You've made the decision. You're going to launch a marketplace. The decision itself may have taken months, featuring lots of industry analysis, scenario planning, and revenue projections, along with meetings and long discussions, perhaps some of them heated. Now you've determined that a marketplace is the best path ahead, whether for growth, customer experience, supply chain agility – or all of the above.

So what's next? Preparing for launch will bring a host of new marketplace‐specific decisions, challenges, and opportunities. The process may seem daunting. But you shouldn't have to face it alone. For this, it's important to find the right marketplace partners, including a technology provider that will lay out best practices and provide continuous guidance throughout the process.

We delve into our own detailed methodology for new customers later in this chapter. But for now, we walk you through the key decisions and actions you'll undertake during the crucial period before marketplace launch.

We like to envision each marketplace as a temple. It's a physical structure that harbors a community, one drawn to both its values and offerings. Think of the strategic vision of the marketplace as the roof of the temple. The operational decisions each organization makes support its structure. Its cultural values, including change management, firm up its foundation. And the people it attracts – those running it as well as the community they foster – bring it to life. Together, all of these elements create an edifice that's solid, dynamic, and primed to grow.

Building this temple is no easy job. But if you take it step‐by‐step, the work gets done. Hundreds of companies with marketplaces can attest.

In this chapter, we focus on the fundamental work of building the temple. It's very much like preparing a startup. In many ways, it is one. You are launching a new business. The work includes:

• Assembling the steering committee. Who will ensure the marketplace is linked to the core strategy of the enterprise? Your steering committee should include top leadership, with representatives from finance, sales, and other key areas of the business.
• Recruiting expertise. Whether outside consultants, experts from your technology provider, or both, the marketplace team needs the support of people who have done this before. The team also needs leaders for technology and business. They usually come from the inside.
• Shaping the brand. This means digging deeper into where the marketplace fits within the broader strategy, and – importantly – how it integrates into the customers' journeys. This informs and molds each company's marketplace.
• Aligning ground rules to your core business – and establishing new ones where needed. Each marketplace must, of course, follow local laws and regulations. And it must establish norms for sellers, from delivery timetables and quality guarantees to return policies. This can be complicated. But many of the options, thankfully, are included as defaults in marketplace software.
• Crafting the Minimum Viable Ecosystem (MVE). It's vital to get the marketplace up and running sooner rather than later. Like the concept of a Minimum Viable Product, your marketplace needs an ecosystem of sellers, customers, and partners that is big enough to launch while still remaining agile. The structure must have what it needs to sustain itself in the first months, but with plenty of room to grow.
• Recruiting your key sellers. They should fit your marketplace's DNA and provide selection and quality that offers value to customers. Some of the work is done by seller recruiters/business developers, and some platforms may have seller partnerships already available to consider. But there are also increasingly powerful matchmaking tools that line up rosters of vetted sellers.

There's much to do, but there is also lots of support from a growing ecosystem of technology, experts, and toolmakers, all of them focused on building successful marketplaces.

Assembling the Team

The first order of business is to gather the brain trust, most of them already involved in making the marketplace decision. This is the group that will direct and oversee the building project ahead.

Who should be sitting at the table on day one? The most important person – and perhaps this is you – is the CEO. Far more than a new online channel, a marketplace is a strategic initiative that involves, and can reshape, the entire company. It requires strong support from the very top. The initiative is much more likely to flounder, both for footing and capital, if the leadership treats it as a niche or IT project. “The board needs to be on board, and especially the CEO,” says Marius Lückemeyer, managing director of Technology, Omnichannel, and Marketplace at MediaMarkt.

If the CEO is not directly involved in the organizational phase, he or she must at least be in the loop, and represented by a close associate.

The head of digital, or eCommerce, has probably been the one championing the marketplace, and should naturally be included in the marketplace's executive team. Better than anyone else, he or she understands where you stand now, in terms of online traffic, assortment, sales and customers, and the changes that are coming.

Someone representing the buying/merchandising team is also essential. This colleague represents the domain most likely to feel threatened by the introduction of the marketplace. For years, or even decades, procurement, sourcing, and merchandising teams have honed your company's offerings. These curators have placed their stamp on the shopper experience. For retailers, the goods for sale reflect the buyers' knowledge, judgment, taste, and negotiating smarts. For distributors and wholesalers, the buyers have worked hard to anticipate what customers will need, and when. They've had a big hand in the efficiency and success of the business.

