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MenuShould I go niche or be a general marketplace?
So I wanted to start a marketplace where businesses like restaurants or cafes or bakeries can sell off unused or old machines/equipment they no longer use. Would it make sense to be so niche or should I just be a marketplace where businesses can sell whatever unused/old inventory they have? Like unsold clothes?
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Good question. Which idea makes more sense? You could organize a survey to be distributed to a small group of people that represent your potential clients. See where the demand is and make your decision on that. The less-niche approach sounds sort of like Craigslist, which might be hard to compete with. For that reason, I'd probably go with the first idea. But you may want to survey your audience first.
Hello
This is a good idea. I think it’s great to have variety based on what you’re trying to do. Definitely would sound like a site people can sign up on and list their unsold items and with the right SEO you can attract these people and sell them memberships.
First, let me say I think you have a good idea. I think starting out, you should focus on niche. Considering your idea, the riche market you're going after seems to be quite broad (think of all the bakeries/cafes etc. you can find in just one major city).
By going niche, you can quickly become the "go-to" expert in the field. This will help with word of mouth advertising, referrals and especially Google.
Once you've mastered that model, you can consider branching out (including more categories) or duplicating the model for another niche.
If you go broad, you'll be competing with Craigslist, Amazon, Facebook, and a variety of other "generic competitors.
Great idea - good luck with it!
A business ideal with a good cause!
Either niche or a general marketplace depends on many factors:
1. how much money you have or can raise.
2. the management team's capabilities & networks
3. the outcome of the product-market fitness test
4. the level of operating challenges in handling the old items
5. Make a choice between going straight to build a business or split some resources to keep the company survive while slow down the building of the business.
6. The business environment that worth to consider
The points above not exhaustive, but relatively important to help you to answer your question.
Some will say that the right move is to specialize: to finely hone your brand to target a particular niche. The more in-depth your targeting, so the argument goes, the better your chance of convincing your target audience to buy from you. You certainly can’t please everyone, and it’s difficult to establish a unique identity while trying to serve multiple distinct groups.
Of course, others will contend the opposite: that you’ll get ahead by giving your brand common appeal and exposing it to as many people as possible. Niche targeting puts the fate of your business in the hands of a relatively-small group of customers.
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The best way to solve chicken and egg problems for marketplaces is to prove market need on each side independently first with a low-cost MVP-type test. Once you've proven the market on both sides with metrics it is much easier to leg in supply and demand with a strategic or enough funding to match a market on a local or niche level to ensure liquidity. For a deeper analysis, here is a post on medium that I wrote... http://bit.ly/1k2vYbY Also, feel free to schedule a call with me if you'd like to dig deeper.DK
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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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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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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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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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