Hacks to Build a Marketplace That is Profitable

An Overview of the Online Marketplace

Did you know? There are millions & millions of digital transactions happening through successful online marketplaces. We are bullish on advising entrepreneurs to build an online marketplace website where multiple sellers offer promising revenue in commissions alone!  

If you are a small business owner, startup, or entrepreneur, it is time to take your brands to heights with online marketplace software like ShipTurtle. Most brick-and-mortar establishments are building a marketplace business to generate high returns. Your business could be the next? 

According to a report, the global e-commerce marketplace is expected to reach a whopping value of over $ 6.3 trillion by the year 2024. Thousands of online marketplaces like Amazon, eBay, Etsy & so many more focus on various products, cater to different industries, and offer unique buying and selling experiences. 

If you are looking for a hack to your online marketplace, this article will guide you through making your marketplace app profitable. With this note let us hack you into the online marketplace revenue generation techniques & a lot more!

What is an Online Marketplace?

An online marketplace is a digital platform where buying and selling takes place. Multiple vendors sell their specific goods & services to prospective buyers. And the online marketplace acts as an intermediary between the vendors and the buyers. Successful marketplace websites offer features that include search and filtering options to help users find the right goods & services, secure payment transactions, customer feedback, reviews, and ratings to build trust. 

Unlike traditional brick-and-mortar retail stores, which typically sell their products and services, maintain inventories, and so forth, online marketplaces act as intermediaries, facilitating operations between various buyers and vendors without owning the goods & services on the platform. This makes it easy for brands to list products based on the type of marketplace. 

These online marketplaces like Airbnb, Etsy, and Alibaba also provide a seamless and centralized application software or website platform that allows vendors and users to buy and sell products, add a listing fee for a product, compare prices, analyze reviews and feedback, and make informed decisions. 

One of the key features of the online marketplace is its ability to host a diverse range of vendors, including individual entrepreneurs and small traders to large retailers and brands. The marketplace can offer B2B, B2C. C2C marketplace revenue model. These online store app development gives diverse features that offer vendors and consumers a broad selection of products and services across various categories. 

Online marketplaces involve tools to generate revenue through various monetization strategies, such as charging vendors-based listing fees or platform commissions on each transaction, offering premium membership services with additional features, or displaying advertisements to users. These revenue tools help start marketplace development process businesses and also sustain and invest in further business development and expansion.

Why is Marketplace Business Model Perfect to Grow Your Business?

Off-the-shelf marketplace software solution offers desirable functionalities to build a minimum viable online marketplace application or a full-fledged app for commission-based revenue. Here’s how you can grow your business with online marketplaces in your target industry.  

Building a marketplace has low-risk factors

The marketplace in 2024 & beyond will become better and bigger for all entrepreneurs and brand owners alike. Investing in an online marketplace is far less risky as compared to the physical store. Moreover, building a marketplace website from scratch is no longer expense, especially using the Shopify + Shipturtle combination.  

However, the sole risk connected with an online marketplace is not being able to meet client demand if traffic increases all of a sudden.

Wide expansion, collaboration, and scalability opportunity

Buyers from all over the globe have access to your products or services offered. All you have to do is create a multi-vendor marketplace website on Shopify. Your products will get the exposure and advertising that you won’t get if you sell them in a traditional store. 

It would help if you also learned how to build a successful dropshipping business.  

Low marketing costs and higher returns

Since your online marketplace already pulls in established brands with a huge user base, the marketing efforts become low.

Enhance commission fees with marketplace operations

Unlike the single-vendor marketplace, a multi-vendor marketplace can charge a subscription fee from vendors or a certain fee for each transaction, allowing merchants like you to earn commissions.

Better product, better service, higher footprint in the marketplace

As the user base expands, the value proposition for both buyers and sellers strengthens. Buyers benefit from a wider selection and potentially better deals, while sellers gain access to a larger audience. This virtuous cycle, known as the network effect, leads to:

• Increased marketplace footprint: The marketplace has become a more prominent player in the industry, attracting even more users.
• Enhanced revenue generation: With a larger and more engaged user base, the marketplace has the potential for significant revenue growth.

Opendoor, a real estate online marketplace platform, exemplifies this concept. By focusing on a streamlined buying and selling experience, they saw a nearly 1.5x times revenue increase, demonstrating the power of a strong network effect.

12 Hacks to Build a Marketplace Website That Is Profitable

Having briefed you on why the marketplace is perfect for your e-commerce to grow and profit, let’s introduce top hacks to build your marketplace that can oust the competitors. 

