53% of adults in the United States reportedly begin their search for a product by going on Amazon.
Indeed, online marketplaces have changed the way we do things.
The COVID-19 pandemic only spurred on this disruption as more people turned to digital-first consumerism, broke brand loyalty, and sought more personalized experiences.
The B2C e-commerce industry will reap these rewards, generating a projected 3.5 trillion dollars in sales by 2024.
Most of these profits will undoubtedly go to the e-commerce giants that reign supreme from China to the US.
That being said, how do you attract sellers to your online marketplace?
Offer Sellers an Offer They Can't Ignore On Your Website
First, let's discuss why it's essential to work on attracting sellers to your marketplace website instead of immediately gunning for buyers or customers.
According to a Harvard Business School professor, "If you get the right suppliers, the customers will experience high-quality service and then do the marketing for you."
Airbnb did not just choose the suitable suppliers for their platform; they helped transform them into suitable hosts.
Airbnb visited property owners' homes with professional photographers to take great pictures of the rentals and saw their monthly revenues double.
It was so successful that the platform incorporated professional photography for every new listing.
Over time, this has resulted in an annual revenue increase of more than $2400 per unit.
Although they don't feature sellers, Tinder's CMO similarly made an enticing offer to the app's very first set of users.
She traveled and visited different chapters of her sorority, presented, and asked the girls to download the app.
Then, she went to chapters of their brother fraternity and showed the guys the girls from the sororities who had downloaded the app.
The tactic proved to be so effective that by the time she came back from her trip, the number of Tinder users tripled from 5,000 to 15,000.
Uber similarly went all out in recruiting their very first drivers.
Founder Travis Kalanick cold-called black car drivers and asked them to try out the platform for an hourly rate.
Only three of the ten he called agreed.
But it was enough; since then, Uber has grown to have a market cap of $47.10 billion.
While many (or all) of these strategies weren't scalable, they exhibited one crucial aspect of successfully attracting sellers or users to their platforms: making it hard for them to say no.
The correct value proposition can assist in bringing in sellers.
Your value proposition is a concise representation of what your business offers.
About 65% of businesses have established value propositions, but less than 3% of them have compelling value propositions.
One famous example of how it's done right is Uber's "tap the app, get a ride."
Uber then explains why it's "the smartest way to get around."
So in creating your value proposition, focus first on writing a clear and compelling headline.
Follow it up by justifying your bold take through a sub-headline or some bulleted points.
Finally, make it visually appealing.
Another way to make your online marketplace irresistible to sellers is to work your unique selling proposition.
Your USP (unique selling proposition), is a distinct advantage that your platform offers -- that others cannot.
Amazon's is "anything, anywhere, anytime," a difficult proposition for competitors to follow.
To find your USP and successfully position it to attract sellers, a good place to start is to put yourself in a seller's shoes and ask, "What's in it for me?"
List the specific benefits and features that your platform offers. Identify those unique to your marketplace -- and are not or cannot be replicated by your competitors.
Meet Marketplace Sellers Where They Are
Another effective way to generate interest from sellers is to find them where they are.
This is what Etsy did.
In the first days of their launch, their founders scoured through art fairs all over the United States to pitch their platform to the best vendors.
Today, Etsy has 7.5 million active sellers, raking in a revenue of 2.3 billion dollars.
Airbnb also spent extra effort finding their first hosts, although they did it in an arguably less ethical way.
Knowing that rental listing owners would be found on Craigslist, their founders created software to hack the contact information of property owners on the platform, then sent them an invite to their website.
Questionable or not, it worked.
Suppose you can't travel the country to find sellers or hack into a database to get their email addresses. In that case, you can nevertheless join online forums or groups where people of similar interests gather.
Facebook Groups, for example, are an excellent venue for finding your first sellers.
More than 1.8 billion people use them monthly, and community- or city-based groups engender the most sense of belonging, which might make them receptive to your pitch.
Additionally, you can leverage marketing on social media.
Short-form videos, in particular, are considered by 85% of businesses to be the most effective marketing content in 2021.
Time Your Marketplace Launch to Coincide with Other Events
Know when to launch!
Timing accounts for 42% of success across 200+ businesses, making it an essential element to pin down.
According to Entrepreneur.com, two essential factors to consider when you're ready.
First: is your business idea in demand currently?
In 2021, Shopify says that among the most profitable business ideas were handmade products, thrift clothes, print-on-demand services, and drop shipping.
Now your online marketplace does not need to deal in any of these, but the lesson still applies: your market should be ready for what you're going to offer to find interested sellers and, from there, people who want to buy.
Another factor to consider is whether you can positively contribute to meeting or addressing change in business demand.
Jack Ma, the founder of Alibaba, initially laid out the groundwork for what would become a 165-billion dollar company when he noticed a lack of Chinese businesses engaged in e-commerce.
Soon after, he pooled investments from other tech pioneers to launch a website for Chinese businesses -- and was rewarded by more investments from other Chinese people in the industry who appreciated what he was trying to do.
Today, Alibaba enjoys 69% of domestic e-commerce retail revenues and is projected to reach 3.62 trillion dollars in e-commerce sales by 2025.
In the case of software, is your software ready to be launched?
It doesn't mean it has to be perfect, as you can make iterations as you go along, but it needs to be correctly working for it to have a chance.
An article in the Harvard Business Review notes that the biggest reason why a product launch fails is the failure to market too late.
Also, think about your sales cycles; when does your audience seem to need the product the most? Or when would they best benefit from it?
Tuesday is the best day of the week for launching a product; if you decide to embark on a Tuesday, make sure it's not after a major holiday.
Want to learn more about marketplaces? Start with a free trial, and get to know the Yclas marketplace platform.