Build an online marketplace : who to target first?

Article by Thinh @dreamthinh - 06 Dec 2019 - 4 minute read

Creating an online marketplace business is a long term process, starting with building a community of users.

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By now you should be well aware that when building a marketplace business, targeting both user types (suppliers and customers) at the same type isn't a good idea.

But then it raises the question: if I have to pick one side to focus on, which one should it be?

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Sadly there's no one-fits-all answer. It depends on your particular case and context. While I generally recommend starting focusing on making *providers* happy, i.e getting more demand than supply, it doesn't have to always be the case.

When to target providers first

In many cases, it's a good idea to onboard just a few providers, then make them super happy by getting them a lot of buyers.

Here's the crux: when you're in a niche, and the demand is low, focus first on suppliers.

For instance, say you're a service marketplace for bands who specialized in house party gigs. Here's what you should do. Go find one or two bands that are seeking to make some bucks and tell them you can get them paid gigs. Unless a sudden change in trends, last time I check, paying a band to come to play at your house party wasn't really a thing. So chances are you'll have a bit of work to find buyers for it. That's ok, your goal, after all, is exactly that: make the providers (and buyers) life easier. **So, when you start, you'll have to do the work manually**. Go on the internet, ask your friends, go to your neighborhood and see if someone is about to throw a party, then ask them if they would use a band to liven up the night.

It's only when you found multiple gigs for your first bands, and they realize it's cool—and above all effective to use your platform—that you can start onboarding, new bands.

So basically for each supplier, you introduce to your marketplace, you need at least 2 or 3 buyers.

When to target buyers first

The only case I can think of where you can start onboarding buyers first is when there's a huge demand, in considerable excess of supply. That's a pretty rare case, since when it happens, usually the supply quickly grows to cater to the demand. But if you found an untapped market opportunity or one that has just started to become a thing, you can start onboarding buyers with the promise of getting them what they want quickly. Since the demand is in excess of supply, people will be more willing to wait a little bit.

Be careful not to overpromise what you can't deliver, so like in the previous case, start with few people at a time.

Then, go hunt for providers. This part is usually pretty easy. You know, when you go to see someone selling something and tell them "hey, I got people in line wanting to buy this from you," usually you don't have to push much to get them interested.

Thinh @dreamthinh
About Thinh @dreamthinh

I'm an entrepreneur and writer. I have keen interest in marketplaces, having founded two. You can find more of the stuff I write on Medium.