Online Marketplace Marketing: 10 Tips for a Successful Marketing Strategy for Online Marketplaces

Marketing for your own online marketplace is a complicated task that poses specific challenges for marketplace operators. The success of a two-sided online marketplace, compared to an online shop, depends on the presence of two target groups – buyers and sellers. Especially attracting the second target group is the primary, most important, and most difficult task for any online marketplace, with the majority of marketplaces failing in this regard.

The success of online marketplaces such as Airbnb, Etsy, and eBay proves that the model of the online marketplace has tremendous growth potential. In addition, it can be easily applied to a wide variety of business sectors. But what is the reason for the success of these marketplaces? We will explore this topic in the following article.

The Essentials at a Glance

Which Online Marketplace Would You Like to Create?

Online Marketplace Marketing: 10 Tips

When marketing an online marketplace, the primary goal is to achieve the critical mass – that is, the balance between demand and supply. This can be achieved through online marketing activities such as SEO, content marketing, and advertising, as well as through special actions for the initial users.

The challenges for startups when launching an online marketplace are even more delicate than those encountered by conventional online marketplace models. Such startups do not have a fixed target audience to approach as investors. Instead, they must excel with qualities such as strong oversight, high quality, or performance. In addition, they must gain the trust of investors while maintaining their good reputation so that financial transactions on the marketplace can take place.

1. Achieving the “Critical Mass”

As we have reported in our other articles on the development of online marketplaces, the first requirement for marketplace operators is to achieve the “critical mass” – that is, to ensure a sufficient number of buyers and sellers.

In this process, sellers should be the prioritized target group. As a marketplace operator, you should provide attractive incentives for potential sellers so that participation in the marketplace appears lucrative to them.

An online marketplace relies on the trust of both sellers and buyers – if your marketplace does not have a trustworthy image, the general public will always choose a well-known alternative. This also includes establishing your own brand, which is another challenging task for a new online marketplace. Think of Amazon and eBay – because they are used by millions of people worldwide, everyone knows that these marketplaces offer high security in terms of payments and product quality. However, that was not the case in the first months or even years after their launch – the road to their current state was long and uneven.

1.1. Focus on the First Sellers

Recruiting the first sellers and convincing them to offer their products and services on your own online marketplace is perhaps the most challenging task as an operator of this platform.

Ensure that you offer a clear value proposition for both sellers and buyers. Here are some highly useful steps in marketing, such as uploading images to the marketplace to make it more attractive for both wholesalers and sellers:

1.2. Develop a Target Audience to Spark Interest from the Business Sector or a Region

Anyone who wants to create an online marketplace initially tries to copy Amazon as a success model and launch as big as the market leader. However, instead of getting lost in an initially uncontrollable scale, the operator should rather focus on a small niche that they can build and shape according to their own ideas and expertise. Although this may not attract masses of visitors at first, it does ensure the presence of the target audience. With growing experience and an expanding customer base, scaling up naturally occurs with good service and quality. This model also conserves the operator’s resources of time and money, which are certainly not unlimited.

A marketplace that positions itself in a niche generally has higher chances of success. The online marketplace Reverb has focused solely on the sale of musical instruments and other accessories for musicians, and therefore does not have to compete directly with the giant market leaders.

Do you want to sell fashion and clothing on an online marketplace? Then it’s better to focus on a niche such as women’s clothing, or even better, women’s fitness clothing. Or do you want to take on the competition head-on? Then initially focus on an inner-city service instead of trying to offer your service across the entire country. Or offer your service exclusively with electric cars. The more specialized an online offering is, the more assured the operator can be of reaching the appropriate target audience. Additionally, they can concentrate on the advantages and eliminate the disadvantages before expanding further.

1.3. Help Your Sellers Communicate

A handbag manufacturer, a person with a guest room in their house, an engineer with a new invention – all these people share a classic problem: marketing. They are likely excellent at designing handbags, but they all need help reaching the right consumers who are willing to pay for their products and services. Your marketplace must address this primary problem for all these sellers.

1.4. Attraction for Your Sellers

Next comes the truly important moment: attracting users and more traffic to your marketplace. It may take a while for word-of-mouth to catch on. That is why proper marketing is so crucial for an online marketplace. Additionally, other network effects can also drive more traffic to your marketplace.

1.5. Creating a Sense of Trust

If your online marketplace offers physical goods, you must be able to ensure storage, packaging, and delivery to the customer. At the same time, there is the issue—especially in the initial phase of marketing your online marketplace—that your potential customers may not yet feel secure with your platform. Use quality seals and positive customer reviews to establish a sense of security among your clientele.

You should also continue to highlight the benefits for both user groups, as well as allow for rating functions and comments. Take Airbnb as an example, which facilitates the rental of apartments for both providers and travelers. This activates the effects of word-of-mouth marketing, which have a particularly significant influence on customer decisions.

