Marketplace platform owners struggle with unique challenges, different from any other business. Because marketplaces are two sided, it means that platforms have two sets of customers -- buyers and sellers -- and essentially must adopt two growth strategies.
And this "chicken and the egg" -- or marketplace liquidity -- problem isn't the only one. The good news is that these challenges aren't impossible, just different. Anad Srinivasan outlines the four hardest problems that marketplace platform owners face and how to overcome them.
Problem 1: Product Presentation
Traditional business owners have total control over how their product is presented to their customers. They usually hire models and professional photographers to create appealing promotional images that entice people to purchase.
On the other hand, marketplace platform owners typically don't have so much control. That's because they aren't the ones adding products to the platform, it's the sellers. Because many sellers don't know best practices for product presentation, they sometimes tend to post inadequate pictures and incomplete descriptions.
Solution: Educate Your Users
Bonanza developed educational material to help sellers create successful listings with good photographs, ad copy and other key features. With a little work, you can replicate this process to help your sellers understand and implement product presentation best practices.
Problem 2: Custumer Service
Conventional businesses control a centralized customer-management system that makes finding customer queries easy. The buyer's experience rests with the business. In a marketplace platform, it's a little more complex. When buyers are unhappy with a seller's product or service, they typically gripe at the marketplace instead of contacting the seller.
Solution: Set The Right Expectations
Marketplace platforms can't survive by pouring resources into managing buyer-seller disputes. Companies like Alibaba and eBay are successful because they communicate to buyers that when a product or service defect exists, it is the factory or seller, not the platform, that is responsible. Make sure you solidify the expectation that both sides are responsible for fulfillment of their agreement.
Problem 3: Marketplace Liquidity
Simultaneously building both sides of a marketplace platform is no doubt challenging. What often happens is that a marketplace is inherently attractive for buyers on concept alone, but owners have trouble recruiting sellers (or vice versa). When one side is flooded and the other sparse, no transactions will be made.
Solution: Build Customer Relationships
Justin Knechtel of Swap says the solution lies with marketplace platforms building solid relationships with customers (both buyers and sellers). This way, when something does not work out as planned, customers are still willing to work with the marketplace. When you wow a customer, you also create brand evangelists who will tell great stories and influence others to transact on your marketplace.
Problem 4: Trust
Building trust is necessary at every stage of your marketplace platform. Buyers expect a seamless marketplace experience and that sellers have been thoroughly vetted. When a problem arises, it may impact the trust and conversion rate on your platform.
Solution: Peer Review
Shaun Savage, the founder of GoShare, says that a transparent peer-review system is absolutely necessary. This goes for your sellers and sellers, as well as your platform. One way to accomplish this may be to ask customers to review your business on services like Yelp. When new customers see these reviews, they may be more willing to give your product a try.
Read source article HERE.
How do you handle these problems with your marketplace platform? Let us know in a comment below.