Monthly Marketplace Article Roundup: August 2018

By: Charles Costa | August 30, 2018 | Marketplaces

Have leading marketplace operators lost touch with their sellers—the people responsible for their success? Are investors finally coming to the realization that marketplaces are the future of commerce? Has Amazon met its match in the battle for dominating the healthcare space?

In this month’s roundup of marketplace news, we answer these questions, and more:

1. Why Online Marketplaces Fell Out of Favor—And Why VCs Should Love Them Again, Forbes

Online marketplaces have been significant drivers of the modern economy. One only needs to look to the power and scale of commerce giants such as Alibaba and eBay. Even transportation companies such as Uber and Lyft fall under the marketplace umbrella.

Despite the numerous examples of successful marketplace entrepreneurs, many venture capitalists are shunning the marketplace business model because it requires more effort to build out these companies as opposed to direct-to-consumer brands such as Casper, Dollar Shave Club, and Bonobos. The common thread between various consumer brands is that they deliver significant short-term returns but fizzle out as time goes on because imitators cut into the sales and profit potential.

In contrast, marketplaces are more of a long-term play. While they carry more risk, they deliver higher rewards in that they’re difficult to overtake once they hit critical mass. That said, by neglecting the marketplace business model, venture capitalists are leaving significant amounts of money on the table, and are doing a disservice to their shareholders.

2. How Walgreens is Using an Online Marketplace to Compete Against Amazon, Digiday

In light of Amazon acquiring pharmacy startup PillPack, Walgreens is stepping up its game in the healthcare space, by launching a marketplace for consumers to find and schedule appointments with medical professionals. To date, the app known as Find Care Now has been downloaded a whopping 50 million times.

Although Amazon is a formidable opponent for Walgreens in the medical space, Walgreens has a competitive advantage in that it’s already associated with health and wellness. While Amazon is able to undercut competitors in the retail and grocery space, for them, health and wellness is more of an afterthought.

As this battle is just getting started, time will only tell whether a hybrid of online/offline care can compete with an online only model.

3. Marketplace Merchants Sing the Blues, PYMNTS

Although optimizing for the seller experience is essential for a marketplace to be successful, it appears that Amazon, eBay, Walmart, Etsy, and other leading marketplaces are starting to put that advice aside by focusing solely on the needs of buyers.

Amazon recently announced that it’s enabling invoices to be sent to buyers, allowing them to make payments with an extended due date. It’s a logistics nightmare for sellers because they’re no longer getting paid when they’re shipping purchases.

Walmart on the other hand is enabling in-store returns for online purchases. This has marketplace sellers crying foul as it puts them in direct competition with the retailer’s physical stores.

This backlash from sellers illustrates the balancing act marketplace operators need to maintain in order to be successful. Ultimately, marketplace operators need to remember that sellers are the ones investing in the platform. As such, their needs should be be given a higher priority compared to those of buyers.

4. New eCommerce Marketplace OmniBazaar Wants to Make Bitcoin More Accessible, eSellerCafe

Anyone who has followed the news recently likely has heard plenty about cryptocurrencies such as Bitcoin. Although cryptocurrencies are a hot topic in the digital world, for many the currencies haven’t really caught on because of associated risks and logistical issues, such as converting the currencies to cash.

OmniBazaar is a new marketplace that is looking to change that by making cryptocurrencies more accessible. What sets OmniBazaar apart from traditional marketplaces is the fact that by default sellers are able to accept Bitcoin, Ether, or OmniCoins (which are the cryptocurrency created by the platform operator).

By having users transact their funds directly, rather than through a bank, sellers are able to save 90-100% of the fees that would normally go to a bank. Although lower fees are a major advantage for OmniBazaar, it doesn’t cancel out the fact that cryptocurrencies are extremely volatile and they can lose value overnight.

To learn more about how the marketplace business model can help improve your profitability, check out The Kahuna Blog. Simply click the button below!
 

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Author: Charles Costa

Charles Costa is a content marketing manager who specializes in helping companies grow, one word at a time. Prior to Kahuna, Charles worked with brands such as Airbnb, Iron Mountain, and IBM on their content marketing efforts.

Charles' work has been featured in the Huffington Post, and he also was a contributor to the developer publication, Sitepoint.

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