“I am convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” – Steve Jobs
The path to creating a successful online marketplace is seldom laid with flowers. It is an uphill climb that demands dedication, hard work and vision to follow through. But diligence and planning alone isn’t enough to create a successful business. You also need the proper tools for the job. Here is a little fact about a company that started off with a simple vision, an idea which bloomed into a viable venture a few years down the road.
Did you know that the famous car rental startup Getaround raised $140 million in fundings during the Series E deal, led by PeopleFund? Driven by the idea to positively impact billions, Getaround began their journey in May 2011 and nine years later they have successfully branched out to 100 cities within the US with plans for further expansion. Imagine that in 2011 who would have thought a car rental marketplace would achieve this kind of success?
Setting up a profitable rental marketplace can be a daunting task. But given enough time, the right tools and rental marketplace software you too can achieve similar goals.
Covid-19 managed to throw a wrench in the existing world order, but don’t let that stop you. By the end of this guide you’ll know everything there is to building a successful online rental marketplace. So, without further ado, let’s get started.
How to Get Started with your Rental Marketplace?
There are three key problems you need to address before you start a rental marketplace.
- Idea Generation– You’ll require an in-demand idea that solves problems and is valuable to your target customers. For instance, Getaround banked on the problem that every American needed a car to get around. But a lot of these cars were not used efficiently as they would often sit and collect dust in the owner’s garage. Instead of letting a car sit in the garage, they designed a way for car owners to generate passive income, while helping others in need, in an eco-friendly way nonetheless.
- Business Model– Some marketplaces charge a listing fee. Others offer premium services inside various subscription packages. Also, there are others that generate revenue based on a commission basis. Simply put, there are various ways you can generate income from your marketplace. However, by only choosing the right combination can you ensure a successful and prosperous future for your online venture.
- Platform– Whether you’re building an equipment rental marketplace or a home rental marketplace, you need a strategy.
Do you plan on building it from scratch, or do you intend to use a rental marketplace builder such as WC Marketplace or other alternatives? Both have their pros and cons and choosing one helps you set aside the appropriate development budget required for the project.
How to Build your Rental Marketplace?
Now that you have a basic idea of the work involved, let’s discuss how you can build a profitable rental marketplace. However, if you’re interested in learning how to fish for in-demand ideas, or choosing the right business model, you can read our other blogs on niche marketplaces or how to choose the perfect revenue model.
So, how do you build the perfect rental marketplace? Let’s find out!
Understand the Rental Marketplace Workflow
How does a rental marketplace operate? We cannot build individual components of a marketplace without knowing the requirements first. All marketplaces follow a basic workflow.
- Search- The user/customer searches for a listing based on location, availability and booking dates.
- Results- The platform lists possible options alongside fees, renting charges and other terms and conditions.
- Booking- Once the customer has decided, they pay a rental fee to the marketplace to rent the goods.
- Approval- The service provider now has the option to either approve or reject the rental request.
- Confirmation- After confirmation the customer proceeds to receive the said goods on a predetermined date.
- Payment- The marketplace can either pay the service provider as soon as the customer makes the payment, or hold the funds until the rentee has received the goods. The payment system varies among different marketplaces.
- Return- At the end of the rental period the customer returns the goods(or it gets picked up, depends on the online marketplace business model).
- Rate & Review- The customer and the service provider rate each other based on their experience.
This workflow will help you decide what features you need for your online marketplace
Consider user experience while Building a Rental Marketplace
You can have all the latest features in your rental marketplace but they won’t do you any good unless it is user-friendly. The human attention span had been shrinking over the past decade. A complicated UI (User Interface) will push your prospects to go elsewhere.
So when designing your online rental store, make sure the design is,
- Functional – Relevant to your product and contains all the necessary features.
- Likeable- Easy to understand UI with quick access to filters, cart, profiles and other important navigation features.
Know the must have features in a Rental Marketplace
Although every marketplace niche requires some unique features, certain features are common across most successful platforms
Your customers are accustomed to certain features and they expect your rental site to include them as well. Doing something different might seem appealing but can cause unnecessary challenges which could cost you precious customers. So for starters, stick to the basics and experiment once you’ve built a respectable customer base.
Here is a list of some of the most important features you should consider including in your marketplace.
- User Profiles- Profiles/accounts are an absolute necessity as without them you cannot rent goods to customers. They contain a customer’s personal information such as name, pictures, address, payment options and anything else the marketplace deems necessary. They also promote security and trust between the renters and the rentee.
- Easy Listing- It is very important to create a listing feature that is not too complicated. Otherwise renters won’t bother to create listings and without a respectable number of offers, they will look elsewhere for solutions.
The requirement of this feature depends on the kind of marketplace you’re trying to build. If it’s something like a car or bike renting marketplace, a map feature will enable customers to hunt for products in their preferred location.
