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Marketplace Best Practices
March 20, 2023

How to Plan Your Marketplace Organizational Structure For Every Growth Stage

Lindy Singer
Lindy Singer
Head of Marketing

The marketplace model’s soaring popularity is a tech-driven phenomenon. The availability of multi-vendor marketplace platforms has helped marketplaces launch faster and more efficiently than ever before, tapping into a type of ecommerce that accounts for trillions of dollars of sales. However, launching a marketplace is about more than a tech stack. Having the right mix of people behind your digital marketplace is critical for success in the competitive multi-vendor segment of ecommerce.

If you’re interested in launching a marketplace, that means that in addition to having the best tech stack in place, you’ll also want to establish an effective marketplace organizational structure — one that’s tailored to each stage of your marketplace’s development. 

In this blog post, we’ll first define what an organizational structure is, how it needs to evolve alongside your burgeoning marketplace, and, lastly, lay out its core functions.

What's the Purpose of a Marketplace Organizational Structure?

An organizational structure is how a business is set up. It outlines what kind of team is in place, what specific roles are needed, and the flow of information across the team to meet common goals. A marketplace organizational structure lays out these details specifically for a marketplace.

There’s no such thing as a one-size-fits-all marketplace organizational structure. The needs of a marketplace at launch are going to differ greatly from a more established ecommerce organization. Your marketplace organization structure must also reflect the size and scope of your business.

While structures vary from business to business, there are certain fundamentals to keep in mind every stage of the way as you launch, grow, and ultimately scale a marketplace.

How to Build a Marketplace Business at Each Growth Stage

A marketplace's organizational structure needs to evolve over time. As a marketplace grows, for example, you’ll need to increase your headcount.

Regardless of where you are currently on your journey, one thing is clear: launching a marketplace requires an investment in the right people to help it operate. In a study Nautical commissioned with Forrester Consulting, 100% of respondents hired more employees to help with the adoption and management of their marketplaces. Nearly half hired 15 or more employees.

Nearly half of surveyed businesses scaled headcount by 15+ employees to support their marketplaces

A marketplace’s journey can be divided into three phases: launch, growth, and at-scale. Below, we’ll go over what your marketplace organizational structure should look like at each stage.

The Team You Need to Launch a Marketplace

Generally, the launch stage is considered a marketplace’s first year of operation. Businesses should take a crawl, walk, run approach to launching a marketplace. That begins with building a minimum viable product (MVP) as quickly as possible for a pilot project, then ironing out wrinkles, and, finally, bringing the refined product to market to continue growing. This approach means starting with a small, nimble team of individuals who can wear many hats. You don’t want to over hire before validating your business model.

For a marketplace with anywhere from 10 to 100 sellers at this early stage, consider filling the following roles in your initial marketplace organizational structure:

  1. A marketplace manager to oversee the day-to-day operations of the marketplace.
  2. One to two seller-acquisition managers who can aggressively pursue new sellers with attractive and varied inventories.
  3. An employee for technical support, marketing, accounting, and customer service, as needed. It may sound like a lot of responsibilities, but with a minimum number of sellers on board, the workload should be manageable for one full-time staffer.
  4. A software development team. A recent study on building a business case for marketplaces, found that when launching a new marketplace, the bulk of new hires (72%) were in IT. Note that what your development team looks like depends on multiple factors:
  • Your customer base
  • What infrastructure is already established
  • How you build your marketplace

We recommend opting for a purpose-built multi-vendor marketplace platform rather than building a marketplace from scratch, which is time-consuming and costly. It’s the best way to manage complexity and maximize value in your tech stack. Even so, you’ll want your marketplace organizational structure to include a software development team to focus on the front end, which defines the all-important user experience.

The Team You Need to Grow a Marketplace

The growth phase typically occurs between a marketplace’s second and third years in operation. At this point, you’re refining your marketplace’s offerings. Acquisition managers are curating more high-quality vendors, which in turn attract more customers, thus encouraging even more vendors to come on board (that’s known as the flywheel effect). Your marketplace organizational structure at this stage should reflect the growth that’s occurring. In addition to maintaining the roles you launched with, consider making the following changes to ramp up seller acquisition, account management, and customer service efforts:

  • Maintain two to three seller-acquisition managers who should prioritize onboarding high-quality vendors
  • Increase seller account managers as the pool of vendors grows
  • Dedicate role(s) for customer care 

The Team You Need During the At-Scale Phase

A marketplace reaches the at-scale phase after a few years of rapid growth. Within year four, a healthy marketplace could have from 500 to 2,000 sellers and annual sales of $20 to $50 million — or more. At this level, the marketplace organizational structure needs to reflect the increased demands for big-picture planning, data analysis, vendor management, and more. Here are some roles to consider: 

  1. A marketplace director to take on a governance role, from spearheading monthly and quarterly revenue reviews to undertaking annual operations planning 
  2. Three to four seller-acquisition analysts who report to a seller manager
  3. Maintain four or five account analysts who can report to an account manager

🔵 Hiring decisions are one of many types of choices you need to make when launching a marketplace. Check out this key decisions checklist for a comprehensive list of the decisions at hand. 🔵

The Four Main Functions of a Marketplace Team

Overall, a marketplace organizational structure consists of four main functions to support the business. Some roles will have overlap — especially in the marketplace’s launch period.  

1. Customer service

It’s important that a marketplace organization structure prioritizes the customer experience. Outstanding customer experiences make a marketplace stand out. Here are some key components of customer service:

  • Responding to customer complaints and mediating issues between sellers and customers
  • Relaying information about pricing, product availability, and shipping, as per established guidelines
  • Recommending appealing alternative products or services

2. Technical support

As with any ecommerce business, strong tech support is a cornerstone of successful business operations. Tech support involves several key responsibilities, including:

  • Answering seller questions about API integration (connecting multiple software applications so they can communicate with each other) 
  • Handling technical queries concerning the platform
  • Troubleshooting platform-related problems
  • Managing vendor onboarding, such as helping with uploading third-party seller inventory feeds

3. Marketing and merchandising

This function is closely related to customer experience in some ways and also raises the profile of the marketplace. Team members focused on marketing and merchandising cover these responsibilities:

  • Maintaining a high level of quality across the product or service catalog 
  • Creating marketing assets either independently or with the help of outside agencies
  • Managing the self-registration seller pipeline and projects like data-quality audits

4. Accounting/finance

Effective team members in accounting and finance are invaluable. Their tasks include:

  • Managing transaction flows and payment runs
  • Providing accounting services for all expenses, B2B (business-to-business) and B2C (business-to-customer) invoicing, bank transactions, payroll, reconciliation with cash on delivery, and payment gateway
  • Run monthly, quarterly, and annual financial projections

Scale Your Marketplace Organizational Structure

As you can see, it doesn’t take a huge team to get a marketplace off the ground. Some additions to the marketplace organizational structure are best delayed until after your MVP is up and running, so you can stagger any increases to your headcount. Overall, a team of just 10 or 20 people can manage a marketplace with more than 1,000 sellers. Of course, choosing a multi-vendor marketplace platform like Nautical helps an organization stay lean by doing the heavy lifting on the tech side.

Nautical isn’t just a technology platform. We are here as a business enablement platform allowing change-makers — like you — to increase market share in your industry with the marketplace model. Learn more about how we can support your team.

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