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Mom, I’m creating a food marketplace
Aug 6, 2024
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Contents
The global demand for the B2B Foodplace Platform Market is projected to reach a market size of nearly USD 249.21 billion by 2032, from USD 44.49 billion in 2023, at a CAGR of 21.1% during the study period 2024-2032.
The essence of marketplaces in foodtech is to directly connect product manufacturers or small suppliers with end customers, reduce costs, reduce added value, provide an opportunity to build personal communications, provide tools for analytics and marketing. The users of such marketplaces are both the b2b segment (food suppliers and restaurants, hotels, shops) and b2c (farmers and consumers).
What is the meaning of Food Tech?
In fact, if you love food and love technology, then you already know what foodtech is. But in fact, it hides a lot more directions behind it.
Online stores are growing like mushrooms these days. This is due to increased interest from buyers. Small and medium businesses are paying more and more attention to complex solutions such as marketplaces. I am also pleased to note that retail stores, grocery chains and small businesses are showing great interest in digitalization and automation of their processes.
Convinced! I want my own marketplace
Let’s first take a look at how it should work, what you should think about at the start, and then delve into the chips that you should pay attention to.
What will your business be like?
There are several models on which platforms work:
1
Procurement, settlements, logistics. It presents a range of its suppliers, maybe under its own brand, maybe under the manufacturer’s brand. And yet, all responsibility and processes will remain with him. From the point of view of business organization, this is wiser, but for end users it is more convenient. This model is now the most popular. And the most important and difficult thing in it is logistics. Let us give you Amazon as an example.
2
The marketplace acts as a showcase. It provides a platform for communication between the parties, helps and provides tools for mutual settlements, document generation, evaluations, marketing and analytics. This model is Aliexpress, Farfetch, Asos.
3
There are also combined models. For example, in food tech, a marketplace can create intermediate logistics centers, bring orders to them, and leave the last mile delivery to the end customer.
Each model has pros and cons, depending on the audience. For example, in the second case, suppliers need to monitor product quality in order to justify the trust of big players who provide a platform for sales. Therefore, as you understand, it is important at the very start to know your target audience well.
The first model is more expensive to implement, longer and more complicated. But if everything works out, there will be a brand, the market share will increase, and hence profits.
What to prepare for when you create your marketplace?
Let’s now analyze the tasks to be solved. We will do this using the b2b segment as an example, it is more complicated, but many scenarios are applicable for b2c as well.
Choose a monetization model
This can be, for example, a percentage of transactions or a subscription fee. It, in turn, may depend on the categories or volume presented. With a percentage of transactions, splitting payments is perfect. We talked about them in more detail here. What other options are there:
Sales commission
Selling fees are one of the main sources of income for a site like Amazon. This part of the company’s monetization model includes the following fees:
Listing fee
The company applies this monetization model by charging a small fee for each standard identification number listed on the platform.
Marketplace Pulse reports that approximately 2.4 million sellers currently have an item listed for sale on Amazon’s e-commerce marketplace.
Advertising
You can allow providers to create and place ads on their site.
Subscription payment
For example, the Amazon Prime program, where the retailer offers consumers to subscribe to the platform and get a lot of benefits: access to special offers, free two-day shipping for most products published on the e-commerce platform, and unlimited movie streaming.
Feedback system for goods, supplier, buyer
By introducing reviews and ratings, you increase the credibility of your site and sellers. With this feature, consumers make more informed purchasing decisions based on user feedback. This allows merchants to reduce product returns and improve customer service. This means they will return to your platform more often.
Catalog and search
When building an online marketplace like Amazon, it’s important to be able to find products and sellers using filters and categories. At this stage, a good UX/UI designer and business analyst is essential to think through all the details. It is necessary to give consumers the opportunity to specify a number of parameters, for example, the name of the product, color, size, price, manufacturer’s name, delivery details.
For the convenience of users, you can integrate the autocomplete function into the search. By the way, given that people often make mistakes when entering a query, it is customary in ecom to show +/- suitable search results anyway.
The ability to compare products belonging to the same category in the table will also affect user loyalty.
Dynamic pricing
Consumers are attracted to suppliers who offer discounts or special offers on a certain product or when purchasing a certain volume. Therefore, they regularly have to sign enterprise-level pricing agreements to ensure market price stability for any product and price transparency in the b2b food sector.
But, nevertheless, on the platform, many factors can influence the price. For example, simple personal discounts, volume discounts, discounts for certain balances, time. This is the perfect way to get rid of items that are about to expire. Or when you need to sell all the pastries in the evening.
I am talking about this now because it is very important to take into account the pricing system on the site and put a huge number of factors into it.
Also, in the case of pricing, it is worth considering creating a loyalty program, even if you don’t have it yet, when scaling, you will want to use it in the future.
Beerpoint
In this project, we digitalised the program invented by the customer and helped to make the first step along the path to business transformation.
Processing and placing orders
You need to be able to handle different formats for ordering. It is necessary to make life easier for employees in the purchasing departments. Therefore, it is worth accepting orders both by email, and in excel, and using api, and process different data structures. To do this, most likely, you will need some kind of flexible custom designer to easily adapt to each customer.
The same goes for suppliers. They need a convenient admin panel so that they can quickly manage assortments and balances. But not everyone can sit in the admin panel, so they also need tools for unloading excel, api. It turns out that a custom constructor is needed for both sides.
Orders, their statuses
Obviously, we need a section with orders, their statuses, and the ability to download documents. Unforeseen circumstances can always happen. For example, they made an order, but in fact there was not enough goods, something went bad. It should be possible to resolve such conflicts within the interface.
