How to Build a Digital Product Marketplace Website like Fiverr
How to Build a Digital Product Marketplace Website like Fiverr
The sale of digital products is one of the most attractive niches in the field of e-commerce, since such products are cheap, easy to manufacture and do not need warehouses and delivery. And if you ever thought about launching an online platform, such as Alibaba, Etsy or Amazon, then this is the perfect article to start. From it, you will learn all about the marketplace of digital products: what it is, how to create and promote it.
Marketplace is not a single store, but a platform where several sellers can sell goods and services to customers. The most famous examples are Alibaba, eBay, Amazon, Etsy, Airbnb, and AliExpress. These marketplaces are considered the best, because on their websites hundreds of thousands of suppliers sell goods and services to millions of buyers around the world.
If you do this, you will have chances of success, however, they will be insignificant, since "stereotypeness" does not work well in a highly competitive market.
The market of digital products is one of the most difficult, because here you need to fight not only with beginners, but also with Amazon, eBay and other titans of the market. Therefore, if you want to succeed, you will have to put a lot of effort, time and invest real money. Below you will find a seven step instruction that will help you with this.
Among marketers, it is customary to divide markets into horizontal and vertical. On horizontal, everything is sold to everyone and everything, on vertical it is placed on specialized goods and services that meet the needs of a specific target group of buyers.
To increase the chances of success, it is better to create a marketplace that sells specialized products. So you stand out against the background of market leaders and will be able to better explore the target audience, therefore, you can use more effective ways to promote.
That's how Amazon started. In the first two years after launch (1995 - 1998), the site sold books, then music CDs and video products were added to the product range, and after some time, electronics, video games, furniture, clothing, and foodstuffs. Amazon first became a monopolist in the vertical market, and then began to conquer horizontal.
Usually a business plan consists of such sections:
So, if a business plan is written for investors and banks, the emphasis should be on cost, income and payback. If you need to win an “eco-tender” - indicate that you will focus on selling, for example, applications for more efficient use of electricity, gas or fuel.
The launch of the digital products marketplace will require investments. The good news is that you can do without a warehouse and working inventory, so that the starting budget will be relatively small.
The money is needed for:
You should not invest big money, because first you need to check the idea, test the platform and understand which methods of promotion provide the most return. All this is best done on a small scale and for little money. It is worth investing on a large scale only when you realized that the idea is 100% successful.
Still it is necessary to connect Google Analytics. This service will help with the analysis of the behavior of visitors, for example, it will count how often they click the buttons “Request a callback” or “Make a purchase”.
What else can you do with Google Analytics:
As Boris Wertz and Angela Tran Kingyens explain in the «Guide to Marketplaces», suppliers usually have several more incentives to enter a new market than customers, because sellers do not lose anything from this, but only create an opportunity to get more profit.
You can search for sellers in these ways:
You can also use this technique in your marketing policy. Moreover, according to research by Influence.co, it is better to cooperate not with big celebrities, but with small thematic accounts - from 1 to 10 thousand subscribers. The average level of involvement for such accounts is higher.
Payment service providers (PSP) are third-party financial services that specialize in creating and integrating payment infrastructure into various web platforms. On the Internet, these companies are usually called “payment gateways”, “payment processors” and “merchant services”.
To create a digital product marketplace, you need to select a payment service provider based on these criteria:
One of the most famous PSP in the world of startups. The company is estimated at 10 billion dollars. The company offers the product Stripe Connec, which is designed specifically for trading platforms. It is used by the "unicorns" Thumbtack, Instacart, Postmates and Lyft.
This is perhaps the most popular payment service on our list. PayPal's market capitalization exceeds $ 100 billion, and profits in 2017 exceeded $ 450 million. The service owes its popularity to cooperation with eBay at the dawn of its history. For cooperation with trading platforms, the company has developed a product PayPal for Marketplaces.
This Dutch company is known to very few people, as it never relied on promotion among the masses (as does PayPal). Instead, Adyen focused on developing a unique technology solution with the lowest commissions on the market. In June 2018, the company became public, and at the time of this writing, its capitalization exceeded $ 16 billion.
Adyen offers a MarketPay solution. The list of marketplaces that use it is impressive: Etsy, Airbnb, Uber and Upwork. Back in 2018, it was announced that Adyen MarketPay would replace PayPal as the default eBay payment service provider.
Payment service that works with European markets. In 2015, it was bought by the French bank Crédit Mutuel Arkéa, which may indicate a good financial condition of the company. MANGOPAY has more than 2500 customers, half of which are marketplaces. The most famous are The Food Assembly, Plentific, WeTravel, Vinted and Chrono24.
You can also pay attention to Paybase, Assembly Payments, Lemon Way, BlueSnap and WePay payment gateways. They are less known, but in work with some niches and countries are more preferable.
#1. What is the digital product market?
#2. Step 1: Niche and Positioning
#3. Step 2: Marketplace Type
#4. Step 3: Marketplace Development Approach
#5. Step 4: Project Business Plan
#6. Step 5: Project Budget
#7. Step 6: Launch the Marketplace
#8. Step 7: Feedback and Improvement
#9. About supplier search
#10. About finding buyers
#11. About payment service providers
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