Have you know the business model of online marketplace?



If you are on the internet as of now, you must have heard about the word “marketplace”. Yeah, Online marketplaces are the future of the internet community. In fact, the collaborative economy is funded more than all the social networks like Facebook, Twitter, Linkedin, etc.


This is interesting, right? Yes, but most of the entrepreneurs are don’t aware of the revenue or business model of a marketplace website. This article is just to clarify the scenes behind the online marketplace.

Commission model:

Generally, the marketplace works on the basic model of commission mode. The commission mode is nothing but the fee is taken from the transaction between the customer and provider. When the customer has successfully finished the payment process, the marketplace facilitates the transaction and deliver the value to the provider. The marketplace charges the percentage of commission for the whole process.

The percentage is based on the rules and regulation of the marketplace agreement. It depends upon your user acquisition strategy. Some of them make lower commission initially and gradually raise it when the customers are increasing. Some of them make it free for initial providers and customers as long as for a period of time.


I also recommend you to go on with the commission-based model if you are willing to start the marketplace in the future. But the real challenge is you have to provide the unique value to the provider so that they are interested in using your platform for so long time.


To make this work, you have to increase your customer base on the platform as they are the real value for the providers. You should have to be consistent across the user community like promoting the offers, discounts on the products or services listed. This makes the users refreshed and stimulates to buy more from your website. Some marketplace software solutions providers like RentALL script can assist you in building the sharing marketplace from scratch. I would recommend this company for sure. Recently, RentALL released the Airbnb Clone Script with updated features.


In cases like the marketplace is about dating, hiring services, informational reviews, there is no transaction involved. So how would the marketplace owners make a commission? There are other ways like (subscription fees, membership fees )to have the revenue stream in these types of marketplaces. 


To know more, visit: https://www.radicalstart.com/blog/

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