Both parties should be able to manage legal entities, points of shipments, deliveries. Often there are too many of them. This must be taken into account when placing an order. After all, it can be immediately formed at several points, for different legal entities. In general, a rather complicated interface comes out with such a case.
Shopping cart
It should always be at hand. No need to make a beautiful basket on a separate page. The basket is a tool, it should be convenient. When we add a bunch of things to the cart, we want to keep track of the amount, delivery date in a conspicuous place, and not search the entire site with a magnifying glass. Ideally, make it a pop-up window on the right, which opens on click: they went in if necessary, did something, and hid the window back.
How to make a cart and authorization in an online store
All about creating user-friendly and harmonious websites that help the user experience the pleasure of shopping rather than negative emotions.
Recurring Orders
In purchase history, we want to leave private comments: on goods, on an order, in order to remember what to correct next time. When repeating an order, we take into account that something may no longer be available or in the required volume. So, you should immediately offer a replacement.
Recurring orders can be placed manually, but it’s better to let it be done automatically if we understand that we regularly buy the same thing. This mechanism can be developed more widely in the form of “predictions”. For example, remind the client in advance: “They say you order the same thing every Friday. Here, hold the formed basket. Will you take it?” And then with post-moderation to place an order quickly.
Responsibility for returns
A fairly understandable operation from the point of view of an ordinary user. But how will it be implemented in the case of a b2b marketplace in food tech? Of course, there may not even be conditions for a return if the products are perishable. But if a return is possible, you should consider at the start who takes it, how to return the money, who is responsible.
Residue control
We must provide tools for the operational management of balances. In addition, in the process of placing an order, put balances in hold so that it does not happen that 2 buyers simultaneously pick up the last units. We must be ready for large orders, for combining leftovers. If, for example, a customer purchases 2 tons of tomatoes, the option to “order from multiple suppliers” is needed if one does not have that amount. This means that you will have to combine the logistics of these suppliers, share payments between them, and all this should happen automatically, of course.
Schedule management of deliveries, orders
Both parties must understand their logistics: when and what is needed, who delivers it and where. This is important in order to imagine volumes in advance, to learn about the delay.
That is why, during the formation of an order, it is necessary to provide the client and the supplier with the opportunity to plan delivery, shipment, for example, using the “As soon as possible” option, or to select a slot by date/time.
Payment processing and document flow
We can have a lot of payment methods. Yes, someone pays by card, someone by bank transfer and with deferred payments, someone will generally pay in cash. All this needs to be considered, taken into account and provided to the parties to check online, to understand the status of the debt.
Plus, we must be able to automate document flow between the parties, issuing invoices, depending on the country, and registering accounts with tax authorities. This is a huge piece of work. Integration with electronic document signing services like docusign.com fits well here.
Data Analytics
Let marketers track consumer behavior, track unique daily users, sessions, LTV, and explore audiences by age, country, interests, and more.
If they can track online transactions in real time, generate sales reports for different periods, then they will effectively identify products with the highest and lowest demand. Accordingly, they will be able to influence the decisions of users about the purchase.
Separation of roles
Who is responsible for your finances, who is for ordering, who is for marketing. Or maybe you want to personally confirm all operations — this is easy to implement using the separation of roles: some have access to all operations, others have access only when they are confirmed.
Knowledge base wiki/support system
It is in the wiki base that all roles, their capabilities and access levels should be registered. It is needed so that direct users understand how everything works, and not just those who came up with the idea to implement software. Creating good documentation once can save you a lot of time in the future.
And support should help users deal with organizational issues, such as “why the truck didn’t arrive”, “where is my goods”, etc.
Top 3 additional features to improve your marketplace
Shopping/Wish List
If you implement this feature in the platform, allow consumers to save the products they would like to purchase in their favorites list. They will be able to track the availability of products from their personal accounts, and the wish list will help sellers improve customer satisfaction and increase conversion rates.
Multiple filters
Enable customers to sort through a large number of goods to find the required item. Nowadays, customers want to customize their orders by setting parameters in the search that suit their tastes and preferences. Allow them to select products not only by category and price range, but also by combination with other products, location and brand. This feature can increase the average sales by up to 26%.
Fashion House
We have built an e-commerce solution from the ground up, offering great potential for the future.
Social media sharing
As we do more of our shopping online, we also want to share what we've bought with others, whether it's a recommendation or just to show off. Many brands also use influencers to promote their products. That's why social media buttons on product pages and a floating share bar are essential features for any marketplace owner looking to increase reach.
One click order
To make a purchase by simply clicking on the order button, users need to enter the required payment and shipping information only once. In the future, it will be used by default. By saving consumers time, merchants manage to significantly improve the online shopping experience.
Personalized recommendations
Personalization is the key to better customer service and more sales. Adobe surveyed thousands of consumers and found that 54% of participants are most likely to want a personalized shopping experience.
To offer personalized recommendations, Amazon uses machine learning algorithms that are trained to analyze large amounts of historical user data. By identifying products that are frequently viewed, searched for and purchased by a particular user, the company provides customized recommendations in accordance with the preferences of the audience.
In this long article, I tried to just offhand go through the painful places that many people miss at the start of writing a technical specification or the idea of an MVP. If you dig deeper, you can devote an entire article to each item. But I’m not sure that someone will read so many letters. Therefore, if you need a detailed consultation on the development of a marketplace, or you have a cool idea and you need the development itself, write to me!
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