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The Entrepreneur’s Guide to Attract Vendors on a Marketplace

The Entrepreneur's Guide to Attract Vendors on a Marketplace

New marketplaces often face the challenge commonly known as the ‘chicken and egg’ problem. The problem simply refers to attracting vendors without customers and vice versa. As more vendors imply more customers and more customers mean more vendors, both of them are interconnected with each other.

This dilemma arrives when newly launched marketplaces neither have vendors nor customers. Thus, to help marketplace owners onboard vendors in an initial stage or with a smaller customer base, we have prepared this guide and shared some insights below.

Marketing strategies stated in this blog can be used to attract vendors on various types of marketplaces, including those for sales, rentals, eLearning, cab booking, food delivery and online services.

Prerequisites for Attracting Vendors

Relationship Marketing Attraction

From digital transformation experts in the ecommerce industry, marketplace business owners must also provide specific requirements to attract vendors. We have listed all crucial conditions below:

  • Smooth Onboarding/Migration Process

Your targeted vendors already have storefronts on popular marketplaces like eBay and Amazon. Many can also have extensive inventories, especially those dealing in consumer packaged goods, fashion, hardware, electronics, etc. Thus, it is essential to ensure a smooth migration process in your marketplace where vendors can easily import their products from other marketplaces. You can also provide ‘how to’ guides and proper documentation on your platform.

  • Trust and Credibility

Another essential factor that vendors will consider before registering on your marketplace is your trustworthiness and credibility. This can be built by keeping transparent processes, policies and commission rates. From the beginning, vendors should know your commission rates, transaction rates, withdrawal periods, minimum withdrawal amount, etc. Furthermore, you can win their trust and show credibility by taking necessary security measures such as collecting rental security from customers or offering insurance.

  • Security and Insurance

Speaking more about security measures, offering security and insurance regarding fraud, loss or damage protection is essential to attract risk-averse vendors. This can include integrating renowned payment gateways and insurance coverage. Along with these, they also rely on dedicated ecommerce software to address security concerns. For example, use reliable cab booking software for the on-demand cab business, dedicated equipment rental software for the equipment rental business and dedicated handymen software for the handypersons services business. 

  • Brand Exposure

In return for selling their products on your marketplace, modern businesses expect brand recognition. More than simply mentioning seller names on product listings on your marketplace is required. To provide vendors with better brand exposure, you can offer them individual storefronts where they can showcase their products how they want. You can also offer them social media sharing buttons, featured listing spaces, banner ads, branded packaging, and more on your marketplace.

  • Competitive Commission Structure

On average, marketplaces charge anywhere between 5% to 30% on gross margin as a commission rate, which is higher for small businesses. Due to this, many offline vendors are often reluctant to sign up on currently existing marketplaces. By having a competitive commission structure, you can attract offline vendors to your marketplace and grasp the attention of competitors on competitor marketplaces. We will discuss varying commission rates in depth in the incentivising early adopter's section below. 

The Most Effective Marketing Strategies to Attract Vendors

After completing all the prerequisites, attracting vendors will require a strategic view. Focusing on a proper onboarding plan inclusive of multiple approaches will bring results faster than a uni-channel approach. Marketplace owners must also be versatile to switch directions on not seeing desired results. Fortunately, once early adopters (the first few vendors and customers) are on board the marketplace, expanding the vendor base will be easier.

1 – Incentivise Early Adopters

Incentivise Early Adopters

Attracting the first few vendors is a big challenge for newly launched marketplaces, which are yet to develop a customer base. However, incentivising those vendors with compelling commission rate structures or strong value propositions can help you navigate the challenge. Similar was done by many popular marketplaces today when they faced the problem of onboarding vendors. For example:

  • Uber: In its initial days, Uber offered new drivers an hourly pay rate to onboard them. It also provided them bonuses for completing a fixed number of rides.
  • eBay: Onboarded vendors from flea markets and offered them free-of-cost listings 
  • Airbnb: Offered a minimum payout rate to all hosts on the platform
  • TaskRabbit: Launched a referral program that awarded both vendors and customers with a $20 credit
  • Etsy: Offered lower commission rates than all its competitors
  • Doordash: Offered reduced commission rates to new sign-ups (still follows the same approach)
  • Thumbtack: Incentivized vendors by sharing direct job posts with service providers

How to incentivise vendors to join your marketplace?

Referring to the marketplaces above, new marketplaces can incentivise vendors in several ways. 

  • Offer free listings to the first few vendors
  • Offer lower commission rates to the first few vendors
  • Launch a referral program with discounts or credits for every successful referral.
  • Provide a free trial period to all new vendors.
  • Set a conditional no-commission policy. For example, no commission charges up to $500 earning or no commission charges for orders below $50
  • Provide more monetisation options, such as free banner listings and featured spaces.

