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Strategies for Growing and Scaling Your Marketplace

INSPIRED & WRITTEN BY Arcadier

You may be satisfied with the community of existing users on your marketplace if you’re running it as a non-profit or for a community organisation. But if you want your startup to grow into a company, there are ways you can ramp up supply and demand to build a self-sustaining cycle. Network effects will then start kicking in, sellers will start listing more products, and buyers return to look for products in other categories.


As you begin to scale, these are the basic set of strategies for you to take your marketplace forward:

Convince sellers on other sites to join your marketplace

You’ll need more effort and creativity to pull this off, but it may just be the right strategy to take your marketplace to the top. Airbnb did the same, targeting Craigslist users who buy and sell temporary lodging.  Craigslist may have the user base and inventory, but Airbnb knew that they could offer a personalised experience, compared to Craigslist which lists a multitude of categories.



Airbnb executed this growth hacking strategy through several means. First, they emailed Craigslist listers and encouraged them to check out Airbnb. Airbnb also initially allowed its users to publish their vacation rentals on Craigslist, but redirected customers to Airbnb’s website to complete the booking process.


However, you could be treading on thin ice if the circumstances are not in your favour. This move by Airbnb has been criticised as unethical. Many sites have become wary of such occurrences, and Craigslist was quick to ban such activity on its site.


You can also opt for a cooperative strategy by partnering with an existing network to attract some of their users. But to get them to stay on your platform, your marketplace must be able to present additional value.

Identify and target high-value users

Who are the high-value users and influencers on your platform? It could be a few reputable suppliers, or a specific group of users that will drive interaction, depending on the type of marketplace you’re operating. Dating websites, for example, would identify women as high-value users as they can attract more users to your ecosystem.


Photo credit: Pamorama.


Online restaurant reservation platform OpenTable identified and targeted the top 20 restaurants in San Francisco, and that boosted their credibility and drove interest from users and other restaurants to use their platform. Often, many platforms will provide incentives or subsidies to encourage the participation of these high-value users.

Trust and safety is priority

The bigger your marketplace grows, the more variety of people you’ll come across. Some of them are enthusiastic about joining the community you’ve fostered, but there will also be a number of people with ill intent. How do you prevent these people from doing harm to other users of your marketplace?


Developing a solid trust and safety program is key in improving transparency in a marketplace. This can be done through ratings and reviews from both the customers and providers, like Airbnb does. The more credible your rating system is, the less likely you run the risk of buyers and sellers setting the transaction off platform. You should also offer some level of guarantee and personalised customer service to enhance your marketplace’s trust factor.

Protect your marketplace uniqueness

Another issue you’ll inevitably face with the growth of your marketplace is the dilution of marketplace uniqueness. There will be sellers from other marketplaces that try to cash in on your marketplace’s success, or your suppliers might seek other online sites to sell their products and services.


How do you prevent this from happening? You can lower the listing or transaction fees for unique inventory, or develop an ecosystem to add value to your existing offerings. Another way would be to keep building on your uniqueness as you grow. Continuously develop your marketplace offerings to further fulfill the needs of your customers and suppliers. It could be a communication or collaboration tool, or the integration of other products and services into your marketplace platform.


This will eventually lead to your marketplace having its own ecosystem:

Develop an ecosystem

Once you have the resources to offer add-on products and services that complement your marketplace’s offerings, your marketplace will bring even more value to its users. If you’re running a product rental marketplace, you can start thinking about having your own shipping or insurance services.


Photo source: Slideshare.


If you’re not there yet, don’t fret! There are other ways for you to build up your ecosystem. You can support third-party services that enhance your marketplace’s overall value to the users by formalising their role.

Focus on your vision

You have got to be the strongest supporter of your own vision. Take note of market reactions, but be aware of increased word of mouth from your early adopters, increased repeat usage from buyers, increased listings from sellers, and positive user feedback to validate your ideas.


The early adopters and the niche group of users that believe in your vision will propel your ideas forward and help you spread the word, so be sure to give them your best. Cater to those who are passionate about your vision by reaching out to them, creating an open environment for them to meet, discuss and give feedback.


If you don’t see signs of traction after six to nine months with a SaaS or e-commerce startup, you should reassess your market or model. However, this timetable is too accelerated for most marketplace businesses. Considering you need to establish both buyer and seller communities, you will need more time to prove out your business when building a two-sided marketplace.


The power of a passionate community or user base cannot be emphasised enough — once you reach critical mass, things will accelerate on their own and your marketplace will be hard to unseat due to the strong network effects. You could build the next Uber, Kickstarter, or Airbnb. Good luck, and have fun during the learning process!

After reading our article, these are the questions that should pique your interest:
Which existing networks can you partner with or utilise to build your marketplace community?
What else can you do to weed out users with ill intent and protect other marketplace users?
Which value-added services can you incorporate into your own ecosystem with the least resources but maximum gain?

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