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MenuAre there any good examples of marketplaces that grew by focusing on the supply side first?
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Yes there is!...A marketplace is a platform where vendors can come together to sell their products or services to a curated customer base. ... Examples for marketplaces Which grew as a result of focusing at the supplies end are large companies with huge inventories like Amazon, Rakuten or eBay or niche platforms like Etsy (handmade crafts), Runnics (sportswear for running) or Shop. All these Marketplace companies also had a better experiences by Focusing at the suppliers side or angle to better it's development Path.
If you wish to inflate supply side without user-activity, there are several good examples for that. It is however interesting to know that "supply side" is not only the one factor that influences the market place.
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There are many examples of marketplaces that grew by focusing on the supply side first. These include Amazon, Alibaba, eBay, Uber, Airbnb, and Foodspotting.
Marketplaces that focused on the supply side first include Amazon, Alibaba, and eBay. Amazon started by selling books while Alibaba has succeeded in China by selling goods. eBay launched with a focus on classified ads while the majority of its business is now in online auctions.
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Question - how do you attract and retain demand if you don't have supply ;). Lenny R has an incredibly thorough series of articles on the topic of marketplaces - https://www.lennysnewsletter.com/p/how-to-kickstart-and-scale-a-marketplace.
Related Questions
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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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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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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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Freemium v.s. free trial for a marketplace?
It depends on a number of factors but I'd boil it down to two key things to start: 1) What is your real cost to provide a free plan or trial? 2) Who exactly is your customer and what are they used to paying and who and how do they pay today? When you say "online workforce marketplace" it sounds as though you're placing virtual workers. If that's the case, or if you're paying for the supply side of the marketplace, the question is how much can you subsidize demand? Depending on where you're at in the process, I'd also question how much you can learn about the viability of your marketplace by offering a free version, assuming again, that free is actually a real cost to you. I was part of a SaaS project that started charging people for early access based mostly on just a good landing page (we clearly stated they were pre-paying) and were amazed at the response. I've also run a SaaS product that offered free trials and realized that the support costs and hand-holding and selling required to convert from free trial to paid wasn't worth it, this despite the product's significant average ARR. You might be better off providing a "more information" sign-up form (to capture more leads) and let them ask for a free trial while only showing your paid options. I've been amazed at the lead capture potential from a simple "have questions? Click here and we'll contact you" This is all the generalized advice I can offer based on the limited information I have, but happy to dive-in further if you'd like on a call.TW
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What's the average CAC value or range for a Marketplace client?
I think you're looking at this the wrong way. Your customer acquisition cost is not something you should benchmark against other businesses. Without knowing more, like your short and long-term goals, it's impossible to answer. Two companies with similar business models may have different answers to this question. A venture-backed startup trying to keep up with aggressive revenue goals may be able to stomach an astronomical CAC. A bootstrapped startup that is not seeking venture money may aim for slower growth and much lower CAC. I suggest setting up a call with a marketing or finance expert to determine what CAC is appropriate for your company and how to get there.TL
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