Top 10 Marketplace Mistakes: How to Avoid Them

10 Common Marketplace Mistakes to Avoid

Vanessa Carter
by Vanessa Carter

Content Writer


Creating a marketplace like Amazon, Airbnb, or Lyft is an ambitious and exciting idea. However, in order to run a successful business, you must carefully consider your development strategy, anticipate potential market problems such as a low customer retention rate, and select the appropriate development approach. 

Selling on an online marketplace can be daunting. It's one thing to start an e-commerce business and sell your products through a website you built (or had built for you), and quite another to use social media to spread the word. It's one thing to transition to a multichannel strategy and list your store on an online marketplace. However, as with any new venture, there is the possibility of making early and critical mistakes without even realizing it. 

Marketplace solutions are now extremely useful for connecting with the right customers and vendors. By providing a centralized location to sell products, e-commerce development services help to eliminate online business problems and solutions. Because so many sellers use the marketplace for online selling and e-commerce, it is a reliable source for increasing your sales. 

Joining comes with a long list of fine print terms and conditions and unspoken rules, just like any other membership or online platform. With so much information being thrown at you at once, it can be difficult to determine what will actually affect your business. To be honest, it's all too easy to make mistakes early on that can harm your reputation and hurt your e-commerce business before you even get started. 

This article will discuss some of the marketplace issues and difficulties that online sellers face. We will also concentrate on marketplace model issues that arise during the development process. 

What are the most common marketplace issues? 

Marketplaces are becoming increasingly popular. However, developing a profitable and sustainable e-commerce marketplace necessitates careful consideration of numerous nuances. 

Paying one's dues is what everyone does when starting a marketplace startup. However, you can learn from the mistakes of others in the marketplace and make your path a little easier. 

Creating a high-quality custom marketplace is undoubtedly a difficult task. You should understand your target audience's needs, have a clear marketing plan, select a suitable business model, and much more. 

"Marketplaces are ineffective!" These are frequently heard from marketplace owners who have not received the desired sales volumes on their websites. Entrepreneurs typically make the most mistakes when they are just getting started with their platform. These result in a waste of resources, money, and time. 

However, if you look at the e-commerce and startup scene in recent years, you will notice a slew of marketplaces that have failed to establish themselves in the long run. The question is, what are the most common mistakes and challenges that lead to the failure of online marketplaces? 

Top 10 Marketplace Mistakes: How to Avoid Them

Mistake #1: Selecting the incorrect marketplace 

Sellers frequently choose the wrong platform when hiring an e-commerce website development company for their marketplace. One of the most significant issues with e-commerce marketplaces is that sellers have no idea where to begin. It is important to recognize that a single solution cannot meet the needs of everyone. 

The category in which you list your items is critical to the success of your sales, so choose wisely. Logically, this is a simple area to manage, but it usually necessitates more thought than most sellers devote to it. 


There are numerous options available. Companies can use open-source solutions to build their own marketplace, similar to Amazon. The marketplace platform will be ready in a matter of weeks if the appropriate plugins and features are added. 

Another possibility is to use a SaaS solution. The marketplace platform will be ready in a few weeks if a fee is paid for the services. Another option is a white-label solution, which provides access to the source code and prepares the marketplace by adding some features and themes. 

Needless to say, mapping large amounts of listings to multiple marketplaces takes time, and unfortunately, this process never ends because new items are constantly introduced into the market. To make things more difficult, marketplaces take the initiative and change their category structure on a regular basis, forcing sellers to remap entire segments of their inventory. 

Mistake number two is a violation of the marketplace guidelines 

As a general rule, online marketplaces have strict user guidelines in place to protect both buyers and sellers. This helps to keep the marketplace manageable and ensures that the marketplaces respect and protect their community. This includes ensuring that interactions are respectful, that users' privacy is respected, that no laws are broken, and that no promotions or spamming of users occurs. Any violation of these rules may jeopardize your e-commerce store, reputation, and business. 


It is tempting to rush into selling after opening a seller account. Inadvertently violating guidelines, on the other hand, will result in delays and penalties to your account, negatively impacting the customer's experience. As a result, it is preferable to read the fine print and ask questions ahead of time, as avoiding a mistake is much less expensive than correcting it later. 

Redirecting customers to your own website is mistake number three 

Profitability and business ethics are inextricably linked. A marketplace cannot be profitable or successful if visitors are diverted away from its website. Any traffic and sales conducted on the marketplace should remain on the marketplace, as stated explicitly in their policies. You've made the decision to move into multichannel commerce for a reason, and you must follow the platform's rules. 


We strongly advise you not to even consider trying this. Indeed, such things are frequently stated in market guidelines, rules, and regulations. They'll figure it out and react accordingly. 