With a creative video, eBay demonstrates the advantages of the online marketplace and auction platform for both buyers and sellers. Video marketing is a relatively simple and effective way to promote your marketplace.

2. Publications

When a new online marketplace starts small, it should never underestimate the high expectations that visitors have for the platform. Therefore, good quality control of listings is essential – for many users, the reputation of an online marketplace often depends precisely on the management of its publications.

3. Strengthen Existing Channels

One should never underestimate the existence of other communities and groups on other social media platforms. Such groups and communities can be a great place for you to generate a strong group of enthusiastic buyers and sellers.

More than 450 million people already visit groups on Facebook to buy or sell their items every month. Use such groups to draw attention to your marketplace.

To meet the needs of a growing user base, Facebook launched its own marketplace in the fall of 2016. In addition to Facebook, there are other social media channels that exhibit a strong network effect for peer-to-peer marketplace entrepreneurs. Savvy online marketplace operators can leverage this influence to their advantage and for growth, allowing them to expand early on.

Developing an Online Marketplace

4. Viral Marketing

Viral marketing means promoting the growth of a website, for example, through targeted social media marketing, to generate new customers. It is also effective when every customer refers another customer (so-called “referral marketing” through an affiliate program), which is well received with the right incentives. Such an approach can save a lot of expensive marketing costs.

A marketplace that goes viral has considerable potential for success – many online marketplaces and platforms like Airbnb owe their traffic to viral marketing.

5. Search Engine Optimization (SEO)

Search engine optimization (SEO) is a recognized method to influence your ranking on Google and other search engines in your favor. Instead of actively seeking out potential customers, you make it easier by being found by new customers through search engines who are looking for the products or services on your marketplace. For an online marketplace, the majority of the SEO work falls on the shoulders of the operators.

In addition to optimizing for search engines, the ranking is also influenced by content – that is, the quality of the existing text and the value of the information. Good content leads to a good ranking. Furthermore, qualitative content will earn organic backlinks, which strengthens the authority of your domain and is currently the most important SEO variable.

Additionally, you must give your sellers the opportunity to include detailed product descriptions. These product descriptions, just like in an online shop, will contain many important keywords that further strengthen your online marketplace’s rankings. From a usability perspective, product descriptions are also very important, as they provide valuable information to your customers that can influence their purchase decisions.

Also, do not forget to categorize your products into categories and subcategories – this makes it easier for search engines to crawl and list your individual pages.

6. Content Marketing

As we discussed in the previous chapter, content marketing is an excellent way to build your initial customer base. The content can also be used to help you grow in various ways.

Start with a blog where you provide valuable content such as articles, videos, tutorials, checklists, and other free sources of knowledge to your visitors. Identify the most common problems your target audience faces and offer solutions.

With a differentiated content strategy, you can also build so-called sales funnels – this involves initially attracting your visitors with a free offer, such as a free guide on how to successfully sell your products online (for sellers) or how to evaluate the quality of certain products (for buyers). To download the guide, visitors will only need to provide their email address, which you capture using opt-in forms. Subsequently, you can deliver further personalized content through an email marketing strategy and eventually make an offer. This approach is very cost-effective and is especially recommended for marketplaces with a limited marketing budget.

The marketplace Etsy runs a blog and creates content that aligns with the needs of Etsy’s target audience. The articles address the most common questions from visitors and help them make a purchase decision.

7. Paid Advertising

If you have capital, you should use it to buy growth. Typically, it is used for search engine marketing for the online marketplace, for example, to run ads on Google (AdWords) and similar platforms. However, social media marketing is just as effective, where potential customers are reached via Facebook or Twitter. For this, banner advertising is purchased, which brings more visitors to your online marketplace.

8. Email Marketing

There is a statistic that shows it costs roughly five times as much to attract new customers than to retain existing ones. An online marketplace should focus from the outset on building as broad a base of loyal customers as possible rather than constantly relying on new customers. Additionally, existing customers should be motivated and encouraged to participate regularly in the online marketplace. Email marketing has proven to be particularly successful and cost-effective in this regard. The customer list should be actively used and regularly informed about offers. Moreover, information about services or new products can be sent out repeatedly.

Rebelle uses email marketing very efficiently, both to acquire new customers and to retain loyal ones.

9. Building a Community

Many successful modern marketplaces have achieved their success by creating a community within their offering. Airbnb explicitly brands itself as a community marketplace. Etsy now publicly proclaims that it is more than just a marketplace and presents itself as a community. Both platforms want their users to be connected with each other and to spend time on their site—even if they are not looking to purchase anything in particular. This is often a wise decision, as it builds a positive connection: when users consider themselves part of a community, customer loyalty is set in stone and they are unlikely to switch to another online marketplace.

eBay is the perfect example of a strong community. The marketplace has a dedicated website where members of the eBay community can communicate with each other and benefit from various advantages.

Conclusion

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