Two in five Americans want to start a business in 2022. That's according to a survey commissioned by Digital.com, an independent review website dedicated to small business tools and resources.
When launched, these new entrepreneurs will join a global community of 582 million business owners.
And this number is only expected to rise, particularly in the wake of the COVID-19 pandemic. In the US, for example, there has been a 95% increase in applications for new businesses.
QuickBooks also predicts there will be 17 million more people who will start a new business this year.
Starting a marketplace website can help you benefit from the untapped potential of e-commerce and changing consumer behavior, especially after the COVID-19 pandemic.
According to Statista, retail spending all over the world amounted to 4.9 trillion dollars.
According to Statista, retail spending all over the world amounted to 4.9 trillion dollars.
This is expected to go up to almost 7.5 trillion dollars by 2025. Similarly, McKinsey has noted that Americans, in particular, are in the mood to spend.
Analyzing data from longitudinal surveys and third-party sources of information, they found that about 51% of consumers say that they intend to splurge post-pandemic; college students and high-income millennials, specifically, will be looking to snatch up footwear and apparel, as well as travel and experiences.
And Americans aren't the only people buying online. Statista says that there are 2.14 billion active online shoppers all over the world.
Statista says that there are 2.14 billion active online shoppers all over the world.
China, in particular, has logged around 2.8 trillion dollars worth of e-commerce sales in the last year. The Asia-Pacific region is yet another ready market, which consumes about half of all retail sales.
Additionally, North America and Europe are ready to buy; these two regions comprised 20 and 16 percent of retail sales in the world in the same year, respectively.
Trends forecast that this new way of shopping will continue as we move to a digital future.
According to McKinsey, 92% of consumers who tried buying things online embraced it, resulting in an almost 20% increase in credit and debit card spending.
An Online Marketplace is an Effective and Scalable Business Model
A marketplace website also comes with a strong value proposition that makes it an effective and scalable business model for small businesses. Research by Bloomforth says that over 50% of businesses that sell their products or goods on online marketplaces see more than 20% profit margins.
This isn't limited to established retailers, who see year-over-year profits in 2020 of over 7%.
Even small and medium-sized retailers can cash in on online revenues of between 1 to 3 million dollars, a 10% increase from the previous year.
In addition, a marketplace website can generate a lot of visits. In February 2022 alone, for example, Amazon had over 2.2 billion visits from both desktops and mobile devices.
Retailers selling books, music, and video get the most share of these visits at around 69%; a close second is snatched by those selling computers and consumer electronics.
How can I scale?
Today, there are many technologies designed to help a marketplace platform continually adapt to changing conditions and needs.
The first advantage is having little to no inventory. You don’t need to pay for any storage space or worry about your supply chains.
You Control How You Earn in an Online Marketplace
When choosing your specific type of marketplace website, you also control how you can earn. There are at least five popular ways of earning revenue from an online marketplace.
Earn Money Through Commissions
In this revenue system, you get a certain percentage every time a transaction is completed on your website; if a product gets sold, you can charge either the seller, the buyer, or both. This is how popular marketplaces like Amazon, Airbnb, and Fiverr earn.
Earn Money Through Listing Charges
In such a model, you charge your users every time you post their listing on your website. This model works for more niche-specific marketplaces like Etsy or those that offer a unique selling proposition to sellers or buyers.
Etsy, for example, has a very specific target audience. If someone is looking for a handcrafted antique piece, every listing for that category will be charged a certain fee as long as they meet the exact requirements.
Earn Money Through Subscriptions
Like Yclas subscriptions, users will pay for access to the platform. With that said, it's necessary that they will get great value for staying subscribed to a marketplace website, like if they will have access to a diverse pool of buyers upon signing up.
This model is what Couchsurfing.com uses, as well as dating sites like OKCupid use.
Earn Money Through Advertising or Sponsored Listings
When a user pays, their listing will get special prominence on the platform. Zillow and Haatori are some examples of marketplaces that use advertising and featured listings to generate revenue.
Earn Money Through "Freemium"
As its name denotes, the freemium model offers free and paid platform access. Some features are free, while others that offer more value will be charged.
One example of a website that uses this type of revenue stream is Craiglist. For the most part, posting on this website is free, but if you want to post job listings, it'll fetch anywhere between $10 and $75.
Craigslist can also charge for furniture, cars/trucks, commercial real estate, and apartment rental listings.
Use Your Online Marketplace to Support Your Local Community
Launching a marketplace website can also help you support your local economy. According to Yelp's Local Economic Impact Report, the COVID-19 pandemic closed down more than 160,000 businesses in the US by the end of August, 2020.
And almost 100,000 or 60% of them are now permanently closed. At the beginning of this year, Statista said that the situation had not been fully resolved yet.
In fact, in a January survey, they found that around 22% of small businesses in the US said that the pandemic negatively affected them. This isn't limited to the US; in the Philippine capital, for example, the trade and industry department noted that almost 10% of businesses remained closed in November 2021.
Small and medium-sized businesses can help revitalize economic conditions, and a marketplace website is a nexus to bring them and buyers together.
This is what the online storefront Nearby envisions.
Piloting a program called Keep Oakland Alive, founder April Underwood featured 40 small local businesses so people can find services that they need without having to search elsewhere. Now, the platform is expanding nationally into Austin and Charleston.
The same thing is being done by Garmentory, a marketplace for indie fashion boutiques. Taking a small commission off each sale, the platform brings together hundreds of boutique partners, many of which can't successfully close even 1% of sales on their own websites.
By launching your own marketplace website, you don’t just get the chance to work on your dreams; you also make it possible for others in your community to reach theirs.
Yclas Summary
It’s not difficult to launch your own online marketplace. Yclas offers handy guides to get you started, even if you have no prior coding experience or don’t have the budget for a full-on IT team.
You get access to a turnkey solution that includes hosting and professional support. You can also use your own domain and try our Cloud solution for free. Yclas also offers a comprehensive suite of features to help you launch your online marketplace in a day.
We have various payment gateways for your website, mobile-ready and native apps, curated designs that you can customize, and full access to advanced management solutions.
But don’t just take our word for it; give it a try.