Furthermore, here’s how you can leverage Shipturtle, a no-code marketplace builder on Shopify, to craft different types of online marketplaces:

I. Create multi-vendor seller profiles on your marketplace website

• Since your marketplace can list multiple vendors on its platform, you should have different seller profiles for buyers to view exclusive product ranges from their preferred sellers. This contributes to a better user experience and subsequently, better sales. 
• It is, however, important to incorporate seller profiles with customized access to the marketplace, allowing vendors control over their pages, fields, lists, and policies within the multi-vendor marketplace. 
• Having a dedicated seller profile page is essential, it provides consumers direct ways to connect with their preferred brand and trading partners. It is crucial to bring buyers to your online marketplace. 

Customers demand transparency in their purchases. Shipturtle’s innovative utility generates unique Seller Pages for each vendor, giving your customers a comprehensive look at their products, brand descriptions, policies, and contact details. 

rashmi chouhan, JOURNALIST

II. Build a marketplace by attracting trusted vendors

• Your vendors are the backbone of your marketplace. Don’t just onboard any vendors to the online platform. Shipturtle provides a robust selection process, ensuring vendors offer high-quality products or services that revolve around your target audience.
• Another way of attracting quality vendors is by making a flexible commission structure in the marketplace. Shipturtle lets you design a win-win scenario in this case. It offers commission rates or listing fees that are attractive to vendors without compromising your profitability.
• Empower vendors with essential tools. Shipturtle provides tools like list managing, customer communications, and sales tracking. This gives a smoother experience for vendors and keeps them invested in your marketplace. 

III. Build vendor dashboards for better multi-vendor management

• If you are using cart builders like Shopify or WooCommerce, it becomes significant to have a dedicated onboarding page for each vendor, ensuring a seamless process that minimizes the time required to bring products to the market.
• Every multi-vendor website operates with a unique multi-vendor marketplace model, order processing criteria, and shipping and supply chain management workflow. When building your multiple-vendor marketplace store, the website design should be tailored to incorporate these fundamentals.

Stop managing multiple vendors, especially when relying on clunky manual tools or cumbersome Excel spreadsheets. ShipTurtle is revolutionizing your vendor management experience with most advanced and configurable Vendor Dashboards. 

sHARAD kABRA, SHIPTURTLE

IV. Expand your product catalog for the online marketplace

• A successful business model continuously expands its product catalog by onboarding new sellers and offering a wide range of products or services. 
• It is also to be noted that this wide product catalog also needs regular inventory updates to keep users engaged and encourage them to return and make purchases. When you launch your marketplace it takes a lot of effort that can make your business profitable and successful. 

V. Create a marketplace that has a user-friendly interface

• One of the major parts of a successful marketplace is the smooth user interface targeting effortless navigation. Shipturtle’s out-of-box modules let you design an intuitive layout. Think clear menus, logical product categorization, user-friendly search bars, and unique functionalities to suit B2C, C2C, and B2B marketplaces. 
• Every user has different ways of utilizing an online marketplace and it is evident to make your marketplace a perfect place for buyers and sellers. 
• Understand what the user needs and ensure transactions quickly. This allows consumers to come back to the marketplace again and again. 
• Your marketplace should be intuitive, appealing, and smooth at the same time. Shipturtle empowers you to create an Amazon-worthy UX:

1. Product Pages that Convert: Showcase your vendors’ offerings with high-quality photos and detailed descriptions. Shipturtle lets you create product pages that are easy on the eyes and informative, increasing the likelihood of conversions.
2. Search Functionality Matters: Fast and accurate search is paramount. Shipture lets you integrate robust search features, including autocomplete and advanced filters. 
3. Mobile-First Design: Shipturtle ensures your marketplace is mobile-friendly, allowing customers to seamlessly shop from anywhere.

You should also leverage Shipturtle’s built-in analytics to understand user behavior and optimize your marketplace accordingly. Track what products sell well, how users navigate your site, and identify areas for improvement. 

rashmi chouhan, Journalist

VI. Build a marketplace that drives customer engagement

• When you choose to build your marketplace, driving and retaining your customer base is an important part of a successful store. With Shipturtle you can integrate popular marketing tools, allowing you to target your ideal customer base. Moreover, you can utilize social media advertising, content marketing tools showcasing your vendors’ products, and partnerships to reach the correct audience.
• Reward your loyal customers with various loyalty programs. Ship Turtle allows you to integrate loyalty programs like discounts, offers, points, and other exclusive benefits. 
• Create ways to build a community through social groups, customized blog segments, and through forums that advocate trust and loyalty towards the brand. 

