3 Reasons Your Online Marketplace Is Broken (And How to Fix It)

Whether it’s online or offline, marketplaces are a great place for startups as well as small to medium enterprises to showcase their products to a wide audience. Just like an offline marketplace, it has vendors and an owner.

While vendors have a responsibility to maintain their stores, marketplace owners have a bigger responsibility that includes making sure the place is functioning correctly and that it is secure for both sellers and buyers.

Just like a real mall, however, online marketplaces are also subject to different kinds of problems. These incidents happen for several reasons.

We have listed three of these reasons and provide some practical solutions.

Poor or Non-Existent Risk Management

Risks are part of everyday life; thus, it makes sense for businesses to have the foresight and create a plan to face them when they pop up in the future. You, as a marketplace owner, should have one in place.

Without risk management, your business can be likened to a car without a spare tire, or someone going to a new place without a map or doing any research. Imagine what would happen if suddenly the car breaks down in the middle of nowhere, or the person arrives at the destination unknown to him. They are just opening themselves to more risks or dangers.

Let’s take a real-life example – Uber.

The company that started with a bang suddenly found themselves beset with various problems because of poor risk management. Some of those mistakes include failing to do a background check to their drivers leading to a woman getting raped in India and the surging fare increase hours after the hostage crisis in Sydney.

Risks like the Sydney incident can be lessened if you, as the marketplace owner, are always in touch with your vendors. Constant communication establishes trust and security between you and your vendors; thus, if risks do show up, you can comfortably ask a favor from them.

Similar to the rape incident in India, marketplaces also suffer similar challenges, like a vendor not delivering goods or selling damaged products. Such a situation can be solved by a background check. These procedures can be done easily nowadays without having to spend a lot of money. There are software and tools like Monetha, Tallos Intelligence, and Trend Micro which conducts a reputation check on people, things, and websites.

No Community Regulation

Code opportunists and forum trolls – these are just two of the everyday challenges of online marketplaces. As a marketplace owner, you need to have the regulations set at the very beginning because these rules will reflect your brand as well as your community. You also need to moderate and curate a lot, even if you have already established your business.

For example, regularly gathering all the available retail spaces in your marketplace will help you identify which brand or business can greatly benefit from that space. Those benefits include sales, exposure, customer acquisition, and market testing. When your vendors see your support in every facet of their business, it is easy to implement a price increase in the future.

No Idea of the Target Audience

Variety and novelty are good but if you don’t know who your target audience is, you hurt both your vendors and your marketplace. Not knowing your target audience makes you confused because you do not know what to do. It’s like being given a task to speak, but you don’t know who will be the audience. Are they kids, college students, sports people?

Creating a buying persona right at the beginning has many benefits. Who do you want to sell to, how old are they, how much is their income, where do they live? By asking these and other relevant questions, you can quickly tap what kind of sellers you want in your marketplace. You will also know the type of marketing approach you’ll have, the variety of products you will sell, the price range, and so on.


There are other reasons why a marketplace gets broken or experiences some trouble. Assess your platform now and sit down with your team how you can solve them.

You can also talk to your sellers and listen to what the customers are saying. By gathering insights from different places, you’ll be able to create practical solutions.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.