How to create a services marketplace ?

The history of the marketplace

Let’s start at the beginning. The democratization of the Internet has given way to new consumption habits that have further developed in the wake of the pandemic. Internet users are no longer simply looking for information, they also want to consume. To consume what? Products but also services!

Since the 90’s, e-commerce allows to buy on the Web. It has developed over the years and it is the giant Amazon who democratized the marketplace from 1994. It is then a waltz of marketplaces that we have at our disposal like Le Bon Coin, AirBnb, Blablabla Car, CDiscount, etc.

The difference between a marketplace and e-commerce

Whether it is a marketplace or e-commerce, both offer to buy online. This is what they have in common. However, the major difference is that e-commerce offers a direct sale from a seller specifically when the marketplace is similar to a physical market.

More concretely, marketplaces are digital places. This means that, like a physical market, there are several sellers within the same platform of remote sale. It is an online sales marketplace.

The difference between a services marketplace and a products marketplace

Pretty simple! The goal of a product marketplace is to sell a product online (Amazon, Alibaba, Etsy, etc.) while a service marketplace markets its services (UberEat, AirBnb, Doctolib, etc.).

Initially, product marketplaces appeared as an intermediary between producers and customers. They were a good alternative to e-commerce, not necessarily accessible to all, especially for the small corner shopkeeper. But with the rise of online sales, service providers have adapted perfectly to benefit from an additional growth potential for their business.

Today, it is possible to buy products and services on the Net thanks to the various existing marketplaces.

The different types of marketplace

There are three types of marketplaces:

• the b2c marketplace: from professional sellers to individual buyers (e.g. Amazon)
• the b2b marketplace: from professional sellers to professional buyers (Malt for example)
• the c2c marketplace: from private sellers to private buyers (Etsy, le Bon Coin, Abritel, BlablaCar, etc.).

Each type of marketplace can be either a service marketplace or a product marketplace.

The different types of services marketplace

There are indeed several kinds of service marketplaces:

• The rental marketplace: following the example of AirBnb for the rental of accommodation for example. It can also be about renting tools, vehicles, various objects, etc.
• The marketplace for the sale of services: the service provider literally sells its services (carpooling, transportation of goods, gardening, DIY, construction, etc.)
• The marketplace of networks: it puts in relation several actors between them.

What is the role of a service marketplace?

The role of a service marketplace is simple: to meet a growing need of consumers to obtain their service at a given time and place. It connects a service provider, professional or private, with a user looking for a specific service.

When the marketplace was a good complement to a merchant’s store that did not necessarily have online visibility, the service marketplace develops the online service business and offers a real business opportunity.

The services marketplace: a growth opportunity

The services marketplace addresses different actors and meets a real need of consumers. When some small traders or craftsmen are not visible on the Internet, the services marketplace remedies it. And we are not unaware that a large majority of services research is now done online.

Who is not going to type in his search bar “good bricklayer in Lille” or “best painter in Nantes” to do his research? Who is not going to rent his vacation home on the Internet?

The service marketplace offers an incredible opportunity for those who do not necessarily have the means to create their own website. And even if you do, the online marketplace allows you to increase your sales opportunities. That’s extra leads and therefore, extra business.

How to create a services marketplace?

Now, let’s get to the heart of our problem: the creation of a services marketplace. Indeed, it is not improvised. So let’s detail the important elements to remember in order to successfully create a services marketplace.

Define the business model of your services marketplace

First of all, it is important to define your business model. There are several models:

• Commissions: taken on each sale of services, commissions can be fixed or proportional.
• Registration fees: this is a flat fee taken from the seller and possibly from the buyer (rarer and less attractive) when they register on the platform.
• Subscription: depending on the features made available to the seller, the operator can set up a subscription system allowing him to have a recurring income known in advance. Its main disadvantage is that it does not necessarily push the seller to perform.
• Listing fees: these are one-time fees that the seller pays when he puts his different services on sale.

When creating a marketplace of services, you can choose to opt for one of these elements or several at the same time. Defining your business model is in fact determining the next sources of revenue for the marketplace.

Carry out a market study and a business plan

The market study consists in knowing different elements:

• Who are the competitors?
• Who are the customers?
• Which target will I aim at?
• What are the services offered by existing services marketplaces?
• Will I offer these services internationally?
• How do I proceed?
• And so on.

All the questions that need to be asked in order to make a success of your services marketplace should not be overlooked and should be the subject of a precise and exhaustive analysis.