But for many companies, these teams need to reimagine the job from the ground up. For most of their careers, many buyers have focused on the question of space, in both stores and warehouses. It's been a constraint, but also, for some, a competitive advantage. These professionals have chosen the optimal selection for their allotment of space, and many have long measured their success by revenue per square meter. Removing space from the equation, as marketplaces do, can feel immensely threatening. It can feel like they're losing important levers of control as more of the selection work is distributed to sellers and customers. It must be clear, however, that their interests are represented, and that their know‐how remains valued.

Here, the chief of merchandising or procurement plays a crucial role. This executive functions as an important go‐between. He or she makes sure that the buyers' concerns are understood and appreciated by the top strategy team. The coming marketplace can spell opportunity for this team, and this person will play a central role in communicating the possibilities in the changes ahead. We'll dig into the specifics in a few pages. The point for now is that someone representing the buyers must be at that first meeting and the others that follow.

Every bit as important as the procurement team are the people at the other end of the funnel: sales. The new marketplace is poised to convulse the sales team, changing its day‐to‐day activities, its metrics for success and, in many cases, its compensation. This is especially critical for B2B marketplaces, where changing the behavior of established sales channels – from sales representatives to telesales – requires a lot of work.

Many on the sales team can (and will) feel threatened by the marketplace, where their own offerings will suddenly be competing with third‐party sellers. Here, the fear of cannibalization is often palpable. Any discouragement of the sales team is poisonous, and can sink the bottom line in short order. So, of course, the team's chief must have a place at the table as the marketplace takes shape.

It is also important to include a leader from the sales team. This is especially critical for B2B marketplaces, where changing the behavior of established sales channels – from sales representatives to telesales – requires a lot of work.

Then there's marketing. To date, the marketing chief has no doubt been grappling with a host of challenges from the digital economy. How to market the eCommerce site versus brick and mortar? How to effectively leverage oceans of customer data and maintain growth even as digital marketing costs skyrocket? The marketplace adds vast new layers of complexity. The team must have a strategy from the get‐go on how to market the marketplace, how to promote and support sellers, and how to incorporate its offerings into the company's own.

In traditional company hierarchy, human resources was often relegated to an outer circle, somewhere down the same corridor as accounting. Both units ran processes, and kept the company in step with regulations. But in the modern economy, human resources (HR) has stepped into more strategic roles. In preparing for the marketplace, the inner team will have to include an HR chief. This executive will oversee hiring for the marketplace and also lead workers toward different metrics and incentives. The legacy eCommerce team will, in fact, be operating in a different environment, and HR will have to set a new framework for it, both in skills and rewards. (In this effort, we recommend merging internal and external team members.)

Finally, at least two people at these early meetings should be in charge of the two key teams to build and, eventually, operate the marketplace. One builds the business side, the other focuses on the technology.

Picking the right people for these leadership posts is crucial. It shouldn't boil down simply to what they know, or whether they happen to be in line for a promotion. The people must be adaptable, and good problem solvers. There are going to be all kinds of surprises along the way. They have to be ready for them, ready to learn from them and, if necessary, to change course. The key, says Tom Kraus, who heads up the marketplace for the grocery wholesaler UNFI, is to pick out people who can adjust quickly and work well within teams. “These are not trainable skills,” he says.

These two managers – one heading tech; the other, the marketplace business – should understand each other's domain because they're interwoven. These managers are most often promoted from within. It's important, after all, to understand the culture during these times of change, and to have connections with the stakeholders, including colleagues.

That's the core group: CEO, heads of digital, procurement, sales, marketing, HR, and marketplace tech and business leads. There are plenty of others who will be lassoed in, perhaps within days. There's legal, accounting, international, quality control. As we've been saying, a marketplace can involve virtually every aspect of a company's operations and strategy. But for day one, gathering together that core group is a good start.