All these offers can be revised once your marketplace reaches a sustainable number of vendors and customers.

2 – Build your Network

Business Networking Events For Seo

Harvard Business Review describes networking as “creating a fabric of personal contacts who will provide support, feedback, insight, resources, and information.” The same applies to marketplace owners who require constant efforts and strategic partnerships to grow. Soon after onboarding the initial vendors with the help of offers and incentives, marketplaces are highly likely to reach a plateau. In that scenario, building and reaching your network will assist in keeping you afloat. 

The approach may look tedious at first, involving a lot of cold messaging and repetitive tasks, but results from utilising personal networks are often long-term. Your connections, such as business personnel, friends, family, competitors, mentors, partners, old colleagues, affiliate marketers, etc., are a rich pool of resources whom you can ask to sign up on your marketplace or give referrals.

Our most recommended platform to do so is LinkedIn. If you don’t have a robust LinkedIn Network, you may need to begin from scratch and onboard vendors simultaneously. The following LinkedIn methods can help you establish a solid and resourceful LinkedIn Network within a short but realistic timeframe:

  • Create a Business Page

LinkedIn business pages act as powerful brand identities that establish trust and enable seamless connectivity between your brand and LinkedIn connections. Creating a dedicated page for your marketplace gives your contacts a one-stop destination to find all your updates. Furthermore, a business page will increase the credibility of your brand and back up the offerings and value propositions on your personal Linkedin account.

  • Invest in LinkedIn Premium (Optional)

While LinkedIn itself provides sufficient options to build a network, LinkedIn Premium helps to do so faster. It offers exclusive features such as InMail messages, unlimited people browsing, private browsing, access to LinkedIn learning and even the option to see people who have viewed your profile and business insights. This simplifies finding like-minded people and reaching out to vendors who are more likely to register on your marketplace.

Benefits of LinkedIn Premium
Direct MessagingPrivate BrowsingSee Who Viewed Your Profile
Unlimited People BrowsingBusiness InsightsLinkedIn Learning
InMail Credits
  • Upload Visual Content

There is explosive adoption of visual content across multiple industries as visual content assists in invoking a bigger, more precise and faster response in viewers. By sharing meaningful content on LinkedIn, which may even be a direct invitation to register on your platform, you can leave a more profound impression in the minds of your connection and persuade them to write. As viewers retain visual information for a long time in their minds, it would be easier for them to recall your marketplace in future. 

  • Promote in LinkedIn Groups

LinkedIn Groups are business communities of like-minded people highly relevant to your marketplace. Those people are often looking for a solution to their various problems, some of which your marketplace can help resolve with automation. Some people can also be directly looking for strategic business partnerships or channels to sell their products. Ensure you join actively managed groups and frequently participate or share your ideas to attract vendors in LinkedIn groups.

3 – List your Business on Google My Business

Digital Marketing Google My Business

Google My Business is a modern alternative to the traditional phonebooks and yellow pages. Simply, it creates a business profile for your business and helps people find you faster. Creating a Google My Business profile for your marketplace can help establish credibility with vendors and make your partnership proposal sound genuine and reliable. To increase your online presence and credibility, Google My Business can help you promote your marketplace with advanced capabilities. 

  • For specific keywords, Google My Business can display your marketplace in a special preview section alongside or above the regular search page results.
  • Furthermore, as per statistics, 56% of actions on a GMB profile turn into website visits, and 24% become direct calls, amplifying the benefits of creating your GMB profile. 
  • To create an anchoring effect and leave a solid first impression on viewers, GMB also displays reviews and ratings. Thus, simplifying the decision-making process for potential vendors.
  • GMB listings are visible on the map, giving geological proof to your business by showing the headquarters address.
  • Lastly, registering on GMB is free advertising for relevant search terms; you don’t need to compete with other businesses and marketplaces for ranking. Your marketplace will be displayed at the top in SERPs and map views. 

4 – Paid Campaigning

Motion Graphics Design In Advertising

Paid campaigning or paid advertising is utilised in cases where organic reach is limited, which is primarily true for startups and SMBs. For online marketplaces, paid campaigning holds immense value as it helps reach a broader audience in comparatively less time. It helps marketplace owners target a particular audience selected based on various consumer demographics, psychographics and interests. This further helps prepare a defined approach, which, in contrast to popular belief, is highly cost-effective because paid marketing fits any budget.

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As the marketplace owner, you can launch a paid campaign that meets your budget and automatically stops when the budget goes overboard. For maximum results, we recommend adopting the omnichannel approach where your primary platforms will be LinkedIn, Facebook, Instagram and Twitter.

