Starting a marketplace is not easy. It helps to know that there are good reasons why marketplaces like Etsy have been successful. In fact, you can learn from their success and avoid some of the mistakes that other marketplaces have made. This article will teach you how to start your own marketplace by looking at what others have done well and where they’ve stumbled along the way.
Find out whether there is a market for your idea.
Before you start your marketplace, it’s important to learn as much as possible about the market and whether there is a need for your business idea. Start by finding out what customers want:
- Do customers really need your service? Are there any similar businesses that have failed in this space before?
- How many people are searching for the products or services that you’re offering online now?
- If a customer searches for something like “black jumpsuits” on Google or Etsy, will they find you first or one of your competitors?
Once you know what customers are looking for, find out how much money you need to start:
Do your homework and identify the key competitors.
I’ve found that the best way to identify the key competitors is to visit their websites. When you’re there, look at the number of products they have and how many reviews they have. You can also look at their social media pages to see how many followers they have. The more followers you have, the more likely it is that people will buy from your site because they trust you and know that you’re a legitimate business.
Another great thing about picking a platform like Etsy is that it’s not just an online marketplace: it’s also got its own community where buyers and sellers can interact in real life too! This means if someone leaves me a comment on my product page saying “I really love this necklace!” I could reply back by saying “hey thanks for stopping by!” or even offer them a discount on another item if there’s something else from my store that catches their eye!
Understand how much it is going to cost and how you are going to raise funds for development.
Every business, no matter how small, needs money to get off the ground. Before you start building your site, it’s a good idea to figure out how much it is going to cost and how you are going to raise funds for development.
Depending on the size of your marketplace and other variables, it could cost anywhere from $10k-$30k just for initial development and product launch costs (such as paying designers, developers, and contractors).
If you don’t have enough funding saved up or don’t have access to investors yet, consider getting a small business loan instead of seeking out venture capitalists early in the process. This will allow you time to build up some sales traction before taking on VCs—which can be difficult because VCs typically only invest in businesses that already have significant revenues or user bases.
How to Start a Marketplace Like Etsy
Here are the steps you should follow:
- Understand how much it is going to cost and how you are going to raise funds for development.
- Do your homework and identify the key competitors.
- Find out whether there is a market for your idea.
There is no doubt that starting an online marketplace is a big undertaking. It will take time and effort to get it off the ground, but if you have a great idea and can build your product with care, there are plenty of ways to make money from it.