Defining the Operations Teams

Early on, at least two or three months before going live, the management team should be ready to name the executive to run the marketplace. This should be a business leader who is ultimately accountable for the marketplace's success. It is his or her responsibility to take an active role in evangelizing and shaping the marketplace strategy within the organization and with business partners. This executive sponsor ensures the marketplace is given a dedicated team and the ongoing investment to unlock its full potential.

Most of our customers place two teams under this leader. One of them recruits sellers and on‐boards them; a second oversees the business and technology of the marketplace. These teams, in addition to managing the marketplace once it is live, will have a big hand in bringing it to market.

These teams don't have to be large at the start. Madewell's casual fashion marketplace, for example, set out with only eight individuals. Three of them, says Chief Marketing Officer Derek Yarbrough, focused on management from a buyer's standpoint. They were to choose the brands, lay out the strategy, interact with the sellers, and set out the course from a product perspective. (Some retailers, he notes, split off a separate team for the outreach work. This approach helps your marketplace seller base and assortment grow more quickly after launch.) Madewell's second unit focused on the nitty gritty of account management, from on‐boarding sellers to invoice reconciliation and troubleshooting. These teams continue to grow and evolve as the marketplace expands.

For startups, the initial teams can be tiny. Australia's B2B marketplace, TradeSquare, started with the bare minimum. “We hired a few people who worked for sweat equity,” says co‐founder Nati Harpaz. “And we got it to a growth stage quickly.”

Establishing Expertise

There are many possible approaches to marketplace construction. But they all must include experts who have had a hand in building and launching online marketplaces. After all, while it's axiomatic that a company knows its business and its customers better than anyone, that knowledge alone is not sufficient for building or running a successful marketplace. Those with experience can help anticipate and prevent many of the roadblocks that can cause problems during implementation and beyond. Even the most seasoned eCommerce expert will not be able to anticipate all of these challenges if they are on their first marketplace journey.

It might help to return to our temple analogy. Building the first one is extremely hard and time‐consuming. Nearly 1,000 years ago, just a few miles south of our Paris headquarters, builders experimented with a bold new approach as they refurbished a wing of the Abbey of Saint Denis. Using pointed arches and rib vaults, they found a way to lift the building skyward. This opened vast spaces for stained‐glass windows. Gothic architecture was born. This revolution shook up the status quo in its industry much the way online marketplaces are convulsing commerce. It featured different methods, opened new possibilities, and required a new type of expertise.

In the following decades, the experts from Saint Denis were in high demand as new Gothic building projects sprouted around France, in Chartres, Paris, Reims, and Amiens. It was certainly a lot faster and safer to hire the experts than to build these vast, spacious Gothic temples by trial and error.

Outside experts have experience. Often, they bring specific knowledge of the marketplace landscape that the company tech team may lack. So they can speak authoritatively to the marketplace team about industry trends. They can run surveys. They can point to the value chains that are evolving. Who's buying what from whom? And importantly, why? What patterns do they follow? What triggers do they respond to? Answers to these questions can support an organization's expertise in its own business and feed the positioning for the coming marketplace.

A good number of our customers have been happy to enlist outside help from consultancies experienced in marketplaces. Many have foundational knowledge in system integrations. They've installed big, transformative software, such as enterprise resource planning (ERP) or large eCommerce engines. In recent years, they've built an expertise in marketplaces. Quite a few of them get their training from our customer success teams.

When consultants join a management team for a marketplace roll‐out, they occasionally meet a bit of resistance. In the case of our customer success teams, they arrive on day one with checklists, prepared workshops, and schedules for deliverables. Customers can sometimes feel that they're being shepherded along a narrow path. They know their company better than anyone, including us.

That is certainly true. Yet marketplaces behave very differently from traditional lines of business, even including eCommerce. Our teams focus on this, relentlessly. They have a clear idea, backed by lots of data, about what works and what leads to trouble. While we can and must adjust our customer success team to the needs and culture of the customer, there are certain areas in which we have to push, strenuously, for the customer's best interest.

Both the challenge and opportunity, almost always, centers around change. The natural tendency of an enterprise that has experienced success over the course of years, or even decades, is to attempt to add a marketplace without disrupting the status quo – the brand, people's jobs, relationships with customers and suppliers. A successful marketplace, however, demands change and is often uncomfortable. As we'll see through this chapter and the next, disruption is a necessary constant as companies advance into the marketplace economy.

