Whether your marketplace has been around for awhile, or you’re just getting started, one of the biggest threats to your platform is leakage. This occurs when buyers and sellers choose to transact outside of the digital marketplace platform, often because the marketplace operator isn’t delivering enough value to justify their fees.
How can you prevent leakage? There are a few answers to that question, but if you examine Kahuna’s 3 laws of marketplaces, you’ll find that the 2nd and 3rd laws—building for trust, and providing autonomous value—are crucial components of improving buyer/seller retention and keeping leakage at manageable levels.
Preventing leakage requires marketplace operators to approach their operations in entirely different ways. For example, realizing that reputation systems are more than a way for buyers and sellers to rate each other. They’re also support channels to enhance the transactional experience.
Looking for more insights into how to retain buyers and sellers? Check out the video below!