Peer-to-Peer Marketplaces: Best Practices
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Though peer-to-peer marketplaces is a relatively fresh trend, many marketplaces have already become known all over the world. Uber, AirBnb, Etsy are the examples of well-known marketplaces. They all made the unique way to success. We decided to analyze their stories and extract a few best practices for our clients and those who want to create a successful peer-to-peer marketplace. Let’s go!
1. Choose your niche
You might think that covering a few niches at once (for instance, creating an all-in-one marketplace for your locals) is a great idea to achieve success since it is useful for everyone. However, as general practice shows, all successful marketplaces started with aiming on a single niche. Only eBay could make it and cover all types of goods, but it had started as a side hobby back in 1997 when it was the first service of its kind.
Besides, having a specific niche means you can focus on bringing the highest quality of the services that you're limited to. Some marketplaces require higher level of anonymity, others can provide users more info on sellers to build required trust. The better you know your clients, the better you can satisfy them.
Example #1: Oakland’s Single Parents’ Network (built on ShareTribe, by the way) is aimed on helping busy parents in their daily activities. To build trust, an invite from an existing member is required to join it.
Once you have achieved success in a targeted niche, you can experiment with new niches.
Example #2: TaskRabbit, which is often explained as 'eBay for real-world labor', was first focused on allowing its users to outsource jobs and tasks to others. In 2013 the company started offering businesses to hire workers from the TaskRabbit users.
2. Follow your idea
Your business is foremost different and unique because of… you. It is you who believes most in your idea, knows everything about it and thus the one who can make it outstanding and great. Use your expertise and experience in making your marketplace standing out. Think of how you can make it appealing to your target audience and bring more than people expect.
We underline the importance of that idea because many entrepreneurs often lose their enthusiasm due to small fails and/or make decisions based on the competitors’ actions. You are the only one who knows the problem you’re solving best and the way it could be solved perfectly.
Example #1: Although Uber is generally perceived as an advanced form of taxi service, the company has once said that customers pay more than for a usual taxi because their cab service is not only reliable, but also punctual and comfortable. That's why they also have Uber Black, a service offering luxury cars exclusively — because they are extremely comfortable to ride in!
Example #2: Two guys, one in the U.S., another in Greece, wanted to work together but didn’t have an opportunity for that. So they built oDesk, which bit by bit turned into a profitable staffing firm, where employees were manually selecting people for clients having vacations instead of allowing them to do that on their own via the website. The company could develop both directions, or it could remain a staffing firm only (having a few moneybag clients already), but the team decided to switch to the marketplace business and has become the top freelancer site that is now known as Upwork.
3. Help your sellers
When you start, it is pretty easy to get the attention of buyers — you just need to deliver the things they're looking for.
Think how you can be attractive to them when you are only starting your marketplace. Maybe you can offer interesting services to the sellers with a big client base or guarantee them to bring paid traffic to their goods, or simply ask them what’d they like you to do!
Example #1: Depositphotos, one of the most popular stock photo sites, has a department of people who help top image sellers to correctly tag and list their content so that it would be easier to find it (and thus bring more money).
Example #2: Craigslist started back in 1995 as a series of emails distributed by its founder to his friends. Later the site was built and popularized mostly via word-of-mouth. That approach is still useful if you’re offering something really unique and useful.
4. Give people reasons to stay
A marketplace user can either buy goods or sell them. What else can you offer them to stay? Some marketplaces offer social functions helping users to communicate and build a solid community, others post valuable content helping users to earn more money, others have user experience so great you will want to get back to it again and again. The best strategy is of course have all of that.
Note, you must give a SOLID reason to stay on your site. With an empty forum and boring content an amazingly looking yet poor list of goods won’t help you.
Example #1: Probably the most socially advanced peer-to-peer marketplace is Etsy. It has blogs, forums, ratings, a feedback system, live workshops, online newspaper written by both Etsy staff and site members, etc. That’s because communication is a free marketing tool for Etsy.
Example #2: Fiverr, a global online marketplace offering tasks and services, offers reputation functionality for sellers (just like many other marketplaces). Sellers with higher reputation not only attract more buyers, but also get the so-called ‘gig extras’ which allow to charge more for their offerings.
5. Attract your clients
Nowadays every business fights to drive traffic to the website. However, people are overloaded with ads, products, services, companies aimed to make their life easier and better. The only way to be noticed is to be creative in everything you do — user experience, design, promotion, PR, marketing and so on.
How you are going to unveil your creativity depends on the goods you want to offer on your marketplace. We can't give you recipes, but we can show you some good examples how now successful marketplaces have been reaching their sellers:
Example #1: In 2009 AirBnb has received $200.000 from Y Combinator. Still, they kept earning only $200 per week with their service, until they finally realized that the photos of places are of too low quality. So they went to each house in New York City offered on their