris mentions in his short and easy to read book "The 7 Day Startup".

Hope that helps.

Thanks for your input Andy, you have always been one of my favorite posters.

Just to clear things up a little bit the marketplace has its own industry, with its own subcategories. Its a niche marketplace similar to etsy but instead of crafts its xyz. I know the demographic, and where they hang out, and I may have some industry connections as well. The industry makes billions annually, so its not so niche it will be hard to find customers. Sorry for being so vague, but ive been around to see biophase's soap business cloned, and competition that popped up from members getting into the same business as other people.

I love that bit about giving the buyers and sellers better names as well.

Im really trying to make it as simple as possible. In the industry people already buy the products. The problem is that some of the people making the products dont know how to properly market them. Its the equivalent of someone selling lemonade to thirsty people, but the lemonade stand is in the backyard where nobody can see it.

Not to be a killjoy, but how is this any different than Ebay?

ebay is very broad. It focuses on tons of different products from automobiles to xylophones. It was originally an auction house.

@Andy Black brings up some great points.

It boils down to what is it that will make people use your marketplace in addition to the others out there.

New marketplaces pop up all the time. A few gain traction and most fail.

I don't get from your post that you've really researched this fully.

Take a look at alibaba's 11main, opensky, grommet, wanelo, fitmoo, fancy, maker's row, storenvy, wish.com and the other dozen or so that are making noise.

There is not currently a marketplace that I know of that offers anything like this. Its not a marketplace like wanelo where people come to look for cool products that fit into any category under the sun. It has its own niche. Etsy is a good comparison.

Thanks for the other responses as well

 

[Gymjunkie]

Any updates on this project?

 

[parkerscott]

Any updates on this project?

Took a small break from this project once my job situation changed, but now im slowly getting back on track. The website is functioning for the most part, but its blocked from the public currently. The website could use some design, and copy tweaks, but for the most part everything seems to be functioning properly. I also had a custom plugin made dirt cheap that will hopefully come in handy. While searching for vendors I noticed a lot of the businesses were located in places like the uk, australlia etc, so the plugin will allow me to block customers from certain regions from seeing certain products. So if someone from the uk is selling something, but doesn't do international shipping, they will only be seen by people from the uk. This makes it a little easier on the customer while allowing me to add more vendors without having to tackle some bigger logistical challenges.

So now my next task is to get the vendors onto my site, and then the customers. I have a list of about 150 vendors, and im still looking for more, and i plan on sending some email/calls etc soon.

Ive only spoke to one vendor when i was doing some market research, and he said its a great idea, and he would love to get on board (he quit his business unfortunately) but he did ask a few questions, and one that really stuck with me was "what experience do you have" and I didn't really have anything similar to my objective. That led me to my next little side project. If im going to make this marketplace, it will make more sense if i have some skin in the game by also being a vendor. I will be able to relate to the vendors, and also make some extra money, and get some more experience. So I should hopefully have a few working products that im manufacturing on a 3d printer hopefully in the next few weeks.

So basically my next steps are:

Launch my products
Bring in vendors
Drive customers to site
Tweak the design and copy
Keep tweaking, and testing to bring in more customers, and also try and bring in more vendors.

Im hoping to have it launch soon. Hopefully I don't run into any problems.

 

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[Gymjunkie]

So basically my next steps are:

Launch my products
Bring in vendors
Drive customers to site
Tweak the design and copy
Keep tweaking, and testing to bring in more customers, and also try and bring in more vendors.

Im hoping to have it launch soon. Hopefully I don't run into any problems.

That seems like conflict of interest and not something that builds up trust with vendors... more seems like a shiny-object for you..

And from what I've read on marketplaces, bringing in vendors is usually good place to start and is first thing to do.

 

[parkerscott]

That seems like conflict of interest and not something that builds up trust with vendors... more seems like a shiny-object for you..

And from what I've read on marketplaces, bringing in vendors is usually good place to start and is first thing to do.

Didn't really think of it that way. I still want to launch the product, but I will do so without tying the two together.

 

[Gymjunkie]

Didn't really think of it that way. I still want to launch the product, but I will do so without tying the two together.

Not everyone might see it that way.. who knows.. but it does raise a question, if owner is here, is he artificially pumping up his sales etc..

 

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[parkerscott]

Not everyone might see it that way.. who knows.. but it does raise a question, if owner is here, is he artificially pumping up his sales etc..

Yeah I can see that. I won't really be competing with some of the vendors, but there are a few that could consider me competition, and that wouldn't be a good look if they think im promoting my own products over theirs.

 

[Leo Hendrix]

@parkerscott Any progress or update?

I'm at build stage for my marketplace and trying to figure out if I should build a marketplace vs leadgen, but my Niche has a very long sales cycle usually and from my experience I have not been able to determine or find sellers that pay for leads only, as sales are usually complex sales of large product quantity and monetary figures. I have my competitive advantage built-in to the website which improves the lead process for both parties (buyers & sellers)

Now I am at the stage of listing vendors so as @Andy Black suggested I might have to manually generate leads/enquiries with plans to automate the process.

I only have around 10 potential vendors that I have already communicated and dealt with but a lot more online and offline I need to find. My issue is my niche is global/international therefore I have to find out how to generate leads/enquiries manually without face-to face meetings unless possible, also I am restricted from conducting local business currently and my goals are to run the website as a digital nomad so figuring out how to get everything going internationally without physical meetups to begin with is key.

 

[Gymjunkie]

@parkerscott

I only have around 10 potential vendors that I have already communicated and dealt with but a lot more online and offline I need to find. My issue is my niche is global/international therefore I have to find out how to generate leads/enquiries manually without face-to face meetings unless possible, also I am restricted from conducting local business currently and my goals are to run the website as a digital nomad so figuring out how to get everything going internationally without physical meetups to begin with is key.

Scheduling online calls won't be too hard. Skype exists. Join groups and forums where your industry folks are and comment there by leaving great comments. You'll gain name and get some clients from there.

 

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