Mapping Out the Shoppers' Journey

How will your customer experience the marketplace you're building? It's paramount at this stage to figure that out. For this, industry experts often deploy digital models of the marketplace, with the hypothetical customers represented by different types of “personas.”

For a construction marketplace, for example, one persona might be a 60‐year‐old male living on the East Coast of the United States. He's been in construction his whole career and makes decisions based on personal relationships and trust. A second type might be a digital native who does almost all of her business on her phone. She values efficiency and pays attention to data, including ratings and prices. A third archetype could be a merchandising or procurement chief, someone who needs a tight grip on spending and wants to scope out the entire market. Hobbyists could constitute another persona.

Each of these types have different agendas, with varying needs, timetables, aversions, and pain points. It's vital to anticipate them. How bothered are they by two‐factor authentication? Do they hesitate before clicking on a seller that takes a day longer to deliver? Consultants and software providers, including ourselves, often have relevant data on hand.

Identifying the personas that the marketplace will serve is just one step in the research process leading up to the launch. It's also critical to study and optimize that shopper's experience. Where do the customers land, and how do they go about finding items, creating a basket and placing an order? What happens at checkout and after the sale? Is there a follow‐up survey? What's the procedure for returns? It is necessary to chart the entire customer experience, end to end, making sure that it delivers seamlessly to the customer.

Achieving a smooth and intuitive user experience is crucial to retaining and growing the customer base. If customers are frustrated by a site, whether it's hard to navigate, unresponsive, or requires too much clicking and data entry, they leave and never come back.

So be sure to test the marketplace experience on newbies. Simply try it on people, from focus groups to your own board of directors. If they struggle, even a little, fix it.

Figuring out the brand can illuminate the road ahead.

Building the Brand

The most fundamental decision when launching the marketplace initiative is figuring out how it will be seen, thought of, and talked about. What will be its brand? Amazon's brand is clear enough. It's the everything store. By contrast, the highly curated fashion marketplace Verishop tilts toward emerging boutique brands. Many others are in the middle of the curation spectrum, offering everything, but only in their niche. The brand for Parts Town, the industrial kitchen supplier, is anchored in the guaranteed quality of OEM replacement parts.

A lot of this brand analysis, no doubt, was carried out before making the decision to establish a marketplace. To sell the idea to the executive team and the board, and to get funding for it, the marketplace backers had to make presentations about their plan, complete with revenue projections, market positioning and, often, a name. But we frequently find that customers return to these same questions with far greater rigor when they transition from selling the idea to actually preparing the marketplace for launch.

The positioning of a new marketplace is crucial. It's a new creature in a fast‐growing ecosystem. Each must have its goals and vision clearly established. Some marketplaces aspire to be powerful in their home markets and extend range or geography. Others simply want to remain essential within their core markets by providing enhanced service and selection.

What place will your marketplace occupy within that fast‐growing world? What's its name? How will people describe it to each other in a text? Those are vital questions to answer, and the sooner the better. One useful exercise is to try summarizing the marketplace's vision and ambition in a single sentence. “I want to be the one‐stop shop for hospitality,” for example, or, “This marketplace will own the cocktail hour, and everything associated with it.”

It's important in this pre‐launch stage to start thinking about a marketing plan for the new marketplace. The marketing and customer acquisition plan must reach out to two groups of customers, spreading the word to those you already have and, at the same time, building awareness of the marketplace and its offerings among new audiences. These are two different pathways, and now is the time to begin considering the brand with marketing in mind. (We discuss marketing strategies for launch and subsequent growth later in Chapter 5.)

Conceiving a brand for a marketplace can be tricky because it often involves a company expanding from its specialty. Sometimes the legacy name does not communicate the new reality. Our advice in most cases is to stick with the brand anyway. Chances are you've spent years and lots of marketing investment building the brand. Customers know it, and they trust you. Now is not the time to play hide and seek with them.

We know this from experience. A good number of our customers have been tempted to launch marketplaces under a different name. The idea is to protect the brand from service or quality issues that could arise with third‐party vendors. This rarely works. The company's brand and the user experience associated with it are invaluable assets when launching a marketplace. Your old customers are likely to be your first marketplace customers in the crucial months after the launch. You need them.

