When building a marketplace, it is crucial to take into account various aspects, including scalability, high availability, performance, and security. Ensuring a seamless customer experience is another priority but to gain popularity, an organization has to attract vendors. If a company is able to engage large merchants, their audience is likely to follow them and register on a marketplace application.
Furthermore, consumers are not willing to connect to the system that does not satisfy demand in terms of goods, services, and prices. As the number of brands increases, so does marketplace appeal. In addition, since sellers do not risk anything when joining the platform, it is easier to connect them first. Therefore, drawing the attention of providers is a key task for marketplace promotion.
This article describes the best strategies for attracting vendors to your online marketplace. Let’s get started.
Top 7 strategies to attract vendors to a marketplace platform
1. Conduct competitor research and come up with better conditions
Before building a marketplace platform, it is important to analyze competitors and discover what terms they offer. After conducting this research, you will be able to come up with better conditions to sidestep rivals.
To engage merchants, you can get the following ideas for marketplace promotion:
- Set up a lower commission. When launching a marketplace in a highly competitive environment, it is reasonable to provide reduced fees in comparison with other apps. This way, sellers are more likely to choose your system.
- Create different pricing plans. Applying a combination of monetization models, you will enable sellers to choose the most convenient option, for example, commission per transaction, listing fees, and monthly/annual subscription. Thanks to this, you will fulfill the business needs of all sellers.
- Offer a free trial to try out marketplace functionality. When thinking about how to promote a marketplace, the first strategy that generally comes to mind is a trial period. By providing the opportunity to operate on a marketplace application without charge, you will manage to attract vendors much easier, boost their satisfaction, and increase credibility in an online marketplace platform.
What’s more, you can collaborate with potential or existing merchant partners to explore their suggestions and proposals. Through direct communication with vendors, you can find out how to address their needs in the best possible way.
2. Deliver functionality for business process automation
When creating an online marketplace, it is essential to deliver the features required for automating various business processes. These modules involve:
- A data visualization dashboard. A company should allow sellers to visualize data such as customer behavior insights, sales volume, as well as the number of product views and purchases.
- Order management. To attract vendors, you have to provide them with the possibility to generate invoices, process orders, and track payments. In addition, it is important to set up order sorting by date, coupon code, and payment method. With this functionality, companies streamline order management and improve efficiency.
In order to deliver this module, engineers can integrate marketplace software with an application programming interface (API), for instance, BigCommerce Orders or Salesforce Commerce Cloud. Check out third-party services — for enabling online payments, notifications, etc. — that you can use when building a marketplace.
- Inventory management. If you want to create a marketplace for retailers, manufacturers, or wholesalers, it is crucial to let them manage inventory through the system. With this aim in view, software experts can use an API, this way avoiding the need to implement this functionality from scratch and saving you costs.
For example, by using the Fulfil.IO REST API, organizations can track stock status in real time with RFID tags and barcodes. The tool also allows for automating business processes like procurement and warehousing. Hence, it is crucial to include this module when making an e-commerce marketplace platform, a digital pharmacy marketplace, or another type of solution.
Depending on industry-specific needs, online marketplace developers can deliver many other components, for instance, a shipping gateway, chat, notification system, and geolocation.
3. Implement data analytics to analyze customer behavior
Data analytics is vital for gaining actionable insights into user behavior and improving the efficiency of advertising campaigns. By employing data analytics, vendors can monitor a wide range of metrics, involving lifetime value, consumer engagement rate, the number of product views and purchases.
Companies will also be able to identify buying habits and reasons for churn. As a result, it is possible to ensure a better customer experience and increase sales. Therefore, data analytics may become a governing factor for merchants when choosing a digital marketplace platform.
To implement this functionality, engineers can integrate a third-party API into marketplace software, for instance, Mixpanel or Kissmetrics. At Arateg, our team used Mixpanel when making an e-commerce fashion marketplace.