Starting a marketplace where you don't sell anything and still make money

Starting a marketplace where you don't sell anything and still make money

Everyone knows of big corporations like eBay, Amazon, and Alibaba.  Did you know that they don't sell a single product on their own platforms?  They started the idea of putting together a website that lets other people sell their items, and they would get a small percentage for the seller using their platform, and now the CEOs are billionaires because of how many people and companies are now selling on their platforms

I'm not saying you're going to be a billionaire because you start up a marketplace like the billion-dollar corporations did so long ago, but I am saying that you can do this for your own niche and make a decent amount of money over time.  Think about it, when Seocheckout started off they were getting a few sales a day and now they've done millions of sales in total, and I'm not sure if they even knew how successful they were going to be in the long run   If you can replicate the success of these companies, within your own niche, you can corner the market and capture commissions from every sale that comes in

I'm sure you're saying "Why wouldn't people just sell their goods on eBay or Amazon?" and my response to that is, why wouldn't SEO providers sell on other websites besides seocheckout?  It's because you can get niche specific and bring people in from search engine rankings, which will begin to snowball in a positive way and make you more money over time   That's why in this discussion I'll be going over a few things you'll need to look over prior to starting a marketplace where you don't actually sell anything but you make commissions on every seller that makes a sale


Know your industry
If you're getting into the general marketplace niche, you're not going to be too happy when you realize Ebay and Amazon have already cornered that industry.  You'll need to get more specific, which means a smaller community, but more loyal customers because you're more of a specialist website bringing people together.

You need to know what industries don't have a marketplace like this, then set up your own website that will allow sellers to register and list their own products for sale.  If a niche has a marketplace like this, it's not a deal breaker, you just have to evaluate the competition and see if it's easy to defeat them or if it will take years of work to overthrow their authority and start to capture all the sales yourself.

Target specific states, countries, or continents
When you want to get the majority of the market, you'll want to get specific to a certain state, country, or continent in order to funnel in the most sales in the shortest amount of time.  Think about it, if you target a single state with your marketplace, you will make less money but you will have less competition.  You can then bootstrap everything and spread to other states, eventually spreading to the entire country or continent

Know what you want to profit per sale
If you're starting off with the attitude that you'll just wing it, you'll annoy everyone that lists their products and your commissions are all over the place.  The best way to do this is to change 15% to 20% commission for the actual sale and add a small mandatory fee for items under $10.00 so you don't lose any money when taxes come around.  Yes, if you want to be legitimate, you'll need to save money for taxes and the government will need to be paid at the end of the year lol.

You'll need to state how much you'll be getting from each sale, so the person listing the item will know what they're going to get in return after the sale was finalized.  If you're letting users sell physical products, you'll need to adjust your commissions because some people won't agree with the 20% cut just for listing.  You could always charge a $5.00 fee for a listing if the person wants to wave the 20% commission, which some people will gladly take you up on if they have items selling for over $25 each, which will be likely happening if you're working with physical products. 

Take your time building everything
When you're starting off, you'll want to take your time with everything you do, so you don't screw anything up along the way.  If you start off going fast, you'll notice that a small mistake can lose you a whole lot of money, and that could mean you would have to close up shop.  Start slow, figure out what needs to be edited or worked on, then scale up as sales begin to come in.  If you do it this way, you will iron out any mistakes that might have gone unnoticed, and now you're in the better position to make much more money since you haven't lost any along the way

Understand you'll never be done
When you run a marketplace like this, you need to understand that you'll never be done working.  You will always be answering emails and support tickets as well as editing code and updating scripts.  You will always want to add new features, to keep your website fresh and updated, so your users know you're invested in the business and will always be there for them if they need you.  Sure, you won't actually be helping them through every single sale, but they will want to know they have you there if anything does happen to go wrong.


In conclusion
Big marketplaces like eBay, Amazon, and Alibaba started off small and eventually grew to be massive corporations hiring thousands of employees across the world to get everything done for them.  You'll want to start off small as well and bootstrap everything along the way, so you can build gradually and fix any mishaps that may pop up along the way.  If you get niche specific, you can usually be better off because you won't have as much competition compared to if you were just putting up a general marketplace.  So, if you want to start a marketplace, I hope you read through everything I mentioned above and start off on the right foot


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Thanks!

Tommy Carey