November 16, 2018
The State (and Future) of Digital Marketplaces Webinar
Whether you’re just getting started with marketplaces or already have a vibrant property, there are plenty of approaches you can take to up the ante with your classifieds marketplace. Failing to do so puts your property at risk of extinction. With that in mind, here are 3 key elements that are at the foundation of most successful marketplaces.
Successful marketplaces are more than properties which aggregate content from buyers and sellers. The operators also focus on delivering exceptional experiences to their end users. In many cases, those experiences wouldn’t be possible without a marketplace to facilitate the transactions.
Litstia for example enables users to trade their unwanted goods for “Ink” which is the marketplace’s custom currency. In turn users can then use their Ink to purchase other goods on the platform. The core value add of the platform is the reputation system and purchase guarantees that provide piece of mind. These trust signals help to reduce hesitation and ensure transactions go through in a timely manner.
Going along the theme of removing the friction associated with transactions, you can take a hands-off approach and still deliver an exceptional experience. Carousell for example is a classifieds marketplace where users can create product listings in seconds by snapping a photo and uploading it via the mobile app. This is opposed to the old school way of taking photos, loading them to a computer, and then uploading them to a website.
By developing unique experiences that provide a “wow” factor, in many cases you can get users hooked, so you can focus on growing revenue rather than competing on price.
If you’re already running a platform, you’ve probably leveraged a technique or two to get your marketplace flywheel moving. That being said, having high levels of liquidity within your marketplace only makes it good enough. You’ll be making money, but in order to truly stand out, your platform needs to add enough value so that you can out win the competition. Going back to the example of Carousell, they enable users to list their goods in a manner of minutes.
As you’re developing your marketplace, ask yourself, “How can I enhance convenience or usability?” By leveraging innovative thinking, you can take take a modest niche and turn it into a vibrant community for your marketplace.
While developing a large and vibrant community is an essential part of running a successful marketplace, as you grow, it’s still important to remain true to your early adopters and power users. By engaging with them and catering to their needs, you’ll increase the odds of them referring people to your platform organically.
eBay for example has what was formerly known as their PowerSeller program. This is where top sellers would receive recognition, premium service, and other unique offers as a reward for meeting specified revenue quotas.
Another example of a marketplace focusing on their core users is AbeBooks (before their acquisition by Amazon). They catered to their seller community through exclusive forums, seller meetups, and an advisory board for sellers, by sellers.
To learn more about how the marketplace business model can help improve your profitability, check out The Kahuna Blog. Simply click the button below!
A Bi-Weekly Newsletter Focused Exclusively on Online Marketplaces