Building a multi-vendor marketplace is almost like building two individual businesses. You need different strategies for bringing in sellers and buyers. You also need to retain them by ensuring that a seller will likely find customers and make money – and that potential customers will likely find what they’re looking for. This is called liquidity.
If an individual user is likely to reach their goal on your marketplace, you've reached a good level of liquidity.
Liquidity is arguably the single-most-important marketplace metric. The best way to achieve liquidity is to focus on a small niche. And expand when (and only when) the business starts to become successful in the first niche.
Consider focusing on one geographic area to start, and then expanding into new markets from there. This is a playbook followed by numerous successful multi-vendor marketplaces, from Uber to Taskrabbit, both of which started in the San Francisco Bay Area.
For a marketplace to be successful, buyers and sellers must have trust. Both in each other and in the platform.
Establishing trust is hard for any new business, but even more so for multi-vendor marketplaces. Buyers might be spending a lot of money, and sellers could be sharing valuable assets like their homes (Airbnb) or cars (Turo).