Then, it is important to draw up a business plan:

• What are the launch costs?
• What will be the costs during the life of the platform?
• What are my initial funds
• What will be my resources according to the defined business model?

The business plan consists in drawing up a balance sheet (assets/liabilities) and an income statement (expenses/resources) in order to understand the feasibility and future profitability of the service marketplace.

Optimize the payment process

The payment process is one of the key elements of the service marketplace. The payment platform (PSP) must reassure buyers and help them take action. The operator is then required to provide a completely secure system to complete transactions and allow the seller to earn revenue.

Furthermore, the psp must integrate the facility of redistributing its selling price to the seller, commission deducted.

There are several types of payment solutions:

• Stripe
• Mangopay
• Lemonway
• etc.

Select vendors

Sellers are the key to the success of the service marketplace. For that, it is important to select them for their seriousness and the quality of their services. To do this, a review or rating system allows to recruit the best and to put them forward. It is the insurance of the total satisfaction of the final customer.

To propose an optimized referencing

The buyer must be able to quickly find what he is looking for on the platform. It is therefore essential to offer a search tool that is optimized in terms of referencing:

• clear, intuitive, organized and ergonomic menu
• efficient search bar
• automatic filling of the search
• Optimization of the answers thanks to keywords
• filtering and sorting of the search.

Establish a communication plan

Marketing operations, presence on social networks, launch plan, creation of events, creation of a blog, trade shows, press releases, etc. Good communication is essential to make the service marketplace known and to encourage buyers and sellers to use it.

To have an irreproachable legal framework

Creating a service marketplace means facing several regulatory requirements:

• drafting of the GTC (general terms and conditions of sale)
• verification of the necessary certifications, labels, patents
• VAT practice
• banking transactions
• etc.

Many elements require the assistance of legal or accounting professionals in order to be perfectly in order.

Define relevant monitoring indicators

Once launched, it is important not to rest on your laurels. A permanent watch is necessary as well as the determination of relevant monitoring indicators. All of this allows the service marketplace to evolve and to constantly improve.

Analyze what works, what doesn’t work as well, or not at all. This brings an immediate and coherent adaptation possibility useful to the success of its online marketplace.

Management methods

There are two management methodologies for its services marketplace:

• The Waterfall method (waterfall management): this is a sequential management method that organizes the project into several stages. Each step can only start when the previous one is completed. It is a task-by-task management that brings a certain rigor but leaves little room for flexibility or improvisation.
• The agile method: more flexible, this methodology delivers several development projects in parallel, allowing the service marketplace to evolve rapidly and constantly. At Cocolabs, we prefer this method because of its great flexibility and its ability to constantly adapt.

What are the steps to create a services marketplace?

Creating a service marketplace is done in several steps. Each one has its importance and none should be neglected:

• Project: we also talk about pre-framing. It is about defining the broad outlines of the marketplace and its future functionalities.
• Design: once the project is set and defined, the UX teams establish a wireframe of the services marketplace. The UI teams then take care of the design part.
• The development: what has just been defined (design, functionalities, etc.) goes to the coding stage by the developer teams.
• Maintenance: this involves constantly monitoring the platform to ensure that it evolves in line with innovations and customer feedback (sellers and buyers).

Which tool to create a service marketplace?

It’s important to remember that not all marketplaces technologies are designed to meet the same needs. So, whether you want to launch a product or service offering, a B2B marketplace rather than a B2C platform, or vice versa, you need to find the right technology. As online sales of services were developed later, there are fewer service marketplaces than product marketplaces. Scnd technology is the leading authority in this field. And Cocolabs is its expert integrator.

It’s worth noting that it’s also possible to create a service marketplace from scratch. Our specialized marketplace development agency can help you do just that.

Some examples of services marketplaces

Let’s mention a few examples of marketplace services available to individuals and professionals:

• works : mestravaux.com
• catering: Deliveroo
• accommodation : AirBnb
• personal services: helping.fr
• training: Udemy
• carpooling: Blablacar
• transportation: Wepal
• health: Mondocteur
• events: Bizmeeting
• freelancers : Malt
• travel : Voyage Privé
• do-it-yourself : maison-travaux.fr
• gardening : cmonjardinier.com
• etc.
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There are as many platforms as there are services. So creating a marketplace for services is timely and necessarily meets a customer need. It allows all service providers to be present online and to have visibility if they do not have an e-commerce platform.

Cocolabs is at your disposal to learn more. Do not wait to contact us!