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MenuHow to launch a Consumer-To-Consumer marketplace?
We want to launch a Consumer-To-Consumer marketplace like Letgo or Avito. How could we acquire/retain the first users without publishing fake products?
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You could potentially try to get a good amount of products on your marketplace through your friends and family as a start. Also make sure that you go city by city so that way you can focus on one city and once you are doing great there you have the credibility and the experience to move to a new city.
You could also look at other marketplaces like facebook marketplace, craigslist or letgo and duplicate some of the postings on your site (Check for the legality of this). But you can definitely talk to some of the people that are selling on these platforms and try to get them to post on your platform as well.
If you have some investment money behind you, you could buy some stuff off garage sales, craigslist etc and put it for sale on the platform. Then you can advertise the platform to the general public through social media etc.
Acquiring and retaining users requires two different things. Recruiting users: connect with groups. University students can use cash upon graduation, so selling still usable furnishings, clothes, decor, etc. will appeal to them. An accessible subset of university students is a sorority or fraternity. Connect with these organizations (undergrads make great brand ambassadors for this purpose in exchange for using your platform fee-free). You should take a transaction fee from each sale. Expand awareness of your platform via the sorority and fraternity regional and national chapters. As these early users age, their social networks change which creates user diversity. I specialize in identifying, developing and executing growth channels and I'm just a phone call away.
I would say this from my personal experience.
BREAKING DOWN 'Customer To Customer (C2C)'
At its most basic level, C2C represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. C2C businesses are a new type of model that has emerged with ecommerce technology and the sharing economy. The advantage for customers is that they benefit from the competition for products and they can often find items that are difficult to find elsewhere. In addition, margins are high for sellers because there are minimal costs due to the absence of retailers or wholesalers. C2C sites are convenient because there is no need to visit a brick-and-mortar store. Consumers simply list their products online, and the buyers come to them. In the case of eBay, items are shipped by the seller directly to the buyer.
Revenue and Growth of the C2C Market
C2C websites and similar platforms make money from fees charged to sellers for listing items for sale, adding on promotional features and facilitating credit card transactions. These C2C transactions typically involve products sold through a classified or auction system, and the products sold are often used.
The C2C market is projected to grow in the future because of its cost-effectiveness. The cost of using third parties is declining, and the amount of products for sale by consumers is steadily rising. Retailers consider it to be an important business model because of the popularity of social media and other online channels. These channels showcase specific products already owned by consumers and increase demand, which drives increased online traffic to C2C platforms.
However, C2C has some problems, for example, lack of quality control or payment guarantees. Is some cases, credit card payments may not be supported although the emergence of PayPal and other payment systems over the years has helped to simplify payments on C2C platforms.
Example of the Rise of C2C
The C2C marketplace has increased over time as more companies have entered the space to facilitate C2C transactions. Many companies target niche markets and list specific products to attract unique consumers.
For example, Amit Lakhotia, former vice president of payments at Paytm, left his position in January 2016 to pursue other ventures, one of which was Tokopedia, one of Indonesia's biggest online marketplaces. Tokopedia is a C2C retailer that provides a platform on which entrepreneurs can open small and midsize C2C enterprises (SME) of their own for free.
If you have any other query you can consult me.
Launching a Consumer-To-Consumer marketplace can be challenging, especially when it comes to attracting the first users. Offering initial incentives for early adopters, partnering with local communities, or hosting promotional events can help drive interest and engagement. Also, you might find this article helpful for insights and strategies: https://www.cleveroad.com/blog/how-to-make-an-app-like-letgo/. Good luck with your launch!
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What is the best pricing (business model) to apply to a marketplace?
I like to separate your question into 2 sub-questions: #1 How do we determine which side to charge? #2 How much is the right amount to charge? On #1, my answer is that you can charge the side(s) for whom you add the most value. In your examples, Uber really solves a big problem for drivers, it's that they sit idle for a good part of the day, so are willing to pay a lot for new leads. (their alternative is no work) Consumers are charged more for the convenience of a private car but they are probably not so much willing to pay more for a taxi, even if they can hail one from their phones. For AirBnB, it's a mix, it's a way for landlords to monetize idle capacity which they are willing to pay for, but it's also a way for a renter to pay less than they would normally pay for a hotel. On #2 (how much), I like to triangulate a number of factors: - What's the maximum amount I can charge one side, while still being a good deal for them. - How much do I need to charge so that I can become profitable? (the economics are quite different if you charge 3% vs. 12%) - What are comparable services charging for substitutes/competitive offerings? I will just add that there is no formulaic way to determine pricing strategies (curated vs. open), and it's a lot more about what's the comparable and what the value delivered is. That's how I approached the question while deciding the business model at ProBueno.com (my startup)MR
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I'm looking to get off the Yahoo platform. Shopify seems to be nice, and BigCommerce just looks like a slightly better Yahoo. Thoughts?
