Opening a marketplace may seem like a small thing, but compliance with the relevant laws, analysis of the target audience and the bureaucratic part of the sales system demonstrate the opposite. In this guide we will explain how to open a marketplace effectively.
By “marketplace” we mean an online platform that allows the buying and selling of goods and services through direct contact between buyers and sellers. A real virtual place, where sellers can publish their products and potential customers can purchase them.
Therefore, the products distributed belong to different sellers: it is precisely this characteristic that differentiates marketplaces from e-commerce. Among the marketplaces that have seen considerable success in recent years are Amazon , eBay , Etsy and Alibaba.com, to name a few.
We have seen, in brief, what a marketplace is . Are you interested in opening your own? Between bureaucracy, models, platforms and management software, discover everything you should know on the topic in the guide edited by cbgt.
Opening a marketplace in Line with the Law
To begin with, creating a marketplace requires strict compliance with relevant laws. In fact, to establish a marketplace site, a series of mandatory legal documents must be presented. To build a marketplace in compliance with the law, it is important to:
- Define the business model and understand your role within the marketplace: Will you be an intermediary between buyers and sellers, or will you also be a supplier of products and/or services?
- Choose the legal form: Depending on your growth expectations, you can choose between a limited liability company (SRL), a joint stock company , or a limited partnership. Regardless of the chosen legal form, it is always wise to evaluate the tax aspects of the marketplace with an accountant or lawyer.
- Register your business with the Chamber of Commerce in your area: This will help you obtain a tax code, VAT number, and other important documents linked to your business.
- Comply with privacy laws: Marketplaces collect a lot of personal information.
- Comply with online sales laws: You must provide detailed information on the products or services offered, payment methods, and delivery methods.
- Draft terms and conditions: Protect the rights and responsibilities of users.
- Ensure payment security: One of the most critical aspects of managing a marketplace. The accepted payment systems must be secure and capable of protecting transactions from possible fraud.
- Ensure tax compliance: Regularly check your accounts and, above all, ensure the payment of necessary taxes.
Obviously, a guide cannot replace the careful opinion of a tax and commercial professional. Therefore, we recommend that you always consult experts on the subject.
How much does it cost to create a marketplace from scratch?
Creating a marketplace from scratch can involve costs that vary depending on the complexity of the project, the features required, the platform used, and the level of customization needed. The first thing comes in mind the cost to Opening a marketplace.
The final price of the project is affected by factors such as:
- Website development: On CMS platforms such as WordPress or Shopify.
- Website design: Including logo design, color selection, image selection, and layout design.
- Site features: Such as the integration of a payment system, advanced search function, reviews section, etc.
- Hosting and domain: To position the marketplace and avoid traffic theft.
- Online marketing and advertising: To attract customers. This may include content creation, paid advertising, use of social networks, and other services.
In summary, the cost of creating a marketplace from scratch can vary greatly depending on the specifics of the project.
Selling on Marketplaces: What Difficulties Can You Encounter?
Selling on marketplaces can present various challenges, especially if you are not familiar with the functioning and logic of the different platforms. Here are some examples:
- Order Management Complexity: Without an automated system, manual order management becomes a laborious and error-prone process. Time and resources must be dedicated to monitoring transactions, keeping track of stock, managing shipping addresses, and ensuring the correct organization of deliveries. This can lead to delays, shipping errors, and consequent customer dissatisfaction.
- Difficulty Managing Product Information: Without a centralized system, managing product listings across multiple marketplaces can become complex. Manually updating product information across different platforms can cause discrepancies and errors, which can negatively impact customer trust and business reputation.
- Limited Sales Performance Analytics: Without a proper analytics tool, you may have difficulty monitoring and evaluating your sales performance. Manually collecting data from different platforms is time-consuming and prone to errors. This can hinder your ability to make strategic decisions based on sales data and market trends.
- Ineffective Inventory Management: Without a centralized management system, tracking inventory accurately and timely can become complex. This can lead to issues such as overstocking, understocking, or difficulty syncing inventory across different marketplace platforms.
- Adapting to Marketplace Policies: Each marketplace has its own rules and requirements. Complying with these policies can be complicated, and you risk facing fines, restrictions, or even suspension of your account.
Marketplace Software: What It’s For and Why It’s Important
We’ve already discussed prices. In doing so, you must also consider the costs of marketplace management software, i.e., software that allows for the synchronization of sales. If you’re wondering if it’s something you can do without, the answer is obviously negative, especially when you take into account the reasons we saw in the previous paragraph.
Owning marketplace management software means enjoying an IT system that allows you to manage sales, purchasing, and inventory monitoring operations. Here are some of the reasons why marketplace management software is so important:
- Efficient Inventory Control: This allows you to monitor stocks more precisely and avoid errors in order management.
- Quick Editing of Products: This simplifies user navigation.
- Simplified Management: This helps track the status of each order, from receipt to delivery.
- Payment Automation: This integrates different payment methods.
- Customer Review Management: This provides a detailed overview of product and seller ratings.
- Performance Analysis: This is based on product evaluation and sales trends over time.
- Multilingual Support: This allows you to receive or send clear communications and alerts.
- Integration with Social Networks: Especially Instagram or Facebook platforms.
- Tax Management: This helps sellers manage taxes on cross-border sales and comply with various tax regulations.
- Quick and Easy Returns Management: This simplifies the refund process.
- Subscription Management: This includes special offers with recurring payment or a fixed frequency.
- Management of Loyalty Campaigns: This includes points or discount programs dedicated to the most loyal customers.
- Integration with Other Systems: This optimizes management of warehouses and accounting.
- Quick Mobile Access: This allows you to manage the marketplace anywhere in the world, from the sofa at home or during a walk in the open air.
- Data Security: This ensures the confidentiality of sensitive information such as transactions or login credentials.
In summary, marketplace management software is essential because it simplifies and automates many of the basic operations, reducing manual management to a minimum. Thanks to all the advanced features listed, marketplace managers can focus on growing the business and improving the user experience, instead of investing time and resources in other operations.