Thursday, March 17, 2022

Two-sided marketplaces

Intro

Two-sided marketplaces are platforms that bring customers and merchants together to exchange services. Examples of such marketplaces are Airbnb, Fiverr, eBay, Etsy, Avito, Farfetch, Auto ru, Uber, BlaBlaCar, Upwork, Profi, YouDo, Apple store, Play market.


Features of Two-sided Marketplace

  • Network effect: the value of a product for a user grows along with an increase in the number of users of the product
  • Two-sided markets fail quickly if the value proposition for one side clearly doesn't match the needs of the other
  • At the start, the “chicken or egg” problem is especially relevant: in order to have more consumers, more offers are needed, and in order to attract offers → more consumers are needed
  • “Offers” are more valuable in this business model, and losing them due to interface complexity, long/difficult review, or any other obstacle is very detrimental to the growth of the platform.
  • They earn in the format of Commission Based, Subscription Based, Lead fees, Advertising Fees

What other metrics are looked at in a SaaS product?

Session value (session value) - the income that 1 session brings to the site / application. It is calculated as the ratio of revenue to the total number of sessions.


Shipping Time - the time of delivery of the goods.


Click-to-deliver / Click-to-eat - the time from the payment of the order by the client to the transfer of the order to the client.


Stock Availability - the availability of goods in stock, i.e. leftovers.


Sell-Through Rate - the ratio of goods sold to the volume of goods received from suppliers. Shows what sells well and what doesn't.


Confirmation Rate - the proportion of confirmed orders, relative to all orders placed on the site.


Average Listing Position in Search Engines - the average position of the site in the search engine.


Reviews Left by Customers - ratings that users leave for products.


Market Share is the market share that a company occupies.

Two-sided marketplaces

Intro Two-sided marketplaces are platforms that bring customers and merchants together to exchange services. Examples of such marketplaces a...