LinkedIn undoubtedly tops all other social media platforms in attracting vendors with massive communities of business professionals. For placing LinkedIn ads, you will need to create a LinkedIn campaign manager account that will help you create and manage the following types of ads:

  • Sponsored Content
  • Document Ads
  • Message Ads
  • Dynamic Ads
  • Text Ads

After creating the profile, you can specify your target audience, including attributes like company size, interests, job titles, skills, etc. Once done, set up your ad campaign and manage the ads with the help of the campaign manager and data metrics.

*LinkedIn ad metrics graphics*

You can advertise video content on all paid campaigning platforms, gaining prominence in the past few years and driving maximum engagement. Some other popular social media advertising trends that may help you are:

  • Facebook Retargeting: This helps you retarget users who have visited your marketplace.
  • Influencer Advertising: Help industry-renowned experts spread the word about your marketplace.
  • Personalised Ads: Tailor the ad experience for every demographic and psychographic group
  • Informative Ads: Create ads that are more informational than promotional to make them more memorable
  • Chatbot Advertising: Use chatbots to explain your marketplace program and explain the benefits of selling products on your marketplace
  • Mobile-First Advertising: Create ads to look best on mobile devices and optimise them for laptop screens and desktops. 

5 – Social Media Promotions

Top Social Media Platforms Worldwide

Along with paid campaigning, organic social media promotions can assist in maximising brand awareness. For the past two decades, social media platforms have been essential communication tools for connecting with audiences. Hypothetically, social media platforms are attention-grabbing channels to attract users by distributing the right type and form of content. With a well-devised strategy, they can also assist in attracting vendors to your marketplace.

To begin with, the quality of creatives and posts requires foremost attention along with the message they portray. For exemplary purpose, let’s consider the following statement: 

Increase sales by listing products on our marketplace, commissions charges for the first 50 vendors, get a personal storefront

This message makes several social media posts possible, including images, videos and animations. A good quality social media post will deliver the message clearly without adding irrelevant details. Also, social media purchases don’t happen accidentally and require a trigger to entice action. To attract vendors to sign your registration form, your social media posts will require a Call-to-action (CTA) that can be placed in the caption or creative. 

Balancing Promotional/Informational Content

As advised by social media experts, social media platforms are primarily channels to build social networks, and more promotional content or hard selling is needed. In such a scenario, investments bring negative results, making ROI generation difficult. Thus, a proper approach is to balance promotional and informational content, which will also remain effective for the long term. 

This can be easily achieved by drafting a monthly social media calendar that includes all posts and targets different goals. As social media is also about timing, your calendar can have unplanned posts on unpredictable topics such as industry events, partnerships, sign-up offers, etc.

Social Media Content Template

Create Scarcity

Another approach to persuade vendors to register on your marketplace is utilising psychological triggers that create a sense of urgency in viewers' minds and encourage them to take immediate action. As per the economic principle of scarcity, when people believe something to be scarce, they place a higher value on it and feel compelled to act promptly.

On the social media handles of several renowned brands, we see promotional ads and posts that use scarcity daily. A simple yet effective way to create scarcity is to provide limited period or limited quantity offers, free-of-charge listing until the first month of registrations or free premium subscriptions to the first hundred vendors.

Influencer marketing

Online claims often face scepticism. Due to this, many brands require a trustworthy person to be their brand's face or simply convey a message on their behalf. Partnershipping with a digital influencer also works because they command authority over specific audiences and have already won their trust. 

As per statistics, in the US economy alone, the total influencer marketing spend increased more than double in 2019-2023, crossing the $6 billion mark at an average growth rate of 26.5% per year. Moreover, witnessing the rise in the content creator economy that reached $250 billion in 2023, the significance of influencers in modern-day marketing cannot be overlooked.

To find suitable influencers to help you attract vendors, try connecting with your industry’s thought leaders whose opinions are widely respected. You can find their profiles on LinkedIn; many also have websites from which you can approach them. To see content creators, you can use influencer marketing platforms like HyperAuditor, Aspire, Grin, BuzzSumo and

6 – Content Marketing

Content Marketing Vs Advertising

Content marketing with strategic goals is beneficial at all stages of business growth. It allows brands to position themselves as a solid authoritative figure in the industry while increasing brand awareness and user engagement levels. Furthermore, investments in content marketing generate long-term returns as the content created stays for years compared to paid campaigns that stop once the marketing budget is over. 

To attract vendors with the help of content marketing, it is essential to target vendors' pain points steeply. This can be achieved with the following forms of content marketing.