- Wishlist and Advanced filters-
Although 50% shoppers choose retailers for their first purchase, they disproportionately gravitate towards online marketplaces for repeat purchases. A wish list enables them to bookmark those sellers. This makes it more likely for them to return for future transactions.
Also, 28% of online consumers prefer Amazon search to fish for products online, making filters one of the most commonly sought after features in a marketplace So, if you have a multitude of products, advanced filters enable your customers to search for items more efficiently.
- Booking Management-
Booking management allows a multitude of advantages. Firstly, it allows service providers to manage listings and make them available for future rentals. Secondly, customers can decide based on availability. As a result, providers won’t receive double booking which in turn reduces the cancellations, thereby improving the marketplace experience. For instance:
Sellers can manage appointments from the backend using a calendar:
Customers too can book appointments by directly clicking on the calendar from their perspective:
- Reviews and Feedback-
Reviews go a long way in securing the user’s trust. They are not buying an object, they are renting something which someone has already used. Reviews create an atmosphere of trust, ushering users to seal the deal.
- SplitPayments for sellers- Split payment allows you to disburse payments to sellers instantly. You don’t have to bother about paying them individually. As soon as a customer makes a payment:
You get your share:
And the sellers receive theirs as well.
- Dashboard Features-
A fully-featured dashboard allows you to monitor all of your service providers, track total transactions in a given day, check your earnings and much more. It is the single most important feature for any marketplace owner.
Similarly, a vendor dashboard allows your sellers to view products, booking dates and payment details all in one place.
How to set up your Rental Marketplace?
Now that you’ve done your research and come up with a revenue model and a list of features, all that’s left is creating the actual marketplace. Did you know that the cost of developing your own online marketplace falls somewhere in between $10,000 to $25,000? You would have to hire an experienced team of developers who will start working on the code from scratch. It requires a significant monetary and time investment, which can be scary when you’re just experimenting with a new idea.
An alternative to this is to use ready-made scripts or templates where you can just add/remove features with a click of a button. With the help of such software solutions you can build a fully-featured marketplace without having to write a single line of code. Now that the development side is taken care of, you can devote your time on more essential matters such as marketing, strategizing on attracting service providers and possible funding opportunities.
Plugins such as the RnB – WooCommerce Booking & Rental Plugin help you create a rental eCommerce shop, but not a marketplace. However, a simple software like WC Marketplace will enable you to provide the rental service to all of your sellers, starting with less than $100 dollars, which is nothing compared to your future profits.
Once you’ve activated both the plugins from your WordPress dashboard, vendors can simply log into their respective seller accounts and set up shop as they please. Custom and flexible rental periods, tax calculations, event calendars, buffer periods, WCMp does it all and for a fraction of the cost that you would incur to build it from scratch.
The internet is a collection of trillions of lines of code strung together. Website crashes are a common occurrence and although it’s not the end of the world, it can put a sizable dent in your revenue. You need a reliable support team to smite those errors ASAP. Choosing a good support team is as important as choosing the plugin itself. Take WCMp for example. We are renowned in the WordPress community for our prompt and reliable solutions.
So when you’re choosing multivendor software, always make sure that your developers have got your back.
How to Grow your Rental Marketplace?
The competition is fierce and if you want to compete online with the big/small fishes, you have to stay sharp.
- Competitor research is a prime way of learning what others are doing right and how you can do it better. This includes everything from promotional messages to features and exclusive services, such as, extended rentals, credit systems etc.
- With the millennial population on the rise, social media is where you want to be. Amazon has recently introduced a new Influencer’s program which goes on to show just how impactful social media like Facebook & Instagram are when it comes to marketing.
- Don’t shy away from flaunting positive 5-star testimonials. You and your sellers earned them fair and square. Why not show them to the world so that they can feel assured of the services you are providing.
- Engage with other users on online forums. Share ideas, socialize with individuals with similar interests. Time to bring out those networking skills of yours.
(These are just some of the ideas to grow your rental market place. We will be covering this topic in detail in a subsequent blog)
What are your options to create a rental marketplace and why should you invest in one?
2020 rattled the rental economy like never before. However, not all industries are suffering the same fate. Market research firm Mintel added that the outlook for rental companies “is actually fairly good”. If you want to start an online rental marketplace, furniture, home service equipment and car rental are doing fairly well.
The potential in renting used items is unprecedented. 2020 was a bad year, but things are starting to look up as people are adapting to this new world. Businesses are starting to pick up once again and with the help of our rental marketplace builder guidelines you shouldn’t have any trouble getting started.
Getaround, the car renting marketplace had a tough time convincing insurance companies. Instead of hitting the wall they went around it by talking to legislators who eventually helped pass AB 1871 in California. Don’t waste the momentum. Now is a good time as any to start your rental marketplace. You did all you could do. Now it’s time to take the final plunge!
Now that you have the necessary knowledge to build a rental marketplace, why not give it a try? Sign up here and get started right away!