And what if the new marketplace at the familiar URL disappoints the longtime customers, if third‐party sellers underperform and tarnish the brand? It's your job to make sure that doesn't happen. The best way to reduce the reputational risk from sellers is to choose them carefully, establish clear performance and quality guidelines, and manage them effectively.

The Minimum Viable Ecosystem

Yes, fixes can be made. But just the same, it's very important to launch a marketplace positioned to register success from the very beginning. It doesn't have to be perfect. But it has to stand on its own. For this, it requires a certain scale. It's a Minimal Viable Ecosystem, or MVE.

The name is derived from the tech world, where a similar concept – the Minimum Viable Product, or MVP – is widely recognized as a simple but functional prototype, one that will attract enough users to provide feedback on what works and what's needed. In our industry, which operates on the mathematics of networks, this prototype is to a large degree a function of scale. A marketplace must be of a certain size – with a requisite number of sellers and products – to hold its own, giving a good number of customers what they're looking for.

That's where the MVE comes in. If the marketplace fails to meet that scale from the get‐go, disappointed shoppers will bail, some of them never to come back. It also grows harder to attract eager sellers if a marketplace sputters out of the gate, further dampening the interest of shoppers. “I would say we scrapped everything that was not needed to deliver a basic, yet high‐quality online customer journey. Specifically, this meant incorporating the marketplace seamlessly into the web platform up to the checkout and implementing automated backend processes early on to ensure scalability of the system,” says MediaMarkt's Marius Lückemeyer.

A central question for the team building the marketplace is where to expand. Presumably, in the early scenario planning before committing to a new marketplace, the team has laid out the lines of products the marketplace will offer. Which of those new products constitute the core – the goods you'll sell from the get‐go, as you launch your MVE?

One useful approach during this phase is to place all of the work ahead into three boxes: green, yellow, and red. The green boxes are musts, each of them absolutely necessary for getting an MVE up and running. The steps that can wait go into the yellow box. And the red? Come back to them once the marketplace is up and running. Some might eventually fit. Others won't.

When the Germany‐based sourcing platform, Conrad Electronic, was preparing its marketplace, its goal was to become the one‐stop shop for technical supplies for B2B customers. The company's catalog at the time included some 800,000 items, or SKUs. The objective was to expand that to millions of products. Just three months after the launch of the marketplace, business customers had access to over 1 million product offers. (The company soon rocketed past its original target, and at last count was offering 7 million products.)

In many industries, the rule of thumb is that 80% of the purchases come from 20% of the suppliers. Those are the ones to focus on first – though huge opportunities await as the marketplace expands after the launch.

The key for this initial stage is to get the Must Haves, and to postpone everything else – the Want to Haves – no matter how tempting, for later. It's easy to say. But in these early stages, the seemingly boundless possibilities, along with the freedom from constraints of storage and capital, can create giddy excitement. Everything seems doable. Why not add cheese boards to a home furnishing marketplace? People sitting on couches like to eat cheese, don't they? If you connect one thing to another, eventually everything fits.

But this thinking is risky. The goal at this early stage is to host rich selections of the items that fit the marketplace's one‐sentence vision. Scattered offerings of other items rob the marketplace of focus, depth, and quality.

As the Leibovich brothers, Gabby and Hezi, were getting ready to launch the Catch marketplace in Australia, they leaned heavily on their team of 60 buyers, who had been stocking their legacy eCommerce business for years. “In the early days, our data was the built‐in knowledge within the team,” Gabby recalls. “We'd pass it to Carlo, who knows about fashion. He'd say ‘Yes, we need that seller. No, we don't need that one’.” For each category, the team would pick out two or three.

A good number of key decisions, and their resulting implementation, can wait until after the launch, when data on customer behavior starts pouring in. One example is a customer loyalty program. These can produce all kinds of benefits: a test bed of customers on which to try out new things while also gathering rich pools of behavioral and demographic data. But it often can wait. There are many “nice to have” initiatives that can slow down launch timelines without having a significant impact on the initial success of the marketplace. These can come later on, once the initial effort to launch is completed.

