A two-sided marketplace gives customers an opportunity to directly communicate with vendors and vice versa, making all commercial processes more transparent and secure for both sides of the bargain. If we take a look at some real market operating examples, these are online marketplaces for most various business niches like Airbnb, Etsy, Uber or Upwork, to name a few.
In eCommerce, a two-sided business model is a very user-oriented, commercial relationships enhancing cause that can help the digital commerce industry handle and solve lots of problems, mostly the ones related to scams and unsatisfied customer audiences.
Go for a two-sided business model if you want to stay in tune with the times
An online marketplace business model as a whole is already a step towards meeting modern, evergrowing demands of consumers – they give more freedom of choice and readily-available alternatives to buyers. For sellers, such commercial spaces are budget-saving and bring more customer attraction opportunities due to centralized promotion principles.
Although, you still may have to go an extra mile to establish one
An implementation of an online marketplace with open customer-supplier interaction possibilities requires much effort. In order to really hit those sales and stay at the decent level of the game, you’ll need to take numerous aspects into consideration – the supply and demand management, the system flexibility and accessibility, the all-around user satisfaction. All that while handling the inevitable seasonality fluctuations.
All that becomes pretty achievable, however, if you follow a couple of underlying factors-
Payment system that can handle scaling.
Many striving market players out there go for the most accessible, available ‘out of the box’ payment system in order to keep everything simple both for them and customer, as well as implement their solution fast and at once. This can be a grave mistake, as you should always keep scalability in mind (if you’re ambitious enough, that is). Once your marketplace grows in terms of audience, products, etc., the initial payment model may not be able to handle everything properly anymore. And the drastic change of the system may also spawn consequences, as the long-acquired customer audience got used to the way things are done on your platform from the get-go. Think about custom open-source solutions. Yes, they require more budget and more effort. But may pay off thousandfold in the future.
Flexible incentive efforts.
Regular management of constantly changing supply and demand ratio, which is a standard thing for two-sided marketplaces, can be pretty tricky. Economies go through ups and downs, which can bring the most unexpected effects for your marketplace operation. A crucial thing to work out in this aspect are incentives for vendors working on your platform that would motivate them to provide services during the hard times.
Your platform houses numerous product suppliers and it’s nearly impossible to control the level of service they provide. But you still need to keep everything at a good, customer-satisfying level if you want to be successful. You cannot dictate anything or gain full control, but you can provide standards, user guidelines, and rating systems. The latter is the safest and sure way to help everybody using your platform define mediocre from truly decent. Employ gamification and you may just be a step ahead of those trying to take advantage of you right on your ‘property’.
Segmentation of services.
If we take Upwork once again, services that freelances can provide for you there are kind of tiered – you can cooperate by either a fixed-price or an hourly rate model. This is another level of flexibility you can add up your platform with. This is also a great way to boost profits while enhancing the vendor-customer matching possibilities.
Automation of data-related processes.
The data you accumulate throughout the operation of your platform increases exponentially and you need to handle that somehow (especially, if we’re talking about scaling). Fortunately, there are advanced technologies available right now to help you do that, like big data, AI, and machine learning. Employ these and you will be able to predict the demand and enhance consumer-supplier matching even further on top of automating data collection, analysis, and processing aspects.