Two-sided marketplace: the clues to create a profitable business

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Firstly, let’s start with the definition of a marketplace.

Two-sided online marketplace is a platform where buyers and sellers find each other. The main website goal is to serve as a mediator and to provide all the necessary functionalities to make the trades profitable.

The major marketplace peculiarity is that it doesn’t owe its own inventory, thus, it’s a retailer’s responsibility to control it. Marketplace owner’s role is to keep under control interaction of his online marketplace clients and third-party vendors.

There are a lot of examples that prove it’s real to run this type of business in an effective way. Among the most successful marketplaces are Etsy, Handy, AirBnb and of course eBay.

So what are their secrets? Well, there are three major points that must be synchronized:

  • The platform is a spot, which brings everyone together;
  • Customers that visit marketplace to purchase goods;
  • Vendors who use a platform to add their products or to offer their services.

Let’s look through some approaches that must be taken in account to create a great two-sided marketplace:

  • User Experience. It’s the most important factor that has an impact on any e-commerce business success. Speaking about a two-sided marketplace, it’s twice as important;
  • Start Small. Scale your business step by step and don’t try to capture the whole scope.

If you’d like to make sure these approaches are working, visit this article and learn more about how the most famous marketplaces, like Uber and Flipkart started their way.

Two-sided marketplace: the clues to create a profitable business

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