Do you want to create a marketplace ? It is a good idea to start an e-commerce business, make an existing website profitable or simply expand your e-commerce activity. Many marketplaces have been launched in recent years and they now represent a significant part of French and global e-commerce. However, there are still many opportunities to be exploited and that is why there is still time to create your own marketplace.
Before you start creating a marketplace, it is important to understand the advantages and disadvantages of a marketplace and its objectives. All this obviously depends on your situation and your objectives. Let's first look at the three main possible situations for entrepreneurs wishing to launch a marketplace.
As mentioned above, there are three main cases in which entrepreneurs are led to create a marketplace. The first is to launch an e-commerce activity "from scratch" Like the creation of an e-commerce site but here it is in the form of a marketplace. That is to say, starting from "you're welcome".
It is also possible to create a marketplace to make an existing site profitable. For example, you have a content site and you are looking to make it profitable. Finally, we can also decide to create a marketplace to make an existing e-commerce site profitable. You already have products, sales and customers but you would like to expand your product catalogue at a lower cost.
And yes, because if you have listened carefully to your e-commerce consultant, you know that stock is very expensive! Selling without buying the stock is therefore very tempting.
Creating a marketplace to launch an e-commerce activity is becoming more and more common. Many solutions have been developed to facilitate this and it is therefore normal that marketplaces sites are exploding in number.
Today, between creating a marketplace or an e-commerce site there is not much difference in the project part, except to make a specific development. As a former e-commerce director, I am not a big fan of specific developments because it often blocks the site or marketplace with the development team.
In any case, for a marketplace creation project, it seems to me more relevant to lean on existing marketplace solutions rather than reinvent the wheel. This will allow you to benefit from their experience and avoid the biggest mistakes in creating a marketplace.
On the other hand, launching a marketplace does not exempt you from creating a good business plan, selecting products and suppliers and doing referencing and acquiring high level traffic! In the case where your marketplace is a new e-commerce site, it is often preferable to select your field of activity carefully and avoid being a generalist. Exploring a sector of activity from top to bottom can allow you to take a leading position in this sector.
In case you already have an existing site, for example a content site, creating a marketplace is very often relevant. You have many advantages: an existing online presence, an activity, content, visitors and a domain name that speaks to a category of Internet users.
You can also create a marketplace to link it to a forum. This makes it possible to make it profitable while keeping two parts technically separate on site. Because in this case too, you have traffic and Internet users. Be careful not to confuse marketplace and dropshipping, see: definition of dropshipping!
You look like nothing, it's already a lot of advantages! Backing a marketplace to an existing site will still require some work but you can more easily send your visitors to your "eshop" part. In the end, you are offering them a new service.
It is up to you to select your suppliers carefully to stay within your theme, at least initially and possibly diversify later.
This strategy has been at the heart of the development of the site pecheur.com which started from a passionate forum in the early 2000s to become the largest e-commerce fishing site in Europe through the creation of a marketplace. It has since been resold to Décathlon.
Finally, third possibility, you already have an e-commerce site and you want to transform it into a marketplace to have more products. After all, this is what Amazon, Cdiscount and many others have done in recent years. Offer new merchants to sell their products on their website. It is a virtuous circle because the merchant becomes "bigger" thanks to the addition of new products, so risks converting more visitors and increasing his average basket and thus growing faster. For the seller, he can sell his products without having to deal with traffic acquisition. So it's a win-win deal.
Since marketplaces have many advantages, it is not surprising that they have grown so much in recent years. You may even have already ordered products in marketplace mode without realizing it. But what exactly are the advantages of creating a marketplace?
We will not hide the fact that this is the number one argument of many marketplaces creators: massively increase the number of products to sell on their site. Indeed, with a marketplace, it is possible to have a virtually unlimited catalogue. And that's good for your SEO on Google! In practice, this is rarely the case for many reasons, but in any case, opening a marketplace does allow you to expand your product catalogue.
Some use it to sell products in new categories and expand their range, Fnac in particular has chosen this path. Others use it to have as complete an assortment as possible on their product range, or even stop selling certain products themselves. This is the case, for example, of nature and discovery and their essential oil raccoons which, at the time of writing, is totally "marketplacified".
Having the cake and eat it too, that's a bit like that with marketplace. The merchant benefits from a much larger stock but does not have to suffer the consequences in his warehouse! He does not have to store, handle or pay for the products. And stock is expensive. Very expensive. Opening a marketplace to sell more without impacting your working capital requirement is therefore a very good idea to succeed in e-commerce.
Since each product added to the site costs virtually nothing, it is possible to expand your range easily, provided you have the right salespeople. A site that sells miniature figurines will therefore be able to easily add small cars to its catalogue and test, via a newsletter, the interest of its customers for this type of product. So you can test new products or categories every day, every week or every month and make your e-commerce site evolve much more easily.
Creating a marketplace to become the number 1 in your sector is a strategy that can be a win-win situation. Indeed, it will be more difficult for you to sell all the products yourself, to pay for them and to manage the stock.
While by aggregating your competitors' offers, they will certainly make sales, but you make your site more profitable each time.
