Marketplace

Marketplace

Description

Creating a place where buyers and sellers can meet and find what they are looking for

Major variations

Online versus physical. Enabling the sale of physical products versus services or skills. Bringing buyers and sellers together so they can contract with each other, versus taking a contractual role.  

Potential impacts

  • Supporting livelihoods, whether that is by selling items made by artisans or making it easier to find people with certain skills
  • Keeping traditional skills and crafts alive
  • Making it easier for businesses to access the skills they need
  • Acting as an intermediary can enable sole traders, new startups, or the informal sector to get more business, because procurement regulations often prohibit large buyers (businesses, government, and NGOs) from buying from those who are unregistered or do not have a bank account. 

Advantages

  • Many makerspaces naturally act as a hub, with community members who make many different things or have a range of skills, so this model can work well if the hub gets good at attracting buyers.

Challenges

  • A marketplace model exhibits ‘network effects’ – it won’t usually work with just a few buyers and a few sellers, you have to have a reasonable number of both before it will be successful. You need to think about your value propositions to both sides.
  • Think carefully about how to manage quality, as poor quality items or services will reflect badly on the marketplace. If you are acting as an intermediary to contracts between others, be careful with liability issues. If a product fails or service is performed badly, who is liable? 

Complementary models

Training

If you offer training it can be good to help those trained to find work 

Business Services / Consultancy​

You may be able to extend the range of services or topics offered by drawing on a pool of experts in a marketplace

Business model canvas

Key partners

  • Anyone who already has the attention of the buyers and sellers you wish to attract, e.g. a shopping mall where you could have a market, or an artisans’ association
  • Local government or municipality that wants to support commerce
  • Orgs that want to target or support businesses you work with

Key activities

  • Attracting buyers
  • Ensuring an adequate range of goods/services/ skills is available
  • Matching buyers & sellers

Key resources

  • Pool of willing buyers and sellers
  • A location or mechanism that enables them to trade with each other

Value propositions

  • Allow buyers to go to one place (physical or virtual) to access a range of products or skills to meet their needs
  • Enable sellers to access buyers they would otherwise have difficulty reaching, or make the transactions easier in some way.

Customer relationships

  • Depending on the type of marketplace you may be facilitating different types of customer relationships including personal service, co-creation, and self-service

Channels

  • Social media & local advertising
  • Build relationships with sellers & repeat buyers
  • Referrals and word of mouth

Customer segments

  • You may have almost any kind of customer segments for a marketplace, what is important is the match between what the buyers want and what the sellers are offering.  

Cost structure

  • Space (for a physical market) or website & internet costs (for an online one)
  • Advertising, marketing, and vetting costs
  • Costs of subcontractors if you are managing the work
  • Cost of any contract management activities you are performing such as project management or quality control

Revenue streams

  • Charge a commission on completed deals
  • Sell the products/services to the buyer, and subcontract  
  • Charge for access to the marketplace (e.g. a monthly fee to sellers that enables them to sell as much as they want, or a charging rent for a stall in a physical market)
  • Charge for listing or advertising a particular want or need
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