Creating an online marketplace is a profitable business that is convenient for both sellers and users. Despite the increased competition, it is worth using in any niche, especially keeping in mind that the number of online shoppers in 2021 alone amounted to 2.14 billion people. But to understand how competitive and interesting your idea is for an audience, you should start by choosing experienced developers for your MVP. But what is it, why do you need it, and how can you create it? Read on to find out.
What Is an MVP?
MVP, short for “minimum viable product,” is the initial version of any product, prepared to demonstrate and attract its first users. It thus has primitive functionality.
Creating an MVP allows you to:
- Assess the interest of your target audience in the product
- Check which features are useful and which are not
- Create a database of potential customers interested in the product
- Find out if there are problems or serious errors in the product’s operation
An MVP allows you to significantly save time and money on product development. To test the viability of a project, you just need to provide users with a basic set of functions. Thus, as early as the first stages, you will be able to understand whether the idea is worth further development or not.
Why Do You Need an MVP?
Each time your company has a product concept, you should not immediately start developing a full-featured product. That will consume a lot of resources, time, and finances, and the result may not meet your expectations or you may find that the idea is no longer interesting to your target audience. It is best to implement the idea in the form of an MVP and here’s why:
- Proof of concept: Some features and ideas may not be viable, and it is better to find that out in the earliest stages of implementation.
- Time savings: MVP development will take 1–3 months only.
- Budget savings: The minimum life product is cheaper, and the extra money can be spent on a good marketing campaign.
- Attracting an audience: Allows you to find interested users and gain their loyalty.
- Making a profit: An MVP is an excellent base for finding investors.
Now, let’s talk about how to create an online marketplace MVP.
How to Create an Online Marketplace MVP
There are five steps in creating an MVP. Here they are if you’re on your way to establishing an online marketplace MVP.
1. Analyze the Market and Your Competitors
Even if you think you created an innovative idea that has no analogs in the world, study the market. Perhaps you are wrong. Maybe your concept will not be interesting to users. Perhaps your target audience only resides in one country far from you, which will prevent the full-scale implementation of the project. All these considerations are important because about 35% of startups fail only because they are not needed in the market.
Also, pay attention to the market itself and your niche competitors. Assess how many companies already offer a similar product, evaluate their positive and negative qualities, collect as much information as possible about their activities, and know the demographic characteristics of your target audience.
What should you pay attention to when analyzing the online market?
- Volume of suppliers and buyers: The more people there are in a niche, the better for you. When the niche is too narrow, there is a very small chance that vendors will want to work with your platform.
- Frequency of purchases and price segmentation: Pay attention to these details since they will help you come up with the correct analysis. For example, a successful marketplace can be considered a place where there is low purchase frequency of high-priced goods. An example is the car market. Or it could be a market with a high purchase frequency of low-priced goods like food, clothes, and the like.
To study the competition in great detail, you need to go inside it. Therefore, if you don’t have enough knowledge or experience, contact and consult with an expert. That could be a developer who specializes in marketplaces or a marketer. Think about where you feel gaps to fill them.
2. Find Online Marketplace Launch Cases in Your Niche
One of the most important things to consider when creating a product is correct implementation. Learn all the bad, good, and ideal concepts of starting an online marketplace. But you should not just take and copy the entire strategy of another successful company, even if you have the same target audience and product. At the minimum, you can be convicted of dishonest appropriation of someone else’s concept. Besides, it may cause your release to fail. Build a composite image and integrate your launch.
Study the bad experiences of companies to avoid doing the same thing. Thanks to their experience, many companies have successfully launched their online marketplaces. We are confident that with the right analysis of competitor victories and failures, you can also get excellent results.
3. Create a Diagram of User Interaction with the Product
A user flow reflects how users interact with your product and the journey they take from opening the platform to making a purchase. To ensure smooth and convenient interactions, you should map out the entire path. It should be convenient for both buyers and sellers. Think about each step in detail so there won’t be issues.
You can use user and business expectations to make it easier to navigate. Ask these questions:
- What does the seller expect?
- Get a lot of customers and be the first in the market
- Minimal marketing costs
- Additional channels for business promotion
- What does the client expect?
- A wide range of goods or services in one place
- Simplicity and accuracy in transactions
- User-friendly interface that is easy to navigate and convenient
- Personalized offers in the form of discounts, coupons, and other offers
To get the desired result, it is important to combine these expectations to form a whole strategy to ensure success.
4. Develop and Launch an MVP
Now, what remains is to develop and launch the MVP. Don’t strive for perfection, it is enough to produce a convenient and useful product that will attract user attention.
The main goal is to choose good developers, who will make a quality MVP. It is better to look for a readily available outsourcer with a lot of experience. That minimizes costs for office rent, equipment, taxes, and other operational expenses.
Also, you are more likely to find professionals who have experienced developing an online marketplace. To make the right choice, you need to understand at least what is at stake.
Options for Creating an MVP
- Development from scratch: In this case, it is possible to get the most unique version of the product. Design, interface, and functionality—all of these will be done by the developer in a single version. This method is suitable for financially secure businesses with an innovative product that requires a special approach.
- Using ready-made solutions or templates: Templates are a great option for those who want to get good results with minimal investment.
- Using software-as-a-service (SaaS) solutions: With this method, you will use a template that you may not be able to customize in terms of interface and design. It is the cheapest and easiest way to get started with a minimal budget.
It’s up to you to choose the method that suits your financial capabilities and ideas.
5. Analyze First Wins
As soon as you launch the MVP online marketplace, the main work begins. It is important to conduct as many tests as possible and collect as much feedback and analytical data as possible to build an optimal strategy for a fully functional product.
Getting good results is recommended to scale the project. True, this must be done carefully and slowly, considering each step. That will help to test the product further with minimal risk and fewer future growth problems.
Creating an online marketplace is easy but running it is a different matter. Why? While there are several tools and opportunities for developing them, competition is fierce and user interests rapidly change. As such, there is a possibility that you may develop a nonviable product. To eliminate this “chance”, start by introducing an MVP to avoid committing strategic mistakes and allow you to implement concepts correctly.