What makes a strong marketplace strategy

In 2024, online marketplaces dominate e-commerce. The numbers tell a clear story: in 2021, marketplaces made up over 67% of total online sales. The top 100 marketplaces alone brought in $3.2 trillion in yearly revenue.

By 2027, it's expected that third-party sales through online marketplaces will be the largest and fastest-growing retail channel worldwide.

But success isn't guaranteed. For every Amazon or Etsy, many marketplaces fail in their first year. This happens because they:

• Start too big with too many features
• Target markets that are too broad
• Fail to build their user base sustainably and reach marketplace liquidity
• Try to scale too quickly and run out of money before finding their product-market fit

A strong marketplace strategy changes these odds. It maps your path from validating your idea to building, launching, and growing your business iteratively.

Most successful marketplaces today, including Airbnb and Etsy, started small, tested their ideas quickly, and grew based on user feedback.

Your marketplace strategy needs to answer these key questions:

• What specific problem will your marketplace solve?
• Who are your buyers and sellers?
• How will you make money?
• What features do you need to launch?
• How will you attract your first users?

The best strategy combines big goals with small, practical steps. You'll need a clear view of where you want to go, but you also need to know how to constrain your approach in the early stages to get your business model working.

This means launching a simple platform that connects buyers and sellers effectively.

In this guide, we'll show you how to create and execute a marketplace strategy that works. We'll share proven methods from successful marketplace founders and practical steps you can take right now.