How To Onboard Sellers And Service Providers To Your Online Marketplace

By Dani Zelezniak, CEO of kVisi, Norman Helps co-founder, and an entrepreneur with expertise in blockchain, technology, marketplace platforms and mobile apps. 

I’ve developed many calluses from my experience as a marketplace platform founder, and one consistent theme that’s been evident for me and others seeking to create such environments is that getting both the seller and the provider to use the same platform is not an easy task. So how do you entice your key audience to join your online marketplace? Here is my experienced-based advice and tips to better ensure your marketplace is thriving.

What Is A Marketplace Platform?

A marketplace platform provides a space for vendors of either specific or general goods and services to sell them to an audience and for individuals seeking those goods and services an opportunity to purchase them. A common, direct consumer-to-consumer online marketplace is Facebook Marketplace, where people often post pre-used items for sale.

The great thing about this type of marketplace is that sellers are able to tap into a market of people who they would not otherwise be able to reach and remove the need for a middleman. Amazon, for example, has a mix of business-to-consumer as well as consumer-to-consumer options, where the marketplace takes a cut from seller entities, among other costs. Other common marketplaces you may be familiar with include Uber, Etsy and Fiverr.

The Challenges With Starting A Marketplace Platform

We see marketplaces all over in today’s internet-forward world. However, there are a variety of challenges to be aware of if you are thinking of starting a new marketplace. Understanding these challenges will not only help you avoid the pitfalls of navigating this space, but ultimately also come up with some proactive solutions.


When starting a new marketplace, one of the primary challenges is getting both sellers and buyers to utilize the platform. Sellers are not likely to create profiles if there are no customers, and customers are not likely to use the platform if there are no sellers.

Retailers and service providers are solicited with offers to join marketplaces all the time. If your platform does not stand out from the crowd and offer unique value to both sellers and customers, chances are you will not receive the support you need to make your platform last, nor will you have the reputation to drive it forward.

Online marketplaces are great in theory; however, sellers often find that they pay a high price to sell on certain marketplaces. For example, Fiverr, a digital marketing platform, takes a 20% cut of any sale and/or tip that a seller makes on the platform. If a customer purchases a $100 article from a seller, the seller only makes $80. Other platforms, such as Amazon, do the same thing by charging referral fees, fulfillment fees and placing other costs on the seller.

If a seller chooses to utilize a marketplace, there can be consequences to relying heavily on that marketplace. For example, if a seller on Platform X relies primarily on selling artwork on that platform, and later the platform’s algorithm changes significantly in a manner detrimental to the seller, that could put the seller’s profitability at risk. These kinds of changes happen every day on a variety of marketplace platforms.

Once a marketplace becomes viral or a household name, it can potentially lead to abuse of its power. As already explained above, many marketplaces charge astronomical fees for their sellers to even sell products on the platform. Because of this, it can be challenging to recruit good sellers to your platform.

How To Address Seller Pain Points And Generate Interest In Your Marketplace

You might be saying to yourself, “There seems to be an awful lot of problem-solving involved in starting a marketplace.” Never fear, as there are solutions to all of the above problems.

Prove the value of your marketplace. As previously mentioned, selling on marketplaces often involves cuts in seller earnings. However, if approached properly, you can prove to your sellers that there is still a great opportunity to increase their earnings by utilizing your platform. While small to medium-sized businesses might find success selling directly on their own website and by other means, utilizing your platform opens up a new audience otherwise unavailable to the sellers.

Promise longevity to your sellers. Another concern that potential sellers might have is whether they will lose relevance on your platform. Develop a game theory model for your marketplace so there is no incentive to replace the sellers you provide within your marketplace. Doing so will ensure a seller that using your platform is worth their time and effort.

Stay humble. When you are considering sellers for your platform, stay humble. As you discuss the specifics of each seller’s respective industry, respect their knowledge. Recognize that you may not know everything about what they do or sell. Acting in an arrogant manner could prevent these sellers from signing on with your platform.

Simplicity is key. Make the platform as simple to use as possible with a clean user experience (UX) for both sellers and buyers. If a seller has to overcome significant barriers to use your platform, chances are they will look elsewhere. Your platform needs to solve a problem in the seller’s life — one large enough that they choose to take a chance on the marketplace you are building.

Make your sellers cofounders. Whether your sellers have any real say in how your marketplace functions, make them feel like they are cofounders of your organization. They essentially share a piece of the pie, as they are the living, breathing foundation of your marketplace. 

Provide incentives. Provide incentives for your best sellers. Doing so will encourage sellers to stay with your platform and work toward acquiring those incentives.

Ultimately, sellers are your main customer. If you cannot get sellers to utilize your platform, you will not be able to get customers to purchase off your platform. Understand the pain points for your sellers, and play to those points. Allow your sellers to feel heard and respected — doing so will help your platform start out on excellent footing as you continue building it out.

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