At its very core, a marketplace is in the business of handshakes it makes it easy for buyers and sellers to find each other, discuss the details of their transaction, and if they come to common terms, shake hands with each other. The marketplace was probably born with civilization itself, and since then, has had many avatars, ranging from the tribal and rural haats to semi-urban markets to urban supermarkets, and now, to digital marketplaces. But the basic principals haven't changed irrespective of the avatar, when you are setting up a marketplace; you want to make it easy for people to go there, to find each other, and to transact with each other. And if you do a good job of it, you benefit from it too. And the more the number of buyers you've got, the more the sellers you get, which further attracts more buyers. It's a winner-take-all game, setting up marketplaces.
If you were to distill what goes into building a successful marketplace, there are three basic steps to it:
1) Attract: It is very important to ensure that people can find you easily and come back to you more and more often. While over time, the biggest source of this should be word-of-mouth, initially this might need to be supported by marketing. After that, it is up to your marketplace if people like it, they will come back to you again, otherwise, you will find yourself marketing again to get the same user to your website again, only to lose him all over again.
2) Engage: Once users come to your marketplace, you need get them to interact with each other. In our case, that happens by people posting ads or replying to others' ads. And I'll let you in on the secret to achieving more and more of thisâ the secret is that there is no secret. You just need to stick to the basics and do them well you need to make it very easy for people to post ads and as easy for others to find those ads and respond to them.
3) Deliver value: And ultimately, you need to get it done for the user. You need to stay honest to your promise of your platform and get the user's transaction done in case of horizontally positioned platforms, this promise is to help the users buy/sell/rent/find anything they want in a simple, clean, quick way, whereas the verticals focus on providing a rich, deep category-specific experience while still aiming to get your transaction done.
Ultimately, if you do the right thing for your users, you will have a successful business â and in a market like India, a successful and very large business. So the key is to keep listening to your users and help them "get it done". If you have users, you have a marketplace. It is never the other way.
