How to launch a Consumer-To-Consumer 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)

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.

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.

Hone decor / furniture industry is one of the highest profit promising industry today. The profit margins on home decor ranges from 20% - 45% depend on the price of the product. If you're looking to get quickly popular, I suggest you start with the online store and promote it on offline as well. Keep the margins low initially so that you can attract more buyers. As the business grows, reinvest the amount back on the business so that you can stock more varieties. All the very best.

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.