What Startup Founders should know before building a C2C Marketplace

The Dos and Don’ts

Photo by Myriam Jessier on Unsplash

If you are building a marketplace, your primary focus should be on building a sustainable business.

The reason being that in the current landscape, there is no such an easy way to replicate your product. Therefore, you need to really nail the product and create a unique value proposition to differentiate your offering from other players.

In C2C, you are selling directly to customers whereas in B2C, you are selling through retailers/wholesalers

These two models are very different from each other and require different approaches for building a sustainable marketplace model.

What’s the best way to go about finding merchants for a C2C Marketplace?

It is difficult to find merchants who fit your target customer profile and who will be willing to do business with you in the first place.

How do you ensure that your marketplace has a healthy competitive environment?

The best way to ensure a healthy competitive environment is to create a platform that is valuable for both the buyers and sellers.

The more valuable the marketplace becomes for customers, the more they are willing to spend on it.

When customers spend, then sellers will follow suit because they have access to a larger customer base on your platform.

How do you choose which marketplace to build? (Or should you build one at all?)

It is very important to understand your customers’ problems and find out how they are solving those problems in their current state. Then, once you have understood these problems, it is very important to figure out if there is a way you can solve these problems better than what already exists in the market.

How should you decide what category to build your marketplace around?

It is important to choose a good category because categories are like a fingerprint — they represent your business. If you are building an eCommerce marketplace, then make sure that you only pick categories that are relevant to your business.

Is it a good idea to build a marketplace if you are not the first one to enter the market?

If you are looking to build a monopoly-like business model where you have access to 100% of the market, then yes, it is absolutely a good idea to build a marketplace.

What are some of the mistakes that I should avoid while building my marketplace business?

There are certain things that I usually see people doing wrong when they are starting out with their marketplace business.

If you are building a marketplace business then there should be no space for short-term gains.

You need to ensure that you are creating a sustainable business model and that your focus should be on creating value for the customer and the merchant — not on making money from them.

  1. Not considering the long-term consequences of your actions — looking at short-term gains instead of thinking about the long term.
  2. Not thinking about providing value to both sides instead of just making money from them.

Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and investor.