One area of focus that shouldn't be set aside at the start, however, is widening the number of categories that will be offered through the marketplace. This work can be done with the merchandising team ahead of the launch, and can lead you to discovering early on – as many of our customers do – that visitors to your marketplace have broader tastes and needs than you imagined.

For Super‐Pharm, a thriving marketplace in Israel, many of the insights about new markets came through queries on its legacy eCommerce site. Its customers were especially eager for greater selection in four groupings: baby care, beauty products, vitamins, and food supplements. That was the focus for the launch. Later, says Michael Mitrani, the company's vice president for eCommerce and marketing, “we would look to sell TVs, appliances, all kinds of stuff.” But that expansion could come after the launch, once the company had its marketplace up and running. That's when a marketplace starts to function as a digital laboratory. It can provide never‐ending feedback on customers and their unfulfilled needs. The education never stops.

A viable marketplace must offer from the start broad selection in each focus category. This requires a certain threshold of sellers. The numbers vary from one industry to the next. Retailers generally need more sellers at the launch than B2B sites, where even one seller might have an encyclopedic catalog. For many consumer marketplaces, by contrast, 100 sellers would be a bare minimum.

Another perspective is to focus on numerical targets. If your company sells 25,000 items, the marketplace should at least double that offering in time for the launch. And the goal should be for marketplace sellers eventually to account for half of the digital sales, or more.

These numbers may feel huge. But one special aspect of marketplaces is that it's possible to add high‐quality sellers and offerings very fast, to curate at scale.

Even to the earliest customers, it should be clear that this is no single company's eCommerce site. The new marketplace offers a much bigger and richer selection. Within its range, they should be able to find a good selection of what they're looking for.

Hitting the Ground Running

At the closing of a real estate purchase, whether a house, office, or apartment, the purchaser signs a slew of documents, usually with the attorney laying one after another on the table, and pointing to spots for the signature. In these cases, the attorney knows the procedure and what the documents entail, and only communicates to the buyer the salient details. For the rest, most purchasers accept the default settings for banking, insurance, law, and taxation. Experts have dealt with the details. The buyer doesn't have to. In this way, he or she is offloading the work, trusting the provider, and accepting the vetted solution. This greatly reduces friction.

An overarching goal in building ecosystems is to create similar one‐click systems to bypass such complexity and friction. One approach is to delegate complex tasks, or those for which you don't have in‐house experience, to the experts. For example, imagine gathering your team to come up with a detailed strategy for sellers on your marketplace – which ones to recruit, how many, and where to find them. It's essential to have that discussion, but for many organizations, this is the first time tackling a seller strategy, and it takes time to pull together the plan. Rather than slow down your momentum while you figure it out, consider some strategic shortcuts that will help you establish a foundation:

• Recruiting sellers. Early in the process, you'll learn from our team that marketplaces similar to yours launch with, say, 100 sellers. And if you give us the OK, we can help you on‐board a targeted set of relevant sellers through our marketplace ecosystem, Mirakl Connect, which features a fast‐growing, curated selection of vetted, marketplace‐ready sellers. (We look at Mirakl Connect more closely in Chapter 5.) That provides the start, the default solution, providing for much of the MVE. If you want to refine it, by all means. But in the meantime, you're covered with an industry standard. French DIY retailer Leroy Merlin, for example, was able to on‐board 140 new sellers within two months, adding 170,000 items to its marketplace. Half of the sellers came through Mirakl Connect.
• Designing your tech stack. You'll want to make your marketplace all your own, selecting best‐of‐breed technology partners to support everything from fulfillment to invoicing and tax compliance. But rather than scouring countless options, identifying the ones that are optimized for marketplace ecosystems, and then developing custom integrations, look for pre‐vetted lists and pre‐built connectors to speed up your time to market. Leveraging out‐of‐the‐box integrations also makes managing marketplaces easier in the long term since you're offloading the tasks of maintenance, data model mapping, and more to your technology partners.

