We are living in the Digital Age which provides extraordinary opportunities for people who have the right expertise, skills and mindsets because they will transform their organizations and disrupt industries using new business models enabled by a wave of digital technologies. E-commerce Marketplace is one of them. Talking about Marketplace, we are used to think about Amazon, Alibaba, 1688, Shopee,… We all know this businessmodel has huge potential and can generate substantial return on your investment. But first, we need to conquer it step by step by understanding what trouble we have to face to when building a marketplace, especially with Magento, one of the best E-commerce platforms.

1, Spend a lot of money and time.

Money and time

You have to spend a lot of money on setting up payment systems, buying extensions, domain names, servers and many other things to be able to make a complete sales website. In addition, Magento is a complex platform, difficult to use, add products or customize functions especially for beginners. Definitely, you will need more time spend on learning and getting used to it than other platforms.

At CMSmart, understanding the customer’s difficulty, we provide a full solution calls Marketplace theme for Magento 2 packages. This package is absolutely perfect for people who want to build a website like Ebay, Lazada, Amazone... with an unique interface, the advanced marketplace features, CRM and powerful admin management even if you are a beginner.

2, How to attract sellers and buyers


Due to their busy schedule, People always prefer to visit a store with variable kind of good to save their time for shopping. So, you will need as much sellers to bring their goods or services to your marketplace as possible, which they won’t do unless you can prove to them you have a lot of buyers. If you can attract a lot of buyers but only have few sellers, the buyers leave, and if there are no buyers, the sellers go away. Getting the initial balance of buyers and sellers is the important key to establish and grow an online marketplace. Once you have enough sellers, your buyers will start to expand their interest beyond an initial purchase, more sellers become motivated to bring their goods to your marketplace, and you start to develop the coveted network effect that feeds a high growth period in the business.

3, Buyers and sellers have conflicting interests

Buyer and seller

Naturally, buyers want great products with great price at the same time. Also, sellers want to maximize their profit, so they aren't incented to sell their goods or services cheaply. In an established marketplace, prices will regulate to a “market rate” due to the principles of supply and demand. However, in a small or nascent marketplace, there is insufficient demand to establish market rates, meaning goods can be overpriced sufficiently to dissuade buyers from purchasing and then take their business elsewhere.

In a large marketplace, there are many sellers selling similar products, placing pressure on sellers to price their products lower. This, in turn, hurts their profitability and impacts their desire to participate in the marketplace. Eventually, higher-margin (often equating to higher quality) sellers will drop out of the marketplace, leaving behind a marketplace with high levels of competition for very similar goods.

Large marketplaces are great for buyers but really bad for sellers. Although sellers are exposed to many more buyers, they get squeezed on price. If they can’t make up their profits on volume, they will leave the marketplace and looking for better yielding sales channels.

In short, too few sellers can lead to incorrect pricing causing buyers to leave the platform, whereas too many sellers can reduce profitability to the point that sellers leave the platform.

4, There are Other Options

many way to go

Both sellers and buyers will join other marketplaces to do businesses if yours does not have an unique inventory or provides service levels above and beyond their competition. Remember that they always have more than just one option.

You can see all the airlines and hotels sell their products and services in multiple sales channels. As long as they can sell unsold seats or room on any one of these sites, they will spread their business across all profitable options.

Sites that provide additional service levels create customer loyalty, a requirement for a marketplace to continue to thrive and scale. Customer delighters ensure marketplace's reputation. For example, buyers often prefer to purchase from Amazon than other online marketplaces because of their excellence in delivery of goods and customer service.

Despite the issues listed, a marketplace, once it becomes successful, it is difficult to disrupt. Sellers will always want find marketplaces that their goods or services will be available to the largest potential buyer audience, and buyers will find one that they find any goods they are seeking. Volume attracts volume. Stalwart marketplaces such as Craigslist and eBay continue to thrive despite their user interfaces being firmly rooted in the 90s.

Best regards. Have a nice day!

Sales Consultant Manager

Skype: live:vincent_4281
Phone/ whatsapp: +84 355 993 306
Email: vincent@cmsmart.net