What is a Marketplace: Business Benefits, Features, and Common Issues

Even though online marketplaces have been on the rise over the past couple of years, the ongoing pandemic and subsequent restrictions have only accelerated this growth. The marketplaces have become a very lucrative revenue stream your business needs to, but you will need to provide your customers with outstanding experiences in order to be successful. In this article, we will take a look at exactly what an online marketplace is, how you can create one, and some challenges you might encounter along the way. 

What is a Marketplace Website? 

A marketplace website is an online platform your customers can visit at any time of day or from any location to browse through and purchase products. So, how does the marketplace work? Well, an online marketplace is a collection of products provided by third parties. A great example of this is Amazon and eBay. This is advantageous because all you have to do is display all of the products to your audience, while the products’ owners will be responsible for all of the inventory and shipping. Most importantly, online marketplaces offer increased convenience to the shoppers themselves, which is why there is an increased demand for them. Now that we know what a marketplace means, let’s take a look at how one is actually created. 

How to Build a Marketplace 

When talking about how to make a marketplace website, the conversation needs to start with your idea. Your marketplace needs to fill a void or alleviate a pain point a lot of users are experiencing. If we take a look at a marketplace like Airbnb, the founders of this website tried to solve a problem many people were dealing with in terms of the lack of hotel availability. Then it would help if you considered your target audience. This includes things like their age, location, occupation, and many other factors. 

Once you have all of the details mentioned above, you can start creating a visual representation of the idea by building a prototype. It is a good idea to partner with a technology company at this stage since they will be able to consult you on the technical requirement and some challenges in the digital marketplace. Some of the best marketplace development services will also offer you a business analyst to make sure that you can target the right audience with your platforms and have all of the features you need. Speaking of marketplace issues, let’s explore these in the next section. 

Current Issues in the Global Marketplace 

When looking at online marketplace industry challenges, we need to consider everybody involved. From the user’s perspective, they may have difficulty understanding specific details about the product. For example, if they are searching for clothing or other personal items, it will be hard for them to tell if these items will be a good fit. This is why a lot of online retailers are using AR to overcome such challenges. 

From the seller’s perspective, they also face a list of challenges in the marketplace: 

• Data security
• Customer loyalty
• Unexpected price increases
• Economic uncertainty
• Stockouts and inventory overload
• SEO mastery
• Returns, refunds, and fulfillment

Finally, if we look at the platform owner’s challenges, they are responsible for all of the technical aspects of keeping the website up and running. If they have an m-commerce app, the same service and maintenance requirements apply as well. They also need to make the platform as attractive as possible for both shoppers and sellers. This is usually done by advanced CMS systems, like Magento, which offer personalized recommendations, tracking customer actions, and much other useful information. 

Trust Skywell Software to Build Your Online Marketplace

In the article, we talked about how to sell in a marketplace and some of the challenges you may encounter as the platform owner. However, when you partner with a trusted service provider like Skywell Software, you will not need to worry about things like support and maintenance, making updates to your site, or any other aspect of building your online marketplace. We have extensive experience building retail software solutions for some of the largest brands in the industry. Contact us today to learn more about how we can help you.