Shopify is best use case for $0 to $1M ish, depending on product line, how many transactions that makes up, and if their are some custom things that are not possible on Shopify that realistically lead to huge gains that would cover more costs of a custom solution with something like magento. I recommend Shopify to everyone starting out. That's what we used at Diamond Candles up until about a $5M run rate. We were/are growing quickly so we hit a point where payoff of customizing checkout flow, add of social sign on, etc. that could not be done because of Shopify, would cover and surpass costs of a more custom option. Best to think about this simplistic example. View the ecom platform market in about 3 buckets. 1. Starting out: $0-$1M ish 2. Wow looks like you have a business: $1M-$20 or 50ish 3. You are/could be publicly traded: $50M+ Take a look at usage #'s for market share size from independent third party analytics tools from Builtwith: http://trends.builtwith.com/shop/Shopify/Market-Share http://trends.builtwith.com/shop http://trends.builtwith.com/shop/hosted-solution Just because something is found on the web more isn't the full picture. Ie. I could make a blogging platform and have a bunch of scripts and bots install it on millions of domains and I would have majority of the market for blogging platforms (ya that would take a while and isn't a realistic scenario but you can get the point). Providers dominating the different categories by companies in those areas actually doing volume and being succsessful? 1. Shopify, BigCommerce, Volusion, Magento GO, 2. Magento (varying editions), Yahoo Stores, Symphony Commerce 3. Demand Ware, GSI Commerce, Magento (varying editions) At the end of the day a good illustration goes like this. A truck and a moped are two different things. A truck is not trying to out 'moped' a moped and a moped not trying to out 'truck' a truck. They are both perfectly suited to different applications, situations, needs, and circumstances. The same goes with who you choose to handle your ecom platform. For 2-3 search for internet retailers first 500 and second 500 lists. Pull off all ecommerce companies doing between $10-$50M as an example. Use the builtwith.com chrome toolbar to tell you what platform they are using. Hire someone for $2 an hour via odesk to make a spreadsheet of everything and the make a pretty little pie chart. Now you know what each revenue volume level chooses as 1, 2, 3 preferred platforms. Option 3 as a side note but very important one, is primarily a platform and commerce as a service model with companies like Demand Ware and GSI Commerce leading the market with platform and services including but not limited to customer service for the brand, fulfillment, marketing services, website product photography etc. Their pricing models are based on gross revenue share. ie. SportsAuthority.com does $100M online this year, GSI takes 30% of that to cover everything. (I am not sure who Sports Authority uses, just an example) You can almost pick any traditional brick and mortar retailer and if they have a website where they sell things, they all do, GSI or DW are the people behind the scenes running the call centers, shipping etc. Diamond Candles, my company, who started on Shopify decided to not go with a the market dominating option of Magento for a few reasons. One of which being upfront cost for an agency or on staff magento CTO type. We decided to partner with a newer entrant, Symphony Commerce, which blends the 3rd category model of platform plus service. Rev. cut is significantly smaller than providers in category 3, but still get benefits of volume savings on shipping volume, scalable customer support that can handle rapid growth and occasional spikes without us having to worry about scaling or implementing best practices, and a fully customizable platform as a service so to speak that doesn't require us to have in house tech but where we are essentially renting part time ecommerce engineers from with resumes that list Google, FB, Twitter, Magento, Amazon, etc. So in summary. If you are <$1M in revenue just roll with Shopify. Greater than that but less than $50M ish then I would recommend looking into Symphony. If Symphony is interested in letting you in then you won't have to incur the upfront costs of an agency or implementation and you will have an ongoing partner equally incentivized i your long term success financially which I prefer as opposed to an agency model which economically is incentivized to offer a one time finished product and their revenue is not tied to my financial success. It is the closest thing to an equity partner while returning our full equity.JW
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When creating a marketplace, does it make more sense to focus on stimulating demand first or supply?
Focus on the more difficult side of the marketplace. For instance, if you think it'll be easier to get suppliers, then focus first on getting buyers - always be working on your toughest problem (aka your biggest risk). You'll find some great blogging on Marketplace and Platform topics here http://platformed.info (read the ebook too!)CM
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How important is it for a marketplace startup to drive enough demand (customers) for your supply (sellers) to make a full time living off of it?
It's very important. (first, read this article by Josh Breinlinger - http://acrowdedspace.com/post/47647912203/a-critical-but-ignored-metric-for-marketplaces) The way you achieve success in a marketplace is by driving liquidity for both your supply & demand. Demand-side Liquidity = When users come to your marketplace, they can achieve their goals. Supply-side Liquidity = When supply comes to your marketplace they can achieve their goals... which are almost always to make money. If you're making a large amount of your supply-side users a full-time income, then you're helping them achieve liquidity. Now it's not so black and white and it doesn't always have to be a "full-time income." It depends what their goals are. E.g., 1) At Airbnb, renters aren't looking to quit their day jobs and become landlords full-time... they're just look to earn a substantial amount of income to offset their rent, mortgage, etc. So in this case, I would probably goal on # of renters that earn >$500 / month... and (in the first 1-5 years) try to grow this number by 10-20% MoM... and maybe by just 5% once you're in the mid-high tens of millions in yearly revenue. 2) At Kickstarter, the goal of the supply-side is to get their project successfully funded. They don't care if the project creator is "full-time"... they just want to make sure they meet their funding goal. This is why they talk about their 44% project success rate all the time - http://www.kickstarter.com/help/stats 3) At Udemy, our instructors want a substantial amount of their income to be driven from their Udemy course earnings... so we look at how many instructors are earning >$2k / month.DT
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