Monthly Marketplace Article Roundup: June 2018

By: Charles Costa | June 28, 2018 | Marketplaces

As June comes to a close, let’s review the top 4 articles that explore the rise of digital marketplaces:

1. Etsy Raises Its Transaction Fees and Releases New Seller Tools

In a move that (unsurprisingly) is triggering backlash from their seller base, Etsy, the online marketplace known for buying and selling crafty goods, recently announced it’s raising its transaction fees from 3.5% to 5%. The primary driver of this shift is that Etsy is looking to increase its digital marketing spend by at least 40% in 2018.

Although this will cause some sellers to leave the platform, Etsy is offering two new subscription packages in addition to its free tier in order to incentivize users to stick with the platform. These premium offerings provide enhanced seller tools such as more control over customizing shops, discounts on custom marketing materials, a complimentary web address, and more.

While raising take rates (transaction fees) of a marketplace is bound to cause some sellers to transact off the platform, Etsy is offsetting that risk by turning its platform into a comprehensive ecosystem of resources for sellers (namely by providing a robust eCommerce platform) , helping sellers work smarter rather than harder.

2. Online Fashion Marketplace Poshmark Pays Out $1 Billion in Sales

eSellerCafe contributor Richard Meldner reports that fashion marketplace Poshmark has paid over $1 billion in sales to their community of over 4 million Seller Stylists. Seller Stylists not only sell goods, but also curate looks.

Poshmark has an interesting business model in that its business revolves around social commerce. Rather than providing integrations with social media channels, Poshmark created a native shopping community where buyers and sellers can provide each other with fashion advice and tips.

What can other marketplaces learn from this success story? As a marketplace operator, you need to focus on delivering an experience and fostering a community, rather than simply providing a platform for buyers and sellers to meet.

3. Facebook Teams Up with Porch, HomeAdvisor and Handy for New Marketplace Home Services Offerings

Up until recently, Facebook Marketplace was a polished version of Craigslist where users could post listings and communicate via the Facebook platform. Aside from integration into the social network, there really wasn’t any competitive advantage compared to platforms such as Letgo and OfferUp.

The common thread of all these properties is that they are/were unmanaged marketplaces which is where operators take a hands off approach to managing transactions. In essence the properties are just platforms for buyers to meet sellers and vice versa.

On the other hand, managed marketplaces are properties where the operator takes a more hands on approach to assisting buyers and sellers. This can be done through methods such as offering insurance/guarantees, or verifying the authenticity of goods.

GeekWire contributor Nat Levy reports that Facebook is enhancing its marketplace by partnering with Porch, HomeAdvisor, and Handy to connect users with home improvement professionals such as contractors, plumbers, and house cleaners. Rather than taking a hands-off approach to vendor management, the trio of home improvement marketplaces provide reputation systems among other essential features to increase user safety and improve overall satisfaction.

Up next? Perhaps offering babysitting services, a la UrbanSitter or It only makes sense given the fact that Facebook is nestling their way into every aspect of a person’s life, becoming the person’s go-to resource for any service or need they may have.

4. The Rise of Specialized Marketplaces in eCommerce

Anyone who has followed the news recently is well aware of the fact that retailers have been taking devastating hits the past few years due to the rise of online commerce and various other industry shifts. While that’s a given, how retailers can save themselves isn’t necessarily as obvious. Is there any way for retailers to save themselves from extinction?

Alex Moazed, Founder and CEO of Applico, says that the best way for retailers to survive is to buy out niche marketplaces that are relevant to what the retailers offer. The logic behind this is that niche marketplaces have a (relatively) easier time fending off the competition, than traditional retailers.

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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