Question
There's so many different examples from Airbnb (12% host, 3% to renter), Uber (~15% to driver) to Craigslist (freemium w/ paid placement + posting) for pricing a marketplace. Is there a framework to follow when thinking through this model? Is there different pricing sensitivities per marketplace type (heavily curated vs. more open)?
Answer
Great question. Here is how I would approach it:
1. Charge 0% to both sides of the marketplace for your transactions up to $50,000. Use Braintree (by PayPal) as your payment processing system and your 3% credit card fees will be waived up to your 1st 50K in transactions.
2. See who you've demonstrated the most value to. Meaning, without demonstrating any value, don't charge anything to anyone. Your revenue are the use cases and lessons learned that you'll generate. While gauging value, get a feel for price elasticity.
3. Once you've learned your lessons, set your percentages (either split or one-sided) accordingly.