As we have seen, opening a marketplace can be extremely interesting and allow you to develop your e-business even further. However, there are some disadvantages to keep in mind when you want to enter the marketplace.
It may seem counter-intuitive, but yes, a marketplace, which manages many flows, often costs more than an e-commerce site. Opening a Shopify site, for example, can be done for a few hundred euros. The same marketplace will cost several thousand euros and will "burden" the entire site.
And yes, you have to manage invoicing, payments, stock, displays etc.... Nothing disastrous, but these are investments that you have to keep in mind. You can have all this costed by an e-commerce coach if necessary.
What, but it's not possible? How could a marketplace be less profitable than an e-commerce site? Well, simply by doing a little calculation. Imagine, you are an e-commerce site and you sell a product at 100 € with 100% margin, so you bought it 50 € and you have 50 € left in your pocket (we are excluding taxes for more simplicity)
Now, in marketplace mode, you sell the same product, you will only get 15 € if you take 15% commission. You earn 3 times less money than in "e-commerce" mode. If the customer has cost you 20 € in customer acquisition cost, in the case where you are in e-commerce mode, you have 30 € left, in the case where you are in marketplace, you have just lost 5 €. Don't worry, it's a classic mistake in e-commerce and it's always possible to work on increasing the average basket or increasing the conversion rate to reverse the trend but you have to be aware that e-merchant and marketplace are different jobs with their own economic scenarios.
Now that we have made a much too long and good introduction, it is time to see how to really create a marketplace. To achieve this, many solutions have emerged in recent years and the least we can say is that there are solutions for all budgets. This list is not exhaustive because I have not tested all the solutions in the world that exist to create a marketplace. If you are a marketplace solution editor, feel free to contact me to arrange a demo to add your solution to the list.
Mirakl is a bit like the rolls-royce of marketplaces solutions. It is one of the historical actors founded by former FNAC members who have done a good job. Mirakl is a solution rather reserved for large accounts, even very large accounts. Today Mirakl claims to be the leading marketplace publisher but without further details. What is certain is that many large French e-commerce sites use it. I know that Rueducommerce has used Mirakl for part of its site, for example, as well as Nature and Discovery, Carrefour and others.
A robust solution for hundreds of thousands or even millions of products and to manage rather serious order peaks. I let you imagine the peaks in sales at Christmas when you are the infrastructure of many large European e-commerce sites.
Izberg is Mirakl's competitor. Much smaller in size, Izberg has recently merged with its main "Open" integrator (more than 3500 employees) (LSA sources). This should enable it to develop much faster now and to conquer the international market.
Izberg remains in the marketplaces creation solutions rather dedicated to large groups with sites running at several hundred thousand euros of licensing and integration.
If you are in Mirakl and/or Izberg's target, chances are you have already been approached by one of the two teams. If you have not been contacted, it is likely that these solutions are out of budget for you.
Speaking of more affordable solutions, Wizaplace is the equivalent of Izberg or Mirakl but in a more accessible version. From the information I was able to get, the budget is equivalent to creating a Prestashop or Magento site. Between € 20,000 and € 80,000 depending on your needs.
Certainly it is not cheap but we look back on budgets that many e-merchants can afford to deploy for a site redesign or a change of e-commerce platform. Wizaplace therefore has many advantages to establish itself as the reference marketplace solution in the coming years on the middle market
And yes, Shopify can also be transformed into a marketplace! You will certainly need a Shopify agency for this and some plugins. Today, Webkul is the most widely used plugin. To date, on Shopify, it offers the most features and is the oldest. That said, there is still room for potential competitors because with more than 800,000 shopify sites, the Webkul plugin cannot suit everyone.
Prestashop, one of the most widely used e-commerce solutions in France and Europe, can also be transformed into a site marketplace using a few plugins. There are several on the Prestashop marketplace addons and unfortunately I couldn't test them. The prices are very affordable (200 € maximum) and make me doubt the viability of these addons over time. Building a marketplace is a very technical job and you need to have the resources to update, monitor regulations and properly manage all flows.
Magento can also be transformed into a marketplace. There are plugins for this such as the famous webkul which also runs on Shopify. However, there is more competition on Magento's plugin platform and it is still possible to completely modify the Magento source code to modify it from the inside.
However, with the end of Magento 1 and the migration of many magento to Shopify, the price of Magento 2 and uncertainties about the direction of the software. Do we really have to launch a marketplace on Magento right now or wait a little while for things to settle down?
In short, as we have seen, launching a marketplace is quite possible and desirable in many cases. There are still challenges to be met to make a marketplace profitable, but this will be the subject of a future article!
For my part, I would like to conclude with a personal anecdote. I was able to launch one of the first French marketplaces in 2009 and it was an extremely rewarding experience. Moreover, by increasing the number of products, we were able to compete in Google SEO with many players and take solid positions. Unfortunately the marketplace in question no longer exists at the moment because it has been resold and I did not keep any screenshots.
Launching a marketplace is an extremely stimulating adventure for a merchant because everything becomes possible again as soon as the stock is no longer a subject. It's as if a new world is opening up to you.
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