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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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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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Holding funds in a 2-sided marketplace?
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.MA
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What support software do most marketplace startups use? Is it custom, or a SaaS product like Zendesk, Desk.com or Uservoice
Your support software should cater to your needs, depending on how your business operates. Fiver uses Vanilla forum and Zendesk. Thumbtack uses Zendesk. Not sure about AirBNB, their help center seems to be custom. Depending on how well funded your are, I would recommend starting with a free plan with one of the help desk SaaS products, or even using open source ticketing platform. Then, as your needs grow and you need integration with your marketplace, there's no reason you can't scale and migrate.VN
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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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How to solve a chicken and egg problems for a marketplace like Uber? What is the best way to acquire demand side?
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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