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The main questions before launching a marketplace
15 July 2021
Miniseries e-commerce features final part
In our last episodes, we’ve been talking about lots of topics around the marketplaces sector. But one topic still remains: what are the main questions before launching a marketplace? Hugues Odasso, our Channel Manager, will explain to you the five questions to ensure your project’s success.
1. How do I sell my services?
Thanks to our numerous projects and the expertise we acquired at Cocolabs, we are able to give you five ways to answer this question given the nature of your service:
If it is commoditized, which means you can describe it and have the price fixed in advance. In that case, you will determine the price with three potential ways :
Per unit, like for the number of nights in a hotel like on rental marketplacesor like Misterbnb, a platform like airbnb that helps the LGBTQ community finding accommodations.
Per seat, for example when your book one at the cinema
Service based, which means the price is fixed in advance like on the platform Co-racer, a rental marketplace that lets you book an experience on European race tracks.
If it is uncommoditized, meaning that the booking requires a long and deep conversation between the two askers, you can have two ways of fixing its price:
The quote way, which means the price will be discussed between the asker and the offeror. Spacefy, a renting space platform, is using this model.
Or the request for proposal, which is a one to many discussion started by the offeror. Connecting Freelance, which connects companies and SAP freelancers, is a good example for this kind of platform.
2. Who will initiate the conversation?
You have two options for this question:
The offeror is exposing its services, and therefore will initiate the conversation before the booking and payment process
The asker expresses its needs and the offeror answers it if he is available
Obviously, the choice remains to the operator of the platform, considering what he considers to be the best for customer experience. In the end, the most important part of the business is that buyers and sellers are able to meet.
When choosing how you will manage your users on your platforms, two marketplace models are available:
A closed platform, where the operator will have to verify some or each user to validate them in order to enter the marketplace. This model often takes place on B2B marketplaces and e-procurement platforms.
The choice of model really depends on the value you want to deliver on your marketplace platformand on the revenue model. This is why you can also have a Switch Platform. Which means a platform where each asker can also be an offeror. This model can only take place on a platform where both users have the same user level: namely B2B or C2C.
4. What is my business model?
6 business models exist within the marketplace sector:
Commission based, where the operator will take a commission on every booking or sales. As an example, we can think of Airbnb or 360Travaux, a service marketplace to find builders for your home renovations.
Subscription, where the users will pay to access the platform and really use it, with a try out period or not. It is the case for Malt or Fiverr, freelance marketplaces.
Lead based model, meaning that if there are no transactions, the operator will earn money on every lead caught as a compensation.
Freemium or Ad based model, which is free but will need payments to unlock certain features.
Listing fees model, for when every time there is a new ad, you have to pay for it to be officially published.
Non-transactional model, where it is only a matter of displaying services. It often happens for governmental websites or NGO like DCRA, a marketplace that brings on-demand services to the public sector.
So far, there is still one last question that you must know about before starting a marketplace :
5. What essential features do I truly need?
Thanks to our experience we have seen a lot of clients wanting a large scope of features: they only faced more problems, they wasted time and money building non-essentiel things on their platform. This is why at Cocolabs, we focus on what is really important for your business : indeed, the 20% of your features will bring you 80 to 90% of the value.
To help you with that, we accompany you to create a Minimum Viable Product that will give you insights on what is essential for your successful marketplace.
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