One of the major challenges of starting an online marketplace is setting yourself apart from the rest of the competition. Most sites struggle with inconsistent revenue generation from one-off sales. In some cases it is the lack of marketing, in others, it’s a buggy website. Whatever the reason, such factors discourage sellers from joining your online market, which in turn hurts your reputation.
Even when you create a compelling store and tick the right boxes, your marketplace may not see any serious activity. The competition is just too much. So, what are your options?
Instead of competing with existing giants, you can approach the crowd from a different perspective. Consumers have the liberty to choose from a wide variety of online stores and they are more likely to choose ones they are familiar with.
So, rather than targeting the product, focus towards their need for said product. In other words, deal with the clockwork hassle of continuously buying items altogether. Offer them a one off solution to automate the whole process. No more browsing through endless choices, adding them to the cart and proceeding to checkout. Just pay once and they’re set for that month or year, whichever is better. Subscription marketplaces are great at doing that lately, business is booming!
Don’t believe us? Let’s take a look at Amazon. Back in 2017 the company launched a $23 subscription book box for kids.
Now, why do you think Amazon, the biggest global marketplace giant, invested in subscription boxes marketing of all places? It’s because the online subscription market generated more than $2.6 billion in revenue in 2016. Moreover, almost 22.5% of subscription based companies witnessed accelerated growth throughout the topsy turvy 2020!
Subscription marketplaces are the future, and in this guide, we will help you build one for yourself. Firstly, we will discuss the different kinds of subscription services, to help you decide which one works best for your business. Then we will jump right into the building process, which includes understanding the workflow, user experience, useful tools and features. So, without further ado, let’s begin!
How to get started with your Subscription Marketplace?
There are three types of subscription services:
- Replenishment Services- Replenishment services refer to daily household items such as groceries, baby products, cleaning itineraries etc. Consumables you require on an everyday basis fall under the category of replenishment services.
- Curated Services- Curated services offer a collection of products based on your customer’s requirements. So, if you have kids, you can subscribe to children-specific curated items. In it, you could receive surprise toys, coloring books, storybooks, puzzles and much more. The surprising nature of curated subscription boxes is the reason why they are so popular.
- Access/Membership Services- Access or membership-based services offer additional features to their customers. For instance, Amazon offers exclusive deals and discounts to Amazon Prime subscribers, in addition to other facilities like Amazon Music and Prime Videos.
Before we move into the building process you must decide what kind of business model you want for your marketplace. It will play a key factor on how you shape your site and it interacts with your target audience.
We will come back to this later, but, for now, let’s start with the building process.
How to Build your Subscription Marketplace?
Building a marketplace is not all code and design. You can have the most flashy store in the world and still fail to generate consistent revenue.
Your online subscription store should appeal to the target audience. It should be easy to navigate and must have the necessary features they have grown accustomed to from all over the internet.
You need to set yourself apart, but more on that later. In this section we begin with the workflow of a subscription marketplace. Understanding the workflow is important, as it helps you decide the features and tools required in an online subscription marketplace.
Understanding the Subscription Marketplace Workflow
The subscription marketplace is like any other eCommerce business, with one exception, renewals.
Here is an overview of the entire workflow, from the start to the finish,
- Search- Customers search for the specified service.
- Results- Subscription platforms provide a list of potential services based on requirements, price and subscription period.
- Subscribing- The customer chooses a desirable period(a month or a year) and subscribes to one of your providers.
- Payment- The service provider receives payment as per the revenue model.
- Renewal- Customers receive a renewal request when the subscribed service is nearing termination.
- Rate & Review- Customers review the service during or at the end of the subscription period.
Consider user experience while building a Subscription Marketplace
Ever wondered why most subscription eCommerce stores put their menu to the left side of the screen? Filters and categories are always located to the left and the same applies even for apps? It’s not just a coincidence that. The practice is based on human behaviour. During a research, the Nielsen Norman Group revealed that web users spend 80% of their viewing time focusing on the left side of the screen.
You can focus on countless similar design choices to make your websites functional and at the same time, likeable.
What are the must have features in a Subscription Marketplace?
We‘ve talked about workflow and the importance of preserving the customer experience. Now it’s time to shortlist some features for your marketplace.
The list is not perfect by any means, but will help you take the initial steps towards establishing and establishing your marketplace. You can later add or remove features based on your requirements. Here is the list of must-have features for a subscription marketplace.
For the Customer:
- Navigation menu- A clean looking and well-structured navigation menu aims to provide a pleasant user experience. If you offer a lot of subscriptions an easily navigable interface will go a long way in establishing a long-lasting relationship with your customers.
- Features Subscriptions- Consider including a dedicated featured section to offer better visibility to sellers. You can charge them an additional fee for this feature, while providing your customers with high quality subscription services
- Recommendations- Based on a customer’s browsing habits habits, you can suggest viable recommendations to keep them engaged on your site, and upsell more subscriptions.
For the Sellers:
- Intuitive user Interface- An intuitive user interface facilitates seamless hands-on onboarding. Sellers should be able to easily add and manage subscriptions services. The better and more intuitive the user-interface the higher your chances of getting more vendors lining up for your marketplace.