Press Release

Press releases provide the necessary media coverage that brands require in the beginning. In a press release, formal news, including brand offers, product launches, event announcements and other updates, are directly submitted to media networks with international, national and local connections for further publishing. This way, press release sites act as the means to help you deliver your news to the right audience more effectively. Some of the renowned press release agencies are:

  • Newswire
  • PR Newswire
  • Cision
  • PRweb
  • OpenPR

Guest Posting

Guest posting refers to publishing your content on highly renowned third-party websites. These websites command high domain authority and receive massive amounts of traffic. By issuing a blog on a relevant third-party website, you can increase business reach, brand awareness and even accumulate backlinks, which can help you improve your website’s domain authority. Guess posting can be free and paid; unlike a press release, guest posting sites have their standards and guidelines for publishing. 

Press ReleaseGuest Posting
Distributed to media agencies and published on their network sitesShared and published on renowned third-party websites
The primary agenda is to spread the news on relevant sites The preliminary plan is to target the publisher’s audience and benefit from its brand image
The content is newsworthy, such as product launches, business offers, event announcements, etc.The content used can be informational, educational and even opinionated.
The format is pretty much standard and shared by the whole industryDesign, guidelines and quality standards vary from website to website

Website Content

Publishing content on your marketplace site in the form of blogs, articles, guides, and webpages can have its benefits. First, vendors can find all information regarding registration, benefits, and ‘how to’ blogs in one place. They can also find all future updates on your website. Secondly, publishing content on your website will help you keep your visitors engaged, establish trust and help in search engine ranking.

7 – Email Marketing

Convertkit Email Marketing Services

As per statistics, businesses get an ROI of $36 on every $1 they spend on email marketing. Email marketing is a low-cost and low-effort digital marketing approach, which is still effective in the modern world. In contrast to other methods, generating and sending cold emails saves time. Today, with the help of email marketing tools, you can also keep track of recipients who open a link in your emails.

To appropriately target vendors with email marketing, it is essential to create a personalised email by collecting information such as business name, position, region, etc. This information can be easily found on LinkedIn profiles, or you can also invest in email finder tools such as RocketReach, and Skrapp. Another option that you have is to purchase direct email lists that include related information as well. 

Once an email invitation is sent to attract vendors to your marketplace, you can send follow-up emails from personal and business emails to trigger a response. Remember to keep the email short and crisp, and include CTAs to increase engagement and induce action. 

8 – Word of Mouth Marketing

What Is Word Of Mouth Wom Marketing

Word-of-mouth marketing (WOMM) is often considered the best marketing form, yielding the most effective and long-term results. Moreover, this form of marketing follows exponential chain reaction type growth. If your offered value proposition is genuinely good, WOMM will only require a one-time push or investment, and the word will spread automatically. The psychology behind WOMM is simple; people are likelier to believe recommendations made by real-life connections instead of commercial advertisements. Thus, the word automatically spreads in relevant communities and helps you grow.

As said above, word-of-mouth marketing requires a one-time push. Attract vendors can be done in the following ways:

  • Conduct Business Events and Seminars: To promote your word of mouth, you can host a one-time business event to invite local businesses and explain the benefits of selling their products on your platform.
  • Conduct Webinars: The same can be done online by organising webinars. By conducting webinars, you can target vendors on a national level as well. 
  • Influencers and Affiliates: Online influencers and affiliate marketers can help spread the word regarding your marketplace.
  • Utilise User-Generated Content (UGC): User-generated content refers to forums, reviews and experiences that users share online. While word of mouth is a type of UGC, keeping it recorded online will generate long-term results.
  • Offer Enticing Value Proposition: If your offered value proposition, such as the commission rate structure, customer support, or brand experience, is better than your competitors, your word of mouth is bound to grow.


There can be numerous ways to scale and attract vendors in a marketplace. The most practical approach is to measure the immediate ROI on your planned activities. Initially, you need a competitive commission rate to incentivise vendors, and you can begin by reaching out to your network, which has the highest chances of conversion.

In conclusion, attracting vendors requires a combination of strategic approaches (including social media marketing, paid campaigning and influencer marketing) carefully developed along a strong value proposition. By leveraging those approaches, marketplaces can expand their vendor base and drive sustainable business growth.

Author Bio: Saurabh Thakur is a Digital Marketing Strategist and business consultant who aids entrepreneurs in establishing effective digital touchpoints, boosting sales, and fostering business growth. Leading a team of skilled professionals, Saurabh consistently delivers exceptional results that meet and exceed customer expectations. Connect with him via LinkedIn

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Stuart Crawford

Stuart Crawford is an award-winning creative director and brand strategist with over 15 years of experience building memorable and influential brands. As Creative Director at Inkbot Design, a leading branding agency, Stuart oversees all creative projects and ensures each client receives a customised brand strategy and visual identity.

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