VII. Your marketplace models should have cross-selling & upselling modules

• To increase the profitability of the store on the online marketplace, you should tap the cross-selling feature & upselling features. Studies have shown great success in stores for companies that actively do cross-selling & up-selling marketing techniques. 
• The average order value should increase to have a cross-selling strategy that is profitable. Cross-selling will automatically increase your overall order value or sales figure for sure. 
• Place ads on cross-pages on the marketplace, recommend higher-rated products to users, target consumers based on purchase history, and encourage them to make a purchase. 

VIII. Build a successful marketplace with referral programs

• This is a great hack for your marketplace. Launch a referral program that rewards the users for referring new leads to your marketplace. This emotionally connects the buyers and sellers. 
• Gift both the referrer and the referee with customized discounts, credits, or other perks to stimulate marketing and user acquisition. With this, you build your consumer base and keep them emotionally attached to your business in the marketplace. 

IX. Build a marketplace platform with attractive incentives 

• Your marketplace cannot just look like a boring products-listed page. It should feel appealing and attractive to consumers on various fronts. 
• Ensure you keep offering incentives like discounts, coupon codes, or cashback rewards to encourage users to make purchases on your marketplace. 
• Seasonal discounts, limited-time promotions, and mega deals can create a sense of buying urgency and drive your sales figures. Keep your online marketplace idea open and adopting. 

X. Create a marketplace from scratch with core modules

Developing a marketplace from scratch with core modules isn’t necessarily a “hack” for profitability but a more traditional and resource-intensive approach. However, there can be some advantages to building from scratch:

• Customization: You have complete control over the functionality and design of your marketplace. This can be beneficial if you have a very specific vision that can’t be achieved with a pre-built solution.
• Scalability: A custom-built solution can potentially scale better to accommodate a massive user base and complex business needs down the line. However, this requires significant upfront investment and ongoing maintenance.

The hack here is reinventing the wheel with existing solutions like Shipturtle. This Shopify app offers pre-built functionality for 40+ marketplace core modules. This saves you time and cost to build a marketplace website, allowing you to focus on what truly matters: attracting vendors, building a customer base, and perfecting your marketplace’s unique selling proposition (USP) –

• Utilize Shipturtle’s built-in features for product listings, vendor management, payment processing, and user accounts. This frees you up to focus on the more strategic aspects of building a profitable marketplace.
• While Shipturtle provides the foundation, your focus should be on what makes your marketplace unique. This could be a specific niche market, a curated selection of high-quality products, or a focus on exceptional customer service.

XI. Build trust with consistent branding 

• Remember, customization is the key to a profitable marketplace. No one will tell you this hack. Ensure consistent brand presence across Vendor registration, login, vendor micro-stores, shipment tracking, other page alterations, etc. within the Shopify ecosystem using the Ship Turtle marketplace creator app. 
• Within the app or the website, your brand has full credibility in and out with a white-labeled Seller Panel compatible with the website design. It improves brand identity and ensures various stakeholders transact without doubt and with legitimacy. 

XII. Monetize your marketplace and reap better rewards

You can choose from several monetization options:

• Commissions: The bread and butter of most marketplaces. Charge a percentage of each sale made on your platform. Shipturtle allows you to easily set commission rates that are fair to both you and your vendors.
• Subscription Fees: Offer optional subscription plans with premium benefits. This could include premium listing placement, access to data analytics, or additional features for vendors who want to maximize their sales potential.
• Featured Listings: Give vendors the option to pay a fee to have their products displayed prominently on your marketplace. This is a great way to generate additional revenue and give some vendors a competitive edge.

Are you looking to make your business a profitable one? Go check out the Shipturtle one-stop marketplace solution. It is easy, smooth, and loaded with a host of marketing features. 

Benefits of Having an Online Marketplace

Apart from these hacks, it is essential to know the benefits of creating your marketplace website, and the things your brands will get and experience from a marketplace. Let us see now. 

1. Automate your online marketplace operations

• Doing business online is more flexible to automation than doing business offline.
• You have complete control of your products, their prices, orders taken, delivery logistics, data analytics, and more. 
• Automation has made online marketplace so much easier for both vendors and buyers.
• You can focus on the product rather than the daily operations of your business. 

2. Marketplace businesses are free from inventory controls

When you are operating a dropshipping business, you don’t need to worry about the inventories, unlike the physical store. You just need to maintain a good relationship with vendors to provide supplies whenever needed, this saves you from worries of inventory management. 

