We’ve previously written about the pitfalls of using off-the-shelf templates to build complex platforms like online marketplaces. In particular, we highlighted how turkey solutions fail to adequately support multiple challenges of new marketplace concepts, in particular: user experience, user flows, scalability, shipping, APIs, and revenue streams. In fact, that post did such a good job of driving the point home that other software development companies have used it as a reference point.
In comparison, custom marketplace development offers, not only almost unlimited flexibility, functionality and scalability, but critical for success, a blueprint for mapping a path to product-market fit and identifying growth opportunities.
That said,
Off-the-shelf marketplace builders do have some advantages
Budget friendly
If you have a limited budget for developing an online marketplace, off-the-shelf ecommerce software can be a cost-effective solution. These software solutions often come with a range of features and functionalities that can be customised to meet your business needs.
Low skills threshold
If you don’t have a team of developers or technical experts to build and maintain a custom ecommerce solution, off-the-shelf software can be a good option. These solutions typically come with support and documentation that can help you get up and running quickly.
Quick implementation
If you need to launch your online marketplace quickly, off-the-shelf software can be a good choice. These solutions often have pre-built templates and integrations that can help you get started faster than building a custom solution from scratch.
The most important use cases for turnkey marketplace solutions
Speedy implementation and resource-friendliness by themselves are not necessarily enough reason to utilise a turnkey solution. As we’ve pointed out, such a hasty decision may eventually lead down a dead-end that could result in just the opposite: wasted time and money.
As an example, one of our clients, Affordable Art Fair, built the initial go-to-market version of their online art marketplace with Magento. The resultant architecture was difficult to adapt, almost impossible to scale, and slow site speed hurt the UX, which necessitated a complete custom overhaul.
However, at the risk of contradicting ourselves, there are instances where custom development amounts to an overkill. This is especially true for novice marketplace entrepreneurs who haven’t built anything yet, or who have gained very little traction or user feedback from badly implemented or overcomplicated MVPs.
1. Test if there is a general need in the market
The first priority of any aspiring marketplace entrepreneur should be to check if there is in fact a problem that needs solving in their chosen target market. Driving traffic to a landing page, which is populated with the basic premise of your marketplace and a sign-up form, could indicate if there is interest from either side (buyers or sellers) in the market.
Other strategies include:
Keyword research: Using turnkey software, entrepreneurs can research the most commonly used keywords and search terms used on and off their site. This can help them understand if there is significant demand for their concept, and if there are already existing marketplaces targeting those keywords.
Social listening: Turnkey software can be used to monitor social media channels for mentions of specific keywords or product categories related to the marketplace idea. This can help entrepreneurs understand what people are saying about existing marketplaces, identify potential gaps in the market, and gather feedback on what customers are looking for.
Surveying: Turnkey software can be used to create and distribute surveys to a target audience, to gather data and feedback on their needs and preferences. Surveys can be used to test the demand for a specific marketplace idea and understand what features and functionalities would be most important to customers.
It is important though, not to confuse testing for a need in the market with validating assumptions about users in that market. The prior forms part of market research, while the latter works towards product-market fit, i.e. do users find your particular solution useful?
2. Formulate and refine your value proposition
Online marketplace startups can leverage turnkey software in several ways to gain a better understanding of various market elements. The information gathered can then be used to make data-driven decisions about the new marketplace’s value proposition.
- Market analysis: Turnkey software can provide startups with access to data and analytics on their target market, including consumer behaviour, popular product categories, and regional trends. This information can be used to make informed decisions about which product categories and locations to focus on.
- A/B testing: Turnkey software can enable startups to run A/B tests to evaluate different product categories or locations to determine which ones are most successful. This can help identify areas of the market with the greatest potential for growth and profitability.
- User feedback: ecommerce software often includes tools for gathering user feedback, such as surveys or ratings and reviews. Entrepreneurs can use this feedback to identify areas where customers are experiencing problems or frustrations with existing solutions, and use this information to create a better solution.
- Testing and experimentation: plug-and-play marketplace software can enable entrepreneurs to quickly test and experiment with different marketplace concepts and features to see what resonates with their target audience. This can help identify potential problems and challenges that need to be solved before launching the go-to-market version.
