Moneycontrol
May 15, 2017 01:35 PM IST | Source: Moneycontrol.com

1001 Startup Ideas - Marketplace Management Tool

The sellers who sell products on e-commerce platforms can use this tool to manage all the orders, shipments and inventory through the tool.


What is the idea? 

This weeks 1001 startup idea is to establish marketplace management tool for sellers on e-commerce platforms. The sellers who sell products on e-commerce platforms can use this tool to manage all the orders, shipments and inventory through the tool. The same tool will also create invoices and prepare the shipment details.

Market Definition

The e-commerce market is on the rise. Although there has been a growth of electronic commerce market, there is still a lot of room left. According to Statista, in 2016, global e-retail sales amounted to 1.9 trillion U.S. dollars, and projections show a growth of up to 4.06 trillion U.S. dollars by 2020. Statista also estimates that in Asia Pacific, e-retail sales accounted for only 12.1 percent of retail sales in 2016 and only 1.8 percent of retail sales in the Middle East and Africa. These numbers further show the growth opportunities in the sector.

It is tough to estimate the exact number of sellers selling products on e-commerce platforms as one of the biggest marketplaces in the world; Amazon does not disclose the number of the sellers on its platform. But according to an estimate, the number of sellers on Amazon In strong markets like India have already crossed 100,000. Web retailer conducted a survey of sellers on marketplaces and found that almost 63% only sell on marketplaces. The same survey stated that 72% of the sellers surveyed do not use a management tool for their business. The study also found out that around 50% of the sellers are looking for new management tools for their business.

Competitor Analysis

Marketplace management tools have been there for a long time. But with the steep increase that e-commerce has shown in the last few years, there is a huge demand for this tool more than ever. Some of the tools prevalent in the market are AuctionSage, ChannelAdvisor and Zoovy. In addition to these,  Zenstores has opened up in UK recently.

Pain Point & Target Audience

The target customer market for this business are the "sellers on e-commerce marketplace." There had been a steady growth in the number of sellers and it Is now easily proved that sellers are able to make more money on e-commerce marketplaces compared to offline stores. This is because of minimalistic or very less capital expenditure for opening and maintaining brick and mortar stores.

According to fortune.com, the number of sellers using the service grew more than 50% in 2015 after a 65% rise a year earlier. It also stated that although Amazon stocks and sells its goods online, outside sellers now account for over 45% of the total number of items sold on Amazon.

According to a survey by Webretailer, 29% of the sellers it surveyed that used a management tool weren't satisfied with it. This shows that there is a latent demand for a marketplace management tool.

Value Proposition

The customer will be able to track and manage all the orders, inventory, invoices and shipments through one tool. This will help sellers to streamline the process, thereby saving cost and time . It will also help them to provide better experience to the buyers and  creating long term customer satisfaction.

Business Model

This startup will have a subscription based model providing different levels of subscription to its users. The plans can be on the basis of

  1. features used by the user, for example, the subscription cost could be lower if the user does not want an inventory management tool as part of the software; and


  2. the scale of operation of the user, for example, the subscription fee would be lower for a seller shipping 100 good in a month from a seller shipping 1000 goods in a month.


Way to market

The first step would be to prepare software which is seamless in its approach. The startup could consider tying up with smaller marketplaces in the beginning because small marketplaces are looking at offering benefits to its sellers to further attract them to their platform. Once the startup penetrates in to that market, it could start approaching the sellers of bigger market places directly.

Milestones

The startup should aim at reaching atleast 10,000 sellers in the year two of operation. Even if it offers a minimum plan of ten USD per month, it could reach a potential revenue of USD million in the second year itself.

Investment Needed For Prototype

For testing & building the prototype, pitch for raising 100K USD from angel investors or incubators. Founders could reach out to incubators like alchemistaccelerator, Tie Launchpad and Accel prise. The startup should keep its team lean, with the primary focus on developing a seamless software and marketing its product to the sellers.

Team Capability

You would need to have a tech expert to design and create the SaaS software. It would be great to have other co founder with past experience in B2B sales and marketing. In addition to this it will be advisable to find a co founder with experience in scaling B2B enterprise SaaS products.

Investors / Expert Take

According to tontunguz.com, USD  one billion was invested in early stage SaaS startups by November 2016. The investor appetite remains strong for SaaS businesses and if one manages to move to product market fot swiftly, it could garner attention from investors. In case you are looking at scaling or launching this venture, you can apply for our virtual acceleration program Excelrate on the Yostartups website; it will help you in streamlining and structuring your startup idea. We have limited scholarships and discount packs for deserving startups, depending on the strength of your application, you may qualify for a discount.
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