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MenuHow do I make a two sided marketplace work in the children's fashion and accessories niche?
As a startup how I drive customers to the site and engage with suppliers to join the site, and convince angels/Seed funders it's an idea worth investing.
Answers
This is always a chicken and egg problem. You wont attract customers if you don't have sellers on your market place and sellers won't join unless they see numbers.
This is how I would approach(I won't call it optimal as there is nothing like optimal here as strategies will change based on time, place and demand dimensions)
1. Start from a locality or a city with sellers who are known to be providing good service to their existing customers. Go and pitch to those customers on how they will benefit on their supply chain if they choose your market place. Now once they are on-board to your platform, go talk to their customers on how you are making their life simple by coming to their platform.
2. Slowly expand to other localities and make sure that you add varieties to your platform in the process. Choose the sellers who will provide a wide range of goods in the process.
3. Expand this at a city and then go for state, country and cross-country level.
As you build up the model, make sure you respect the credit cycle of buyers and delivery cycle for customers.e are nuances you want to take care at each level.Setup a call and we will go over this in detail.
Having operated an online marketplace for 3.5 years, it's no easy feat. If you would like to setup a call, I can tr to give you as many of these learnings as possible, before you get started.
I ran one of the top accelerators in the US for several years and I'd say 50% or more of the businesses that come through face this problem. I've seen a lot of patterns in this space and I could advise you if you are interested on what has worked for some of the businesses I have seen. The chicken and egg problem can be overcome with the right planning. I'd be happy to schedule a call with you.
Related Questions
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What support software do most marketplace startups use? Is it custom, or a SaaS product like Zendesk, Desk.com or Uservoice
Your support software should cater to your needs, depending on how your business operates. Fiver uses Vanilla forum and Zendesk. Thumbtack uses Zendesk. Not sure about AirBNB, their help center seems to be custom. Depending on how well funded your are, I would recommend starting with a free plan with one of the help desk SaaS products, or even using open source ticketing platform. Then, as your needs grow and you need integration with your marketplace, there's no reason you can't scale and migrate.VN
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Freemium v.s. free trial for a marketplace?
It depends on a number of factors but I'd boil it down to two key things to start: 1) What is your real cost to provide a free plan or trial? 2) Who exactly is your customer and what are they used to paying and who and how do they pay today? When you say "online workforce marketplace" it sounds as though you're placing virtual workers. If that's the case, or if you're paying for the supply side of the marketplace, the question is how much can you subsidize demand? Depending on where you're at in the process, I'd also question how much you can learn about the viability of your marketplace by offering a free version, assuming again, that free is actually a real cost to you. I was part of a SaaS project that started charging people for early access based mostly on just a good landing page (we clearly stated they were pre-paying) and were amazed at the response. I've also run a SaaS product that offered free trials and realized that the support costs and hand-holding and selling required to convert from free trial to paid wasn't worth it, this despite the product's significant average ARR. You might be better off providing a "more information" sign-up form (to capture more leads) and let them ask for a free trial while only showing your paid options. I've been amazed at the lead capture potential from a simple "have questions? Click here and we'll contact you" This is all the generalized advice I can offer based on the limited information I have, but happy to dive-in further if you'd like on a call.TW
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When recording income for a marketplace startup, is it typical to use the gross transaction or just the fees collected per payment?
You usually only recognize the commissions as revenues and use the term "Gross Merchandise Value" (GMV) to describe the size of the marketplace (value of all transactions going through the site)BW
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Holding funds in a 2-sided marketplace?
Check out https://www.balancedpayments.com/ They are made for marketplaces. Airbnb CEO among others invested in them and they have some of the best pricing/payout fees. Also some good info on http://www.collaborativeconsumption.com/2013/10/08/online-marketplaces-are-hard/ One of Balanced Payments co-founders is writing this blog series on marketplaces.MA
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What is the pros and cons of a marketplace website like houzz.com, zillow.com and trulia.com where users send mail to professional without logging in?
It really depends on your mission and from where you intend to drive revenues. Asking a guest to create an account and log in in order to send an email to your customers could be seen as a stumbling block. The more you can encourage visitors to reach out to your customers, the more your customers will have a great experience, On the other hand, you have to make sure you all the security measures in place so your customers do not get spammed through your site. Give me a call to discuss further. I offer a free initial call to first time clients. Use this link: https://clarity.fm/kevinmccarthy/FreeConsultKM
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