What is a private marketplace?
A private marketplace or on-line exchange is typically a website that connects buyers and sellers together to buy, sell and trade products and services. Unlike a public B2B exchange (think Amazon Business or Alibaba), a private exchange is offered to a focused, qualified or invited set of participants. Sometimes these exchanges are hosted by industry consortiums allowing access to industry participants (e.g., HVAC or Plumbing industry exchanges that allow suppliers, distributors, installers, etc. to buy, sell and trade products, surplus supplies, used items, and services). Private exchanges may also be hosted by a single company looking to offer additional value to their customers.
Can you give me an example?
Classified ad software provides a surprisingly robust platform to host a private exchange easily and affordably. Classified ads are most often associated with C2C exchanges like Craigslist or Carsoup but the platform can easily be adapted for B2B use. A great example of this is an exchange hosted by Katun Corporation, a distributor of printer and copier parts and supplies to a large dealer base. This exchange allows printer/copier dealers in Katun’s network to buy and sell used printers and copiers with each other. Sales of these used devices don’t compete with Katun’s core business and the exchange provides an outlet to dealers to potentially move excess equipment to another dealer that needs it. For Katun, the goal is to improve customer loyalty and retention by providing a service that their customers can’t find elsewhere.
Should I build or buy?
Setting up a private marketplace can be done in a number of ways, all on the spectrum of build vs. buy. If you have a skilled team available and an end goal in mind, there is no reason a private marketplace couldn’t be built from scratch. On the other hand, a number of companies exist that provide surprisingly robust pre-developed classified ad software and a team of developers ready to install and customize a website just for you, for a price. Alternatively, many of those companies allow you to buy their pre-developed software but do the install and customizations in house, or hire an experienced 3rd party to do so. This is often the most efficient and cost effective option.
What are my software options?
Features: The core feature set typically includes an ability to register users, post listings, and manage the site via an admin panel. Depending on the software chosen, additional features may include multiple languages, currency conversion, paypal gateways (or similar), auctioning, and a shopping cart. Some software developers also sell a number of plugins for an even wider variety of features.
Currently available: A selection of available software currently available includes Flynax Classified Software, PHP Classifieds, ClassiPress, OSClass, Open Classified, and Classified Made Easy. These options range in price from free (OSClass), to a one time $399 (PHP Classifieds), to an annual $180 (Open Classified).
What else should I be looking for?
Besides features and cost, there are a handful of other things to consider that may sway your decision and save you time and money in the long run:
- Tech support — This is essential. It almost always involves a monthly fee, but usually for less than $50.
- User community — Look for a forum of other users. Does it seem like many other people use the software? Are they using it for something similar to your own plans? Remember that users typically visit a forum to complain about problems, not heap praise, so pay more attention to whether those questions are being answered.
- Plugins — If a company has released a large number of plugins to augment the existing software, that’s a good sign that they’re invested in the quality of their offering.
- Version updates — Similar to plugins, regular version updates signal that the software provider is active in addressing bugs, security updates, changing standards in programming, etc.
- Existing websites — Hunt down some websites built using the software (companies sometimes have a portfolio available for you to peruse). Do they match up with your own visions of a private marketplace? Look and feel matters.
How do I implement my private marketplace?
If your chosen software is a plugin for a platform like wordpress, it will have its own unique implementation. The software meant to generate a standalone website (or be deployed to a subfolder of your existing site) will all have a similar set of requirements. You’ll need a hosting service and associated database (think Siteground or GoDaddy). You’ll also need access to the host server via a tool like Filezilla to upload your software to the correct root folder. Once deployed, running the software installer typically guides you through the remaining configuration (connecting to the database, creating the correct data tables, creating an admin account, etc.). Once installed, the final steps will vary depending on your requirements.
What is my time and cost for implementation?
Initial implementation costs will vary depending on the specific desired features. Some aspects of the process can be rather time consuming (custom template design, additional languages), while others are less so (installation).
On one end of the spectrum, a simple implementation would require a small amount of design changes related to color and logo images. Only one or two types of listing categories would need to be configured (say printers, and toner cartridges) for users to post ads under. The site would use only one main language, such as English. Users would only be able to register one type of account, and all access to the various features of the site would be free. An implementation of this nature could potentially be done in under 20 hours by a team familiar with the chosen software.
At the more complex end of the spectrum, an implementation might require significant custom design changes to the original template in addition to the color and image changes. The site might have many categories for users to post ads under, all of which would need to be configured separately. The site might also offer multiple languages, requiring 3rd party text translation depending on the languages chosen and software selected. Users might have a choice between several types of accounts, with different privileges, and the option may exist to pay various amounts for access to “premium” features. The site might also leverage a number of plugins for monetized banner ads and a shopping cart or bidding system. A project of this nature might take a knowledgeable team well over 100 hours to complete.
How do I manage my new private marketplace?
Daily administration tasks will vary depending on the need for admin approval for each user activity. If your admin needs to approve every new account, new listing, and comment posted, a full time admin may be necessary to ensure users don’t wait long to see their actions approved. If user actions don’t require any admin approval, a part time admin could simply check in periodically to verify nothing inappropriate is going on. If you have users in a variety of time zones and a website that allows multiple languages, employing an admin in each sales region might be necessary. If the site acts as a medium for monetary transactions, someone with knowledge of the payment options (and associated tax concerns, etc.) will be needed.
Separate from daily administration, several other skillsets are needed, especially during implementation:
- A developer(s) experienced with HTML, CSS, PHP, and SQL to customize the initial template design to one more specific to your needs.
- A marketing team capable of communicating design criteria (colors, fonts, images) to the developer, and content (mostly text) to the administrator. They will also want to have a plan for marketing the existence of this new website to your intended user base.
- A customer service rep able to handle questions your new users might have while registering and posting their first ads.
- A translator, often a 3rd party service, capable of translating any content to other languages.
Give me an expert opinion.
The most important step in creating a functional private marketplace is choosing the correct classified ad software to fit the needs of your project. The options range from free, bare bones, open source frameworks like OSClass to true “Craigslist-clones” like PHP Classifieds, to modern looking, full featured offerings like Flynax Classified Software.
At Flexpro, we selected Flynax software for a fairly complex project with Katun Corporation (see the case study here). The Flynax software has an affordable base price ($195), modern looks and responsive design, a full range of useful features out of the box, multi-language and multi-currency support, over 50 available plugins (~$20/per) for adding additional functionality (advertisements, paypal), and a robust admin panel. Flynax also offers technical support for a monthly fee (~$55/month) and will provide custom development work at a reasonable rate. However, from our experience, they are not staffed to provide turn-key implementation services for things like project management, template design changes, or configuration, and you will either need to rely on a 3rd party or internal staff if available.
Do you have experience using classified ad software? Do you want to learn more about implementing a private marketplace? Please comment below and we’ll be happy to discuss your thoughts.