3. The marketplace business model offers better analytics

• Physical stores offer a limited scope of generating crucial consumer shopping behavior data. 
• With the type of consumer data generated through online marketplaces, businesses can make informed decisions based on products, user activity, sale analytics, product visibility, and a lot more. With this data, you can make sure your marketplace has the best sales figures. 
• For example, if you’re running a search ad campaign, the only way to tell if it is successful or not is by collecting the data and analyzing it. The data will offer you insights on time spent on the page, number of clicks made, website navigation entire traffic source, etc. 
• With this crucial consumer information, you can determine which marketing tools are most effective, and which product is more in demand by consumers but are not making the purchases. These benefits are only available when you start an online marketplace. 

4. Creating an online marketplace gives you higher revenue margins

• According to the findings of recent research, more than 55% of enterprises that sell online make a profit margin of more than 20-25%. 
• There is a higher probability that more clients will buy your products as a result of the increased reach provided by an online marketplace, helping you achieve higher profit margins than offline stores. 

Why is ShipTurtle Marketplace Software Best in The Market 

Let us quickly check out the top marketplace features offered by ShipTurtle. This is by far the best builder software to grow your marketplace: 

• Offers one-stop solution on Shopify for various B2B, B2C, and C2C business model offerings.
• From vendor management to product listing to sales and order fulfillment, Shipturtle leaves no stone unturned when it comes to feature-loaded functionality in the marketplace for your brand’s success. Read in detail here. 
• We offer the facility to manage and list products and inventories, helping to create a marketplace website with multiple sellers in just about two days. 
• Shipturtle is the leader in Shopify shipping integration modules. It seamlessly promotes your marketplace and connects with over 200 global partners, providing a shipping solution that reaches beyond just label generation.
• Shipturtle covers the full range of shipping operations that include Rate API, pickup scheduling, tracking updates, and returns. It offers flexible integration options. 
• Shipturtle’s Advanced Shipping Profiles revolutionize shipping cost calculations by enabling vendor-specific rules. Instead of a single shipping charge for all items, costs are calculated separately for each vendor at checkout, providing transparency and accuracy. This scalable solution is essential for growing the Shopify marketplace platform, removing significant shipping expenses efficiently. 

Shipturtle Marketplace App vs Other Marketplace Platform Builders

Ensuring your marketplace brand is profitable also requires knowing which e-commerce software is offering the best value and features in terms of end-to-end online business operations. Here’s our comparison list for you to consider:

FEATURES	SHIPTURTLE	WEBKUL	SHARETRIBE
Product Marketplace	Yes	No, it only offers in the premium plans	No, it does not support product marketplaces like Amazon-type
Rental and services marketplace	Yes	Yes	Yes
Deep Shopify integration	Yes	No	No
Marketplace set up	It can take up to 48 hours	It can take anywhere between 1 to 2 weeks	It can take anywhere between 1 to 2 weeks
White Label	It gives a complete white-label element for your store	It does not offer entire white-label elements	It gives a complete white-label element for your store
Checkout customization	Yes, it integrates, shipping information, rates, and more	No.	Yes, it integrates, shipping information, rates, and more
Shipping and pickup services	Yes, it supports shipping and pickup services	No, it does not support shipping and pickup services	No, it does not support shipping and pickup services
Order Automation	Yes, automates, inventory, vendor details	No, it does not offer automation	No, it does not offer automation
Invoicing	Yes, offer marketplace-to-customer or vendor-to-customer invoicing options	It only has limited invoicing options	It does not offer invoicing options
WhatApp integration on the platform	Yes, share notifications through WhatsApp	Yes, share notifications through WhatsApp	No, it does not offer WhatsApp integration
Product templates	Yes, fixed template option with GPT integration	No, it does not offer any product template options	No, it does not offer any product template options
Marketplace mobile app support options	Yes, user interface (UI) and user experience (UX) are designed for marketplace mobile apps that vary as per OS interface	No, does not support mobile UI and UX	Yes, user interface (UI) and user experience (UX) are designed for marketplace mobile apps that vary as per OS interface
Traceability and change logs	Yes, it offers detailed change logs to track consumer activity in the marketplace	No, it does not offer traceability and change logs	No, it does not offer traceability and change logs
Subscriptions products	Yes, it offers weekly orders of grocery items	No, it does not offer any subscription products	No, it does not offer any subscription products

Read more detailed comparisons here.

Final Words

So to sum up, we can see that launching an online marketplace can be a profitable business than investing in a traditional brick-and-mortar store. Furthermore, we have pointed out the hacks to make your online marketplace profitable and also given wholesome marketplace benefits. Remember many stages of the marketplace need continuous considerations. 

Moreover, having a marketplace idea for your business is a wonderful idea. The marketplace website development or software has a lot of features and automation to make your business successful and profitable. We have also given a detailed table of comparison for different marketplace platforms offered by different companies. Entirely, a marketplace is a perfect place to reach millions of audience irrespective of their locations and a lot more.