The practical guide to building an online marketplace

Introduction: How to create an online marketplace one step at a time

Welcome to the beginning of your journey as a marketplace entrepreneur!

The purpose of this guide is to help you get started with your journey and move forward one step at a time. The iterative approach will help you maximize learning, minimize costs, and make sure your early stages set your idea up for success. The content you find here is the complete, free version of our Amazon bestseller: The Lean Marketplace. A practical guide to building a successful online marketplace business.

Using this guide, you follow the steps and divide the work into three phases:

Phase 1: Get started with market research. Learn a few things about marketplaces and the anatomy of a great marketplace idea. Understand how marketplaces make money and how to avoid some business-model pitfalls and set the right pricing level. Finally, you can work on validating your idea and business model. All this work can be done before you spend a dime on building your marketplace website!

Phase 2: Build a marketplace website. This stage is all about setting up your marketplace platform. This guide will go through the project step by step. We’ll help you build the first version of your marketplace website in the fastest, most affordable way possible – without sacrificing user experience.

Phase 3: Launch and grow your marketplace. Marketplaces are unique in many ways. This guide will also help you approach launching and growing your business in a way that maximizes learning and prevents the biggest pitfalls. You’ll learn how to build your initial supply before launch, how to do a successful product launch and a marketing launch, and how to start growing your business iteratively.

We’ve worked with marketplace founders for over a decade. This guide is the collection of everything we’ve learned from our own successes and failures. We sincerely hope it will help you get started with your journey and bring your marketplace idea to life. Let’s get started!

I. Getting started with creating a marketplace business

An online marketplace is a platform that brings together sellers and customers – supply and demand. A marketplace lets them find each other, facilitates their transactions, and generates revenue through marketplace fees.

Examples of online marketplaces are Airbnb, Etsy, eBay, and Uber. If you have a business idea that works a bit like them – but don’t know how to get started – this chapter is for you. These articles help you understand how online marketplaces work, how to find a great marketplace idea, and how to turn your idea into a successful business.

1. • 7 min read

   What you need to know before starting a marketplace

   An introduction to online marketplaces. What they are, why they are booming, and why you should build one.

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2. • 11 min read

   How to find great online marketplace ideas

   How to spot marketplace opportunities and transform them into great business ideas.

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3. • 9 min read

   How to find the right marketplace business model

   What different revenue models are available for online marketplaces? Which model is the best for your concept?

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4. • 9 min read

   How to prevent platform leakage

   People often try to take payments off the marketplace. Learn how to discourage people from going around your payment system.

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5. • 11 min read

   How to set pricing on your marketplace

   How much value should you capture from the transactions that happen on your platform? Learn different ways to approach pricing.

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6. • 11 min read

   How to validate your online marketplace idea

   Before building your website, you should validate your marketplace idea and business model. Learn the best ways to do this.

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II. Building a marketplace website

The trickiest part of building a marketplace business isn’t building a marketplace website. The biggest challenge is finding a business model that works for you, your supply, and your demand. That’s why it’s important not to spend too much time building the first version of your marketplace website.

This chapter guides you through building your Minimum Viable Product (MVP). The goal is to help you launch your online marketplace fast and start learning about your audiences – while still offering them a lovable user experience from day one.

1. • 12 min read

   How to build a Minimum Viable Platform (MVP)

   Launching early is critical. Learn how to build a marketplace website as quickly as possible.

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2. • 7 min read

   How to communicate your value proposition

   Your copywriting and design matter more than you might think. Learn how to convey you core message to your users.

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3. • 14 min read

   How to help customers find what they’re looking for

   One of the most important features of a marketplace website is discovery. How can you be sure your users find the most relevant results?

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4. • 13 min read

   How to design your transaction flow

   To be successful, your marketplace needs to facilitates transactions. Learn how to design a smooth transaction flow.

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III. Launching and growing your marketplace business

The best online marketplace businesses improve over time. Plan your launch in two steps, starting with a product launch that lets you collect initial feedback from your most important users. Then go for a bigger marketing launch with the help of concrete, low-budget strategies.

Tracking the right marketplace metrics and nurturing your user community should be a priority from early on. As you’ll see, this work will support your marketplace growth also in the long term.

1. • 11 min read

   How to build supply

   Your marketplace platform is now ready. Before you can invite the customers in, you need to build the initial supply.

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2. • 13 min read

   How to launch

   It’s time to get your first customers on board. Learn how to find them and how to make their first experience on your site a success.

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3. • 12 min read

   How to grow your marketplace

   Your business idea is validated and you have an initial user base. The next step is to focus on marketing and growth.

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4. • 13 min read

   How to measure your success: Key marketplace metrics

   After you’ve launched, you need to be able to tell whether your business is healthy or not. Learn the metrics you should follow.

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5. • 16 min read

   How to build trust

   Trust is the foundation of successful marketplaces. Learn how to build trust between your providers and customers.

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6. • 12 min read

   How to turn your marketplace into a community

   A great way to keep your users engaged and committed to your platform is building a community around it.

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The best way to learn? Start building a marketplace!

There are 16 articles in this guide, each written to help you tackle a specific challenge of creating an online marketplace. You’ll learn how to validate your concept, build your platform, grow your user base, and, most importantly, facilitate transactions between your users. The articles paint a big picture and also dive into the nitty-gritty details.

You can read the articles one by one to get a complete understanding of our thoughts and recommendations. Or you can use the guide as a go-to source to read while you work on your business. If this guide helps you avoid even one of the mistakes we’ve made ourselves building online marketplaces over the past ten years, we consider it a huge success.

But in the end, there’s only so much you can learn from a book. The best way to learn is to start building your own marketplace business.

Creating a marketplace is a challenge, but it’s also incredibly rewarding. Whatever happens, the things you’ll learn along the way about building a platform, a user base, and a community will stay with you for the rest of your life.

Best of luck with your marketplace business!

 

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