- Coupons and discounts- All leading marketplaces do it. YouTube frequently gives out 3 month coupon codes for YouTube Premium. Skillshare, a learning platform, also relies on coupons and discounts to attract their audience. It keeps them happy and wanting more. Allowing your sellers to provide coupons can be the perfect way to gain momentum during your early days as a subscription marketplace.
- Loyalty Programs & Retention Campaigns- Increasing customer retention by a mere 5% potentially increases your profits from 25%-95%. There allowing your sellers to give a little something extra to loyal customers can be very beneficial to both you and your sellers.
- Trial Management Process- As a subscription service, offering trial period is a no brainer. Your marketplace should allow vendors to offer flexible trial periods in order to optimize the onboarding process of potential customers and maximize retention.
- Tiered or Segmented Subscriptions- Taking cues from leading marketplaces that sell monthly subscriptions, tiered subscriptions is vital to the growth of your business. Netflix used to have three segments, each addressed to a specific audience. However, they started offering mobile subscriptions to attract more subscribers using smartphones and tablets. By offering tiered subscriptions with varying prices you’ll attract a wider audience, and increase the likelihood of higher revenues.
- Option to choose payment getaways- Not all sellers will agree to the same payment gateway. Some prefer PayPal while others Stripe or even direct bank transfers. Having such flexibility increases the chances of sellers choosing your marketplace overs others.
- Engaging email marketing campaigns- The ROI (return on investment) on every £1 spent on email marketing is close to £42 , making it one of the must have features in any online marketplace.
How to set up your online marketplace with a subscription selling platform?
So, you’ve decided a business model, understood the workflow and even got a list of essential features for your subscription marketplace. Now comes the hard part which is planning and actually building the whole thing.
Here is a fun fact. Did you know that the cost of building an online marketplace costs upwards of $20,000? Considering the big picture, it seems to be a reasonable investment. But what if I told you that you can build an equally resourceful and functional website, at a fraction of the cost?
It is possible to create a fully operational subscription marketplace without writing a single line of code. With the right tools you can create a marketplace within days and here at MultiVendorX we provide just that.
WooCommerce requires no introduction and as of now there are 4.4 million users who are benefitting from its services. It’s a free and versatile subscription plugin that lets you handcraft your eCommerce business on WordPress. It even offers a dedicated subscription addon that converts your online store into a subscription based business model. However, it’s still an online store, but MultiVendorX can convert it into a marketplace, for free.
Once you’ve downloaded both plugins, activated them and set them up(takes a day at most), vendors can simply login into their accounts and make preparations to start selling. No codes, no messy debugging or testing phase, just download and install and you’re ready to go.
Now it’s time to address the elephant in the room. What do you do when a feature is not working like it was supposed to? A reliable support team is the backbone of any marketplace platform and we are no exception. We have an experienced support team on standby just in case. Simply drop a message on our forum and someone from our end will get back to as soon as possible. So whether you’re creating a subscription box marketplace, or offering replenishment subscription services, we’ve got you covered.
How to Grow your Marketplace?
You’ll be competing with the likes of other marketplaces who started way earlier and may have accumulated a reasonable customer base. You must have a marketing strategy in place if you want to sell a subscription box or any subscription-based services. WIth that in mind, here are 6 critical factors to help on your entrepreneurial journey.
- Focus on Retention- In most cases valuable services guarantee retention. Get to know your customers better so that you can predict their preferences. Subscription giants like Netflix and Amazon do it all the time. They keep presenting items based on your preferences thereby keeping you in the loop of self-satisfaction.
- Forecasting- Customers despise the term “out of stock”. Always focus on keeping a full inventory at all times. Luckily with subscription services you get an advanced notice. You can also load up on items based based on certain predictions. For instance, if you see a high demand in maternal products, it’s a good idea to stock up on baby products as well.
- Recommendations- Take the initiative to showcase products in the recommendation section. A subscription service can become trending overnight, you never know.
- Offer Freemiums- It’s tricky but if you can balance the free version with a good offering, customers will incline towards the premium packages.
- Influencers- Get a few influencers on board since 75% of companies are already seeking them for product promotions. Impress the influencers and they will bring in customers to your marketplace.
- Be Unique- You must have heard about the latest social media trend, Clubhouse which is taking the internet by storm. It’s an audio only social media platform that everyone is talking about right.Literally! We are not asking you to be another ‘clubhouse’, but at the least, create a value proposition that grabs attention.
- Study the buyer persona of your target market
- Find out what’s lacking, what you target customers are looking for but not getting from any of the current providers
- Create your own unique voice and double down on that ideas
What are your options to create a subscription marketplace and why should you invest in one?
Everything from entertainment to gaming now relies on subscriptions for a consistent revenue. While sizing up the subscription eCommerce market, we noticed that half of all global marketplaces witnessed limited impact during 2020. These marketplaces were all subscription based, which goes onto prove the reliability of this business model. This is possibly the best time to jump into the market, now that businesses around the globe are starting to get back on track.
You’re now ready to start working on your subscription marketplace. Sign up today and create the perfect marketplace that brings all your ideas to life.