3. Build user personas
User feedback collected via turnkey software can also be used to create and segment user personas. Such an exercise will improve audience targeting and engagement once the actual MVP version of the marketplace is up and running.
Some of the main variables that can be used to build user personas for online marketplaces:
Demographics: This includes variables such as age, gender, income, education, and location. Understanding the demographic characteristics of users can help entrepreneurs tailor their online marketplace to specific groups of people.
Behaviour patterns: This includes variables such as the frequency of use, the types of products or services purchased, and the time of day that users are most active. Understanding these behaviour patterns can help entrepreneurs design a user experience that is tailored to the needs of their users.
Goals and motivations: This includes variables such as the reasons why users use the online marketplace, their goals for using it, and the benefits they expect to receive. Understanding these motivations can help entrepreneurs design a marketplace that meets the needs and expectations of their users.
Pain points and challenges: This includes variables such as the challenges users face when using the online marketplace, the pain points they experience, and the barriers they encounter. Understanding these pain points can help entrepreneurs design a marketplace that addresses these challenges and makes it easier for users to achieve their goals.
Communication preferences: This includes variables such as the preferred methods of communication and the frequency of communication. Understanding these preferences can help entrepreneurs tailor their communication strategies to the needs of their users and ensure that they are receiving the information they need to use the marketplace effectively.
Our clients, FanPass, a very successful event marketplace, tested their idea with a super smart and cost-effective strategy. They used competitor platforms such as Viagogo, Ticketbiz, and Gumtree to learn more about sellers and buyers of event tickets.This helped them target the right audience with their MVP version with rapid growth as a result.
Which type of turnkey software is best for testing your marketplace idea?
These days there are a bewildering array of platforms that offer off-the-shelf ecommerce templates for marketplace development, each with their own advantages and disadvantages. Your options include no-code platforms like Bubble or Webflow, low-code platforms like Shopify, general website builders with ecommerce plugins like WordPress with WooCommerce, and dedicated marketplace builders like Sharetribe and Mirakl.
The choice between them depends on the complexity of the online marketplace being developed, the customisation required, the available budget, and the technical skills of the development team.
Note that there can also be big differences between the options within each category. For example, Sharetribe is a good option for entrepreneurs who want to quickly build and launch a basic online marketplace without requiring extensive technical skills. However, entrepreneurs who need more advanced customisation options or more complex features may find Mirakl a better option.
Here’s a basic breakdown of the pros and cons of each category:
No-Code Platforms:
Pros:
- Easy to use, even for beginners
- No coding skills required
- Fast development and deployment
- Affordable, as they often have low or no subscription fees
Cons:
- Limited customisation options
- May not be suitable for more complex marketplaces
- Limited functionality compared to dedicated turnkey software
- Limited support for custom integrations or extensions
Low-Code Platforms:
Pros:
- More flexibility than no-code platforms
- Faster development than traditional coding methods
- Can integrate with custom code or third-party tools
- More affordable than dedicated marketplace builders
Cons:
- Steeper learning curve than no-code platforms
- Limited customisation options compared to dedicated marketplace builders
- Limited functionality compared to dedicated marketplace builders
- May require some coding skills or technical expertise
General Website Builders with Ecommerce Plugins:
Pros:
- Easy to use, even for beginners
- No coding skills required
- Affordable, with low or no subscription fees
- Can create a basic online marketplace quickly
Cons:
- Limited functionality compared to dedicated marketplace builders
- Limited customisation options
- May not be suitable for complex marketplaces
- Limited support for custom integrations or extensions
Dedicated Marketplace Builders:
Pros:
- Extensive functionality and customisation options
- Supports custom integrations and extensions
- Suitable for complex marketplaces
- Often comes with dedicated customer support
Cons:
- Higher cost than no-code or low-code platforms
- Steeper learning curve than no-code or low-code platforms
- May require more technical expertise
- Longer development and deployment time
Next steps
By using turnkey software to conduct market research, test the market, gather user feedback, and monitor marketplace metrics, marketplace entrepreneurs can identify any problems or issues in their chosen target market and develop solutions to address them. This can help increase the chances of marketplace success and long-term sustainability.
The next steps in that process would be to create a low-fidelity MVP as part of the discovery phase of the custom development process.