We started developing software in 2010 for our first classified ad website. We knew the look and features we wanted, but didn’t know anyone that could develop the website for us. So we turned to Elance.com and that lead to our first lesson in programming and development of a marketplace website. Elance is a great platform to help you outsource work, but our project turned into a $12,000 mistake. We worked for nine months developing our website only to end with a website that didn’t function properly and never reached the desired functions we had set out to build. Because of this mistake, we decided to build our own team we could fully trust. We turned to developers who had worked on other projects for us and our current journey began.
You can take two different paths to build your own classified ads website that can act like a Craigslist and AutoTrader for your local area. The first path is developing your own software. The second path is to use software like ours to accomplish your goal of building a marketplace for your town. The latter is the best option for numerous reasons for the overwhelming majority of people and media companies. The first path of developing your own software requires an annual six figure expense commitment and in-depth knowledge of website development. It will take several years before you even start to feel like you are making progress. We might not have taken the first path if we could have seen the future. However, today we have no regrets because our software powers two of our own classified ad websites and websites for other publishers.
We developed our allySites classified ad software to power both vertical and horizontal websites. Vertical websites focus on one type of category such as our used and new equipment website www.FarmersExchange.com. A horizontal website offers a variety of categories like Craigslist. Another example of a vertical vs horizontal website would be Amazon, which is a horizontal marketplace, compared to vertical marketplace focused on animals like Pets.com.
The first step toward success for your marketplace is building content. The majority of marketplace websites fail because they never reach liquidity. The term liquidity in this arena means when a marketplace reaches the minimum amount of buyers and sellers to create a reasonable chance of a transaction taking place. Keep in mind that liquidity is not about user growth but content growth.
A great way to build liquidity is using the auto category on your website. You might have wondered before how AutoTrader or Cars.com are able to obtain all those listings. They do this through software like ours that can accept inventory feeds from vendors who provide automotive dealers inventory management tools. The market of vendors providing inventory management software to dealers is fragmented across the country, which can cause problems developing your website. Our software solves this problem because we have already established relationships with data vendors. Our established relationships simplifies the process for you to start receiving dealer inventory feeds from your local auto dealers. This also enables you to build content quickly on your classified ads website. As of this morning, we had over 3,900 automotive listings on our horizontal marketplace, Exchange931.com. This horizontal website serves a 50-mile market radius.
Monitoring and curation of content is the second critical step to building a successful marketplace. This step is not hard to accomplish, on a local market level, and is critical to distinguish your website from national competition. We monitor every ad placed through email receipts and an account verification process. It takes a few seconds to glance at placement receipts when an ad is placed. This task can be split between different people on your team or you can assign one champion to this step. We have tools to ban users and remove content quickly if you do encounter a fraudulent ad or inappropriate wording or images.
We have learned a tremendous amount the last five years about software development and marketplace creation. Your focus on marketplace creation will drive the most value for your company and use our software to start building a classified ad website from day one.
Below are active websites powered by our allySites software.
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