An immediate challenge marketplaces face in the very beginning is onboarding the first supply. To bring in potential demand, you need providers who offer space, goods, or services through your marketplace. In this article, Mike Williams shares his tips and insights for growing the supply side of a marketplace business.
In the very beginning, marketplaces face the challenge of having to build both supply and demand. Any marketplace needs both sides—also called providers and customers—in order to connect them, generate transactions, and find initial liquidity.
Although there are many ways a two-sided marketplace can solve this challenge often called the chicken-or-egg-problem, it’s generally best to start with the focus of onboarding supply. Having the first optimal listings will make it a lot easier for you to generate demand and bookings. This is how I started with my music studios marketplace Studiotime and took it to thousands of listings in a matter of months.
In this article, I break down the basic steps I used to onboard supply for Studiotime: understand where your supply is, find the best channel to reach them, create an optimal outreach message, prompt listing creation, and deliver an ROI for your first users. These tactics can be applied to any early-stage marketplace business for building and growing initial supply.
Understand where your supply is (online & offline)
When you start building your supply, it’s important to thoroughly understand two things.
First, is the segments of supply for your marketplace. This is not only understanding the existing market that you serve but identifying supplier groups within that market. For instance, with Studiotime the market supply could be segmented as the lower-level economy (home studios), mid-level studios, to larger businesses (top-line studios). Each person or business that makes up the supply in the existing market will fall within one of these segments, which has its own challenges, needs, and pain points.
The second thing to do is to identify whether your supply is predominantly online or offline. For instance, a certain segment of your potential supply might be all-brick-and-mortar businesses or private individuals with no online presence. Others might be more online and have a website, a Yelp listing, a social media presence, etc.
Usually, my recommendation is to focus your efforts on the supply segment that already has an online presence. With limited time, resources, and little to no brand awareness early on as a marketplace, online supply-side is likely much easier to identify, reach out to, and convince to join your marketplace. What is more important is that you can contact and onboard them in an easily measurable and scalable way.
Consider social channels for reaching your suppliers
If your potential suppliers have an online presence, you probably have a few different ways to reach out to them. In addition to an email address and other contact information, they might have one or more social accounts with direct messaging available (i.e: Twitter, Facebook, Instagram, etc).
With multiple ways to contact potential supply, it’s important to choose the best alternative. It should be a channel that likely first gets you a reply (reaches them), allows you to have a conversation or dialogue if needed, and lets you easily track and evaluate how effective this is. Email has typically been a great way to reach out to supply when they are existing businesses, especially enterprise and technology companies. However, social channels are emerging as better-suited channels in social-first consumer and social markets.
So, first, spend some time researching supply and their social channels. See if they have a presence on social platforms where they are regularly posting and interacting with their community. In the case of Studiotime, we took to Instagram because we realized there was a large number of studios for whom having a presence on Instagram is important. In fact, they invested considerable time on their end to build a social presence for their business.
We knew that having a well-branded account for Studiotime would be something they would reference when seeing our message. That is why we focused on initially creating a narrative through our posts. We posted frequently about our first studios, promoted their content, and built up initial awareness and visibility before we began to reach out to more studios. This way, our account gave potential providers a visual understanding of who we are and what we do. It also helped build trust in us being able to provide value for them.
Building a social presence is a great way to create reference and trust with supply early on. A bonus for us using Instagram was also that it established a direct dialogue. The messaging with supply was almost real-time, which allowed us to have a more humanized conversation with them.
Test your outreach messages
In every stage of your marketplace business, it’s important that you can effectively message what your marketplace is, what’s your core value proposition, and what typical supply needs you’re solving. While your message and tone of voice may change over time, it is important to start testing this early. Contacting your potential first suppliers is a great place to start.
As a general rule, I suggest keeping it brief, clear, compelling, and always ending with a call to action. We followed this with Studiotime (and still do). Here are a few more great tips on effective writing.
Ideally, of course, your messages should result in potential providers being prompted to visit your marketplace and explore it. This you can track in your site analytics. But you can also tell if your messages are getting through by looking at the replies your messages get. Straightforward replies where your suppliers either say they want to join or that your marketplace isn’t for them, or where they ask specific questions they have after visiting your site, are a great indicator of well-written messages.
After doing this repeatedly, testing, and then improving, you can create a repeatable outreach process that is very straightforward. At Studiotime, we also created message templates based on our experiments. That way, when our team grew, a member of the team that focused on outreach and supply acquisition could easily continue with the work.
Outreach to supply represents a great opportunity to refine your marketplace messaging. In addition, you should also consider direct contact with your supply an opportunity to get feedback and ask questions. This helps you understand your suppliers’ needs better and either validate your marketplace business idea or figure out how you should tune your business model.
Prompt listing creation & optimize listings
In the earliest stages of your business, it’s beneficial to know your first users, who they are, and how you can help them succeed on your marketplace. In the early days of Studiotime, this was something that we were able to do by focusing on outreach efforts on supply specifically, tracking the conversations, conversions, and even user signups on our marketplace.
If suppliers are joining your marketplace from your initial outreach but not creating listings, this is your opportunity to reach out and help them. Send them a personalized message to ask them if they need help getting started. It’s also a good idea to provide tips to help optimize their listings. Why not include a reference listing they can benchmark against?
Supporting early users with listing creation helps your providers to get more business, and you to have ideal and optimized listings on your marketplace. Most importantly, reaching out to help at this critical stage shows your providers that you are there for them. This allows you to build a strong relationship with them from early on.
Needless to say, you should also regard these contacts as input to improve your user onboarding and listing creation process. If a large part of your suppliers gets stuck in the listing-creation phase, that might mean the process is too complicated. While personal contact is great and necessary for the first suppliers, in the future, you will want to create a process that a large part of providers is able to complete on their own.
Deliver ROI as soon as possible
After going through the steps above, you hopefully have your first supply-side listings that are bookable through your marketplace. However, you shouldn’t stop there. Joining your site and creating a listing is a big commitment from early users, so it’s important that that commitment is rewarded as soon as possible. Do whatever you can to directly help market these listings and deliver ROI. This will help make users feel rewarded for joining and for the time they’ve invested in your marketplace.
Ways that you can do so are by marketing your listings to help increase awareness for them and generate more visibility for them (even if just on social by tagging them). Eventually, you can use this as a main marketing strategy to drive bookings for those listings you do so with.
One of the most effective marketing strategies we’ve used with Studiotime is posting studios on our Instagram after they sign up, select a subscription, and have a listing live. This is an immediate social ROI for them: we help build awareness for their studio, we drive traffic to their listing(s) on Studiotime, and usually even help generate booking requests.
Onboarding initial supply is a critical phase in the early stages of a marketplace business. More often than not, it is also labor-intensive and mostly manual: researching, contacting, and helping initial providers is time-consuming work that can’t be automated. But spending the time will pay off as it builds you a high-quality initial supply that you have a strong relationship with and that is committed to your marketplace. What is more, you will have learned a lot in the process about your messaging, your business idea, and your marketplace user experience.
All of this will greatly help you with generating demand for your marketplace. In my next article, I will discuss tactics to match supply and demand and reach liquidity with your marketplace.
Stay tuned for Mike’s next guest post, where he shares five tips for generating bookings and reaching liquidity with your marketplace. For more of Mike’s thoughts about onboarding initial marketplace supply, check out his video below.