Marketplaces: managed, lightly managed or unmanaged, the different approaches being used today

Reading Time: 2 minutes

In its purest form a marketplace is simply the introduction of a willing buyer to a willing seller.

But in the online world, it can get complicated if the buyer and seller do not see eye-to-eye, must the buyer always beware? That’s where the level of management from the marketplace itself should come in.

In an unmanaged peer-to-peer marketplace such as Ebay, the buyer relies upon the review process. Generally this style of policing and the impact of negative reviews often resolves issues, but not always. For the buyer it can be a war of attrition – filing reports, writing emails, threats of negative feedback and more which may or may not fix the problem. Ultimately, the buyer in an unmanaged marketplace has to place his faith in the seller upon the volume, the satisfaction and the reliability of the reviews (which is a different can of worms).

 

 

 

 

The lighter the touch generally means the lower the marketplace fees and these are often passed on to the consumer. But would you pay more for the comfort of knowing, that if you are dissatisfied, or had a faulty product, that the marketplace will step in and resolve the problem? And if so, how much more would you pay, 5%, 10% or even $100 more for a laptop

 

At the opposite end of the scale sits marketplaces like Open Door. In the US, if you want to sell your house, Open Door aren’t just the agent, they will buy it from you. When all is said and done, you will probably pay about 50% more than market rates. So instead of paying say $15,000, your real cost is $22,500, but you have an online estimation in 5 minutes, just one inspection from Open Door, no repairs, no hassle and you can have your money within a week. A highly managed marketplace, a completely new user experience and much more value.

 

Like any other business there are good marketplaces and bad ones, both managed and unmanaged, but the bar has been set high. So, if you are looking to start a marketplace, think about the consumer, make sure the business model is sound and most of all, add value for sellers and buyers. As more and more marketplaces start to pop up, consumers will only support the ones that add value, the rest will struggle. The buyer will beware, but so should the marketplace.

CEO and Founder @nabooki_online serial entrepreneur and superdad.

Comments

comments

You may also like...