After running a successful marketplace business for the past few years, I can honestly say that it truly depends on your industry and the spending habits of your customer.

With LawTrades--a marketplace to buying and selling legal services-- we experimented with both models and ended up taking a hybrid approach that was not purely subscription nor was it only transactional. We can delve more into this during our call.

However, if you're working with professional service providers, going the subscription route means that you really must deliver some significant deal flow to your buyers (aka lead gen) since they're paying up front. If you're just starting out, this could make the infamous chicken and egg problem worse.

By choosing the transaction/commission model, in order for that to work, you need to OWN each and every transaction.

By that I mean, make it very difficult/unreasonable for a buyer to take his transaction with the seller off the platform.

For example, sites like Clarity are especially prone to this because in order to facilitate a transaction the buyer and seller need to first know each other before any transaction occurs. This causes a problem because once they do get to know each other, they can just directly connect on Linkedin or another channel, leaving the platform out of the cut.

Also, if you don't build out some really good tech and create an awesome workflow management system, they might leave because of that too. oDesk/Upwork is an example of a really good workflow management system.

So those are a few things to consider but I really need to understand the nature of your marketplace before advising which route to go with.

Maybe a hybrid approach could work better for you like it did for my business--happy to hop on a call to discuss further.

Best,
Raad