Another way to speed things up is to establish clear ground rules for your marketplace, driving consistency and efficiency. While business rules and automation can apply to any number of activities, consider starting with the handful that can be applied broadly. Here are some areas where default rules are most often used:

• Legal documents. Of course, it's essential for company lawyers to read every single legal document. And many of them include crucial information, such as privacy policies for the parties on the marketplace, from sellers to customers. This would include details on who owns data, and what their responsibilities and liabilities are. They spell out who's liable for faulty products and missed shipments. While all of this is immensely important, most parties are agreeing to common terms, which boil down to defaults. Together, they spell out the rules and bylaws of this developing ecosystem.
• Commissions. These vary by industry, generally in line with profit margins. For example, commissions for sellers in the hypercompetitive electronics industry are skinnier, about 7%. Boutique goods might climb to 25%, while the normal retail rate – and the standard in B2B marketplaces – is 10% to 15%. These are the standards, and easy to plug in.

  Of course, there is room for changes and exceptions. If a new marketplace wants to charge lower commission rates to woo a luxury brand or to build special niches, perhaps for products that are sold by local businesses or others that help protect the rainforests, that's no problem. Much of this customization can come after the launch. In preparing for the MVE, default solutions shorten the time to market.

• Performance standards. We cannot overstate the importance of establishing ground rules for the marketplace, including the performance standards that sellers will have to meet for speed, customer satisfaction, and product returns. Many of these are already established, so that managers of new marketplaces can select them from menus.

  Picking the right ones still requires planning and strategy. From the customers' perspective, which is paramount, the best marketplaces provide excellent and uniform service. In an ideal scenario, shoppers experience no drop‐off in speed or service when buying through a third‐party seller. Most marketplaces, however, have to allow for a degree of variation among sellers. An obvious example would be foreign sellers, who will need more time to deliver, while also requiring different return procedures.

  Rules can be based on a host of variables, including order‐acceptance rate, shipment lead times, message response rate, customer rating and reviews. In addition to establishing these rules, you'll need to establish monitoring and reporting, while making sure that sellers understand the rules as well as the consequences if they fail to meet them.

• Product taxonomy. One significant piece is to link the platform to the company's legacy information system, usually including its eCommerce engine. This entails work for the IT staff, of course, but it also spreads to other parts of the company. The two systems, for example, have to do business in the same language, sharing the same verbs and nouns for every aspect of inventory, ordering, and shipping. Take your PIM, or product information management, system. For this, the merchandising team has to establish the product taxonomy for the marketplace and ensure third‐party sellers have access to it. While it's important to have a clear product/catalog taxonomy structure that sellers can map to, it's even more important that you make it easy for them, through data mapping tools or templates, to simplify their on‐boarding process, ensure data quality and drive consistency. Further, you may also want to establish rules, such as requiring that all product names begin with a capital letter. Establishing these rules early on will mitigate catalog issues down the road.

For the entire pre‐launch process, our customer success team provides the customer with a schedule focusing on the construction job ahead. Even with the growth of default solutions, there is still a load of complexity that must be programmed into the platform. On the schedule, this work is divided into three key stages: Design, Build, Run. The responsibilities for both the customer and our company are spelled out. The technical work for the customer includes building seller portals, financial and reconciliation systems, and processes to deal with customer questions and complaints.

In this first chapter of this pre‐launch how‐to section, we have looked at the organizational steps in assembling and targeting this transformative commercial platform. In the next chapter, we move to the communications challenges – preparing the internal workforce for the changes ahead, and reaching out to new collaborators in the ecosystem of sellers.

Chapter Summary

This section lays out the work involved once an enterprise has made the decision to build a marketplace. This is a major construction and organizational project. We compare it to building a temple – the walls to sustain it, the roof to shelter it, along with room and regulations for an active community to take shape inside it.

The key early steps include: establishing an oversight committee, one that at the very least includes a direct report to the CEO; assigning a team to build and manage the new marketplace; shaping the brand; and establishing the ground rules, such as the delivery and service norms for sellers. A crucial job, once the ground rules are established, is to recruit and on‐board the initial roster of sellers.

Speed is of the essence during this period, which usually takes from three to six months. To get to market more quickly, we introduce the concept of a Minimal Viable Ecosystem (MVE). This is a marketplace with just enough variety and sellers to sustain itself and gain momentum out of the gate, but with plenty of room to keep adding sellers and selection once it's up and running.