What are the best business models for charging users of a marketplace?

Alex Glenn
Marco Sánchez has some great answers on this subject, but. I would just add a few more options that are working well at scale:
  1. Pay to respond to a bid (for service-based sites like Thumbtack). The reason Thumbtack settled on this business model is because it (a) reduces leakage – lost revenue if/when customers and suppliers interact off-site, and (b) betters user experience by reducing flagrant bidding (providers bidding on any job, regardless of whether or not they can accomplish the task) because only very serious and confident providers will pay to show a bid to a customer.
  2. Traffic directing / SEO / rank-and-rent. I grouped these three because they are essentially the same model. Large platforms with the most _____ profiles of professional or one type of good rank. When you group numerous profiles into a “category” listed on a category page, those pages rank. This search volume can be used to add value to your main brand/site – not using the marketplace as a business of its own, but instead loading it to a sub-directory on your main URL (i.e. “…com/software-developers-in-texas/” pulls up a completely different website folder which is your directory). When you have these rankings and traffic, you can choose to direct the traffic off profiles (“book this provider”), rent the profiles themselves, or just leave the directory attached to your core domain name and reap the SEO benefits daily.
  3. Data/cookie/email monetization. This is a strategy for niche marketplaces. Everyone buying in a niche marketplace can be retargeted for specific services from you or another brand of yours using a number of means (browser retargeting, CRM retargeting, email marketing…). Focusing on building an enormous list of users in a niche can be more valuable than trying to capture incremental revenue per transaction made or per subscription sold.

I apologize if some or all of these simply do not apply. If you would like to skype me your site/niche, I can give you some suggestions: right2revenue

Leave a Comment