Mistake #4: Listing items for sale too soon

Please ensure that the items you have listed are in stock. Expect to start receiving messages immediately after listing an item for sale. More than half of the items on our list result in immediate messages. Be prepared to receive those messages when you first list an item. Someone may have been looking for that item specifically and may respond immediately. 


If the item was recently listed, they would expect an immediate response. Please extend that courtesy to them. This will also assist you in remaining fair and proceeding in the order of who requests first. 

Mistake #5: Not delivering on time 

This is yet another critical mistake. Always ship your orders as soon as possible. This error isn't always caused by selecting a slow shipping partner, running out of stock, or unforeseen logistics and delivery delays. Some sellers don't realize how important timely delivery is at the start of their eCommerce stores and will occasionally ship items late. Shipping delays will result in negative customer feedback, possible returns, and an increase in your cancellation rate. 


It is best to avoid this error by shipping quickly and having enough visibility into your stock levels to accept only the volume of orders that you can support. 

Mistake number six is failing to respond to customer feedback 

This is true for both buying and selling. It's the right thing to do. If you're selling something and the buyer responds, don't be the person who never responds again. If something came up, the stock became tight, or you changed your mind, whatever the case may be, simply be honest with them. The buyer deserves to know what's going on, or you'll put them in an awkward position where they'll undercut you if someone else comes along wanting to buy the item. 


Simply respond when you receive a message (no matter what, as soon as you see it), respond in a way that makes sense, respond kindly, and respond back and forth (don't just disappear and leave the other person hanging). 

Mistake #7: Ineffective advertising and promotion 

Another marketplace issue that arises is poor platform branding and promotion. Without the proper level of awareness, no seller or buyer will recognize the eCommerce marketplace in the first place. 

Beginning with SEO is critical. Low promotion is much more likely to cause consumer problems in the marketplace. SEO can help you become a successful marketplace by providing the right content and using keywords. 


It is difficult to promote marketplaces. Companies must concentrate on both the B2C and B2B aspects of the marketplace business concept. There are numerous ways to improve marketing by engaging in activities that align with the company's goals. 

Social media marketing and collaboration with other brands are also important aspects of developing a strong marketplace identity. 

Mistake #8: Inadequate user experience and design 

The marketplace's UX/UI design entails creating a structure of voluminous multi-page sites on which many products will be placed. 

Of course, both user experience and user interface are critical to the success of your platform. Improved UX/UI design makes your marketplace more interactive and appealing than competitors. 

A poor user experience is the most serious marketplace issue that any company can face. As a result, there is a high cart abandonment rate. Buyers and sellers will not be interested in the marketplace platform unless the necessary elements are in place. 


All of these tasks require the assistance of a creative specialist known as a UX/UI designer. Although UI and UX are distinct aspects of design, the tasks in both directions are frequently intertwined. Furthermore, you may require the services of a specialist who can think through the purchasing process to ensure that it goes as smoothly as possible. 

After all, user experience is a synthesis of several factors, including service quality and the product itself. 

Mistake #9 is a low rate of customer retention

The process of acquiring new solvent customers is known as customer acquisition. The ability to convert new visitors into customers systematically allows for market growth and profit generation. We reveal practical tips to help you increase brand awareness and develop a strong marketing strategy to acquire more customers in the sections below. 


Recruit brand ambassadors. People who use your marketplace for services or products and leave positive reviews or share their positive experiences with friends and family are considered brand advocates. 

In order to make your marketplace more appealing to potential customers, incorporate storytelling into your marketing strategy. 

Start your own blog, use social media to inform customers about the mission of your marketplace, and broadcast your ideas to engage with users. 

Mistake #10: A high rate of cart abandonment 

Nearly 70% of shoppers abandon their shopping carts, making high cart abandonment one of the marketplace's most common issues. There could be several causes for this issue, but the most common is poor user experience. 


Make sure you know everything there is to know about your potential customer so that you can provide them with everything they require and more. It's as simple as that. 

The final word 

Starting a marketplace can appear to be a daunting task. Creating a high-quality custom marketplace is undoubtedly a difficult task. You should understand your target audience's needs, have a clear marketing plan, select a suitable business model, and much more. 

When it comes to ensuring the success of your E-Commerce business, there are numerous factors to consider and implement. 

However, by subscribing to a SaaS platform or purchasing a white-label platform, you have a great opportunity to develop a strong business strategy and avoid being overwhelmed by market problems. 

Nonetheless, given the opportunities and potential of marketplace business models, one should be aware of, but not discouraged by, the issues raised. It is also obvious that solutions and approaches to each of the listed challenges exist. 

Overall, we want you to remember to treat others as you would like to be treated. Be a courteous and trustworthy buyer and seller.

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