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Developing an Online Marketplace

Developing an Online Marketplace

Online Marketplace Business Plan

Presently, e-commerce marketplaces are getting created faster than brick-and-mortar stores. This has much to do with the success of marketplaces such as Amazon, eBay, Etsy, and Flipkart. These success stories have propelled the aspirations of many potential entrepreneurs all over the globe.

One may be given to believe that creating marketplaces is daunting, however, a good strategy and an effective implementation plan along with defined SOPs (Standard Operating Procedures) can contribute to the creation of a successful e-commerce marketplace. This write-up seeks to interest readers on “how to build a multi-vendor marketplace?” or “how to build a marketplace platform?” It is meant for entrepreneurs who are earnestly looking at the possibility to build a marketplace platform.

What is a Marketplace?

Before we go any further, let’s understand – how to create an online marketplace or how to build a B2B marketplace. What a marketplace really is?. It is an inventory-light e-commerce platform that allows multiple vendors to sell their products, with the commission from each sale going to the marketplace.

The marketplace makes money from commissions on sale by merchants/sellers & third-party advertising done to enhance online visibility. Marketplace is responsible for attracting end consumers to the platform. The marketplace business model has multiple revenue channels and it is one of the main factors that is driving the interest of entrepreneurs in the online marketplace business model.

Major Types of Marketplace Platforms

B2C Online Marketplace Model:

This scale of operation of a B2C marketplace is larger compared to a simple online store. There are multiple stakeholders in the business model which includes merchants or suppliers, end consumer, courier service providers, last-mile delivery team and the back-end operations team of the marketplace. The operations model is very different compared to an online store. The Similarity to an online store, is that it caters to the retail end consumers, the major difference is an online marketplace is an inventory-light model. Amazon and Flipkart are good examples of a multi-vendor online marketplace.

B2B Online Marketplace Model:

This is an e-commerce marketplace business model wherein businesses sell products to various other businesses in bulk quantities.B2B online marketplaces create self-service, digitally-sourced environments where multiple vendors can offer products or services to business customers. As with online B2C sites, B2B marketplaces claim to make it easier to identify the right supplier, improving the customer experience by making transactions simpler and more transparent. Buyers gain choice, value, and greater efficiencies, while sellers, under pressure themselves to grow revenues, gain access to a broader pool of buyers—without the burden of marketing. Most sellers on these platforms tend to be manufacturers, wholesalers or distributors. Websites like Amazon Business (B2B) & Alibaba are good examples of B2B marketplace business models.

P2P Marketplace Model (Peer-to-Peer):

This is a decentralized platform without strict demarcation between buyer and seller. The platform allows two individuals to interact and transact directly with each other without the need for an intermediary. This kind of platform can leverage technology to overcome issues related to trust, and enforcement that is traditionally done with the utilization of third party services. The P2P platform provides services such as screening, rating, payment processing and escrow. A good example of such a model is OLX.

Challenges in Setting Up a Marketplace (Sellers Side)

Now that we understand an online marketplace, let’s delve into the challenges that come forth in setting up a marketplace. Most often these are the reasons, why an entrepreneur backs out from setting up a marketplace, these are:

Policies for Sellers:

An marketplace owner would be served well if he/ she has well-defined and detailed policies for the sellers even before making contact with them. Such policies can be incorporated into the SLA (Service Level Agreement) & SOPs (Standard Operating Procedures) laying down the expectations for the sellers to be aware of while operating on the platform.

For the policy to remain effective the sellers must be asked to concur with the policies by signing a binding agreement that remains in-effect till they remain active in the marketplace. Also, there should be emphasis from the owner on training sellers on the policies formulated for the marketplace

Listing Sellers:

It begins with responding to inquiries from sellers about listing on marketplace and other facets of the business and culminates in the training and onboarding of the sellers/ merchants.

Add-on Services for Sellers:

Getting the sellers on-board does involve a lot of convincing on the part of the marketplace. Most often sellers’ intention to join would be dependent on the value-added services provided. This can involve on-field support, last-mile delivery support, marketing support and so on.

Catalogue Management by Sellers:

Unless a marketplace is attracting a huge amount of traffic and repeat buyers, the sellers usually are quite lethargic about updating their catalogue and inventory. These practices are critical to a new marketplace as wrong inventory information can lead to the cancellation of orders leading to a reduced trust among end-users and the marketplace.

Backend Support:

Since sellers are an integral part of the platform, there needs to be a back-end support system to address their concerns/ queries, as we do for the end-users.

How Your Retail Coach (YRC) be able to address these Concerns?

YRC is able to help an online marketplace with well-defined SOPs that can increase the satisfaction among sellers, reduce the chaos in operations, improve the sellers’ confidence, and go on to enhance the brand image of the marketplace. All these are critical to the business in the first 1000 days and it comes from our experience in setting up several online marketplaces.

Challenges in Setting Up a Marketplace (End-users Side)

Order Management:

In the initial days of a marketplace, it becomes extremely important to establish trust among shoppers and this has to be done with efficient order management where individual deliveries happen in a timely and correct manner. The process can be streamlined with adequate coordination between the seller and the delivery partner. In such cases, SLA (Service Level Agreements) can play a critical role in monitoring error rates and reduce them substantially in the long-run.

Last-Mile Delivery:

An online marketplace has to understand quite early the importance of timely delivery and returns from customers. There can be no room for lapses in this area and it has to be well-managed by the stakeholder in charge.

Customer Care Management:

This area of business activity acts as the voice of the brand and it is extremely critical that seamless communication between the marketplace and customers gets established. The marketplace must remain sensitive to the concerns and grievances of the customer to uphold the reputation of the brand. In contrast, a callous attitude towards customer concerns can cause a grievous impact on the image of the brand in the long-run.

Customer Engagement:

The success of an online marketplace is more or less dependent on repeat buying. This makes customer engagement an important aspect that must be given due attention encouraging users to return to the market place and become loyal customers. Here, activities associated with database management and handling of CRM are likely to play an integral role in the pattern associated with repeat buying.

How Your Retail Coach (YRC) is able to Address these Challenges?

YRC can play an instrumental role in the success of an online marketplace with well-defined SOPs (Standard Operating Procedures) that can enhance the brand image by addressing and solving customer grievances with utmost precision and care. In addition, the backend team would be equipped with well-written and articulate process manuals by e-commerce experts which will reduce error rates and increase the happiness quotient among customers.

Why are YRC Experts the most Preferred for Setting up an Online Marketplace?

We have in-house experts who have extensively worked in the field of e-commerce and come with hands-on experience in setting up online businesses in various niches. Moreover, our team of professionals has played integral roles in enhancing the brand value, image, and improving overall satisfaction level among online customers. Our most sought-after services in the e-commerce domain include:

  • Online Marketplace Business Plan
  • Market Research for Business Model Validation
  • Online Marketplace Best Practices/ SOPs/ Process Manuals
  • Customer Experience Enhancement (CX)

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The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.


No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)


Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.


Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.


  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.


At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.


This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!


This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.


Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.


Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.


Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.


Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.


Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.


Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.