no matter what type of marketplace you’re running or which geography you’re in, your marketplace is only as good as the people who sell within it. An easy to use interface, and great logistics all help, but the real make or break factor is your sellers.
When you’re setting up a new marketplace, you have a lot of things to consider. You want to build an excellent platform that’s appealing to the best sellers and attractive to a whole range of consumers. You’re thinking about which third-party logistics and payment processing partners to connect with to provide the tools that you need, you’re trying hard to keep your platform speed as high as possible, and most of all, you’re concerned with filling your marketplace with the most effective vendors and popular products for your vertical.
You know that your marketplace is only as good as the people who sell within it. Bringing in excellent sellers is critical for your marketplace success, so you need to approach it with a clear and careful strategy. You need a seller success funnel.
What is a marketplace Seller Success Funnel?
A seller success funnel is a carefully thought-out, tried-and-tested system for bringing in and retaining the best sellers. You’re already familiar with the concept of a marketing funnel and a sales funnel. A seller success funnel is the same idea.
Just like marketing and sales funnels, your seller success funnel connects a number of linked steps to attract, onboard, and retain the best sellers for your marketplace.
How do I build a Seller Success Funnel?
An effective seller success funnel has 4 distinct segments: Acquisition, Activation, Revenues and Retention. It has to be admitted that this looks a lot more simple than it really is. Every segment of your seller success/retention funnel contains a number of smaller tasks.
This is the ‘Top of the Funnel’ (TOFU), where your focus is on seller acquisition. At this point, you work to attract top sellers by sharing the benefits of joining your marketplace. Seller acquisition itself involves a number of tasks:
- Defining your Ideal Seller Profile (ISP)
- Use publicly available information (or Silverback.ai!) on competing marketplaces and research and qualify individuals and brands that fit your ISP
- Prepare marketing materials like emails and paid social ads, that highlight the benefits of your marketplace, to engage the interest of sellers on other platforms and entice them to join
- Write seller-friendly T&Cs that are clear and easy to understand
- Set up a simple sign-up process that makes it quick for new sellers to join the marketplace
Your seller acquisition stage is usually handled by your Business Development Staff, and it involves many of the same features that you’re familiar with from a sales funnel.
This is the main ‘Middle of the Funnel’ (MOFU) stage, focused on making it as easy as possible for your ideal sellers to get started on your marketplace.
Activation involves helping new sellers through the onboarding process. This includes understanding how your third-party logistics providers and business tools work adding their products to your marketplace, uploading their product descriptions, visuals, and pricing information and making sure that their online shopfront is up and running without any glitches.
By the end of the activation process, your aim is for each new seller to be entirely ready to sell their products on your marketplace. Generally, your activation staff handle this stage.
Revenues is a small, but highly significant MOFU step. It bridges the gap between activating your new sellers, and retaining them as loyal vendors for many years to come. It demonstrates that your marketplace can succeed in bringing paying customers to your new sellers.
At this stage, you’ll assist your newly onboarded sellers to bring in revenue by making sales through your marketplace. It involves standing ready to troubleshoot any issues that a seller has with completing payment processing, fulfilment, shipping, and returns. At the same time, it caters to back-end tasks like tracking inventory and recording income and expenses as well.
Bringing in new sellers and helping them to begin making sales isn’t the end. There’s still one more stage – retention, which is the ‘Bottom of the Funnel’ (BOFU). This is where you encourage your new top sellers to stay with your marketplace. Too many companies don’t focus on retaining their sellers after onboarding them. It costs 5 times as much to acquire a new seller than it costs to keep an existing one.
To retain your top sellers, you’ll want to focus on proving the added value that your marketplace can bring to their goals of expanding and scaling up their business. To retain your top sellers, it’s vital to help them continue to bring in more revenue by assigning account managers, and providing additional business tools like fulfillment by marketplace, advanced analytics, and insights into customer behavior.
Funnel vision is the key to marketplace success
When you approach marketplace seller success in the same way as your marketing or sales funnels, you’ll end up with an ongoing process that brings in, onboards, and retains the top sellers that you need. It takes time and forethought to create an effective seller success funnel, but like the rest of your business strategy, it will save you time, resources, and most of all money in the long run. When you’ve built a good seller success funnel, you’ll have an ongoing process that you can run quickly and easily to attract and retain top sellers today, tomorrow, and every day after that.
Ready to jump in to our tips for the first stage of the funnel? Read the next article in the series here.