Hey Guys! I want to create an online marketplace platform. What are the main pros and cons of this business? I am a bit confused cause my friend told me that it’s not a very good idea. Maybe some of you can give me an insight?
Just off the top of my head, your friend is right
Online Marketplace - like Amazon, Ebay, Etsy, et al?
That is who you will be competing with for user attention, not to mention google search listing your marketplace on page one of a search. Most folks never go to page two of a search for a product.
IMO very steep climb to break even, much less profitability. The programming staff and software, and server space is going to be a major issue too.
Hi @Momoko ,
Its great you are trying to build a marketplace, as i am sure you are aware of the differences between an Online store and a marketplace. But some Online store platforms can be developed as marketplaces. For example Sharetribe, SpreeCommerce & Mgento. Here Sharetribe is specifically a marketplace platform but it is not that you cannot use Magento as Marketplace.You will have to install a magento extension to add marketplace functionality. One of the module i can recall is Multi-vendor Module. Drupal Commerce also has similar functionality.
Now here is the twist.You need to decide whether you need to create your marketplace from scratch or you can use Ready online marketplace software.
Creating marketplace from scratch demands lot of efforts time and money.But the outcome of that is Uniqueness. Your marketplace will be unique.you can also apply some architectural changes and have your app available for apple and android phone users.
Secondly about the ready Online marketplace software is where you can save money as compared to creating your marketplace from scratch and you can also save time in creating complex marketplace structure and enter the market with a ready marketplace to do the business.You can pay SAAS marketplace vendor for Hosting , Technical Support and Software Updates.The main advantage is simplicity and Low cost.You can rapidly launch marketplace without a development team and simply access the backend of the marketplace.Three vendors i know are Sharetribe , Near Me and Marketplacer. But i think sharetribe has more good features.The only con here is that you have to depend on them which in many case i think is manageable.
How much did you share with him? Because I believe if executed well it could indeed be a profitable business. But it usually ISN'T and thus it not entice sellers and buyers to get together. However, if you are able to offer benefits to BOTH sellers AND buyers yet make a profit from such then that's a step already taken cared of. Other things you have to worry about are hosting, development and so on. If you still want to create an online marketplace business - you can take a look at this article https://steelkiwi.com/blog/online-marketplace-businesses-key-benefits-to-starting-one/ . It can help you a bit. I think that these guys have @Rustler, @Shahji and @EmilyCowan interesting points of view. @Momoko Read and think about it one more time cause you will invest your money and you need to be sure.
Hey @SELain - welcome to QB Community and thanks for the info!
What business are you in? Sounds like you may have"been there, done that"
@Momoko, first and foremost, WELCOME! There is a lot of expertise here (really great contributions on this thread!), so really awesome that decided to jump it! I am happy to weigh in as well, but before I do, please tell us more about your business so my input can relate as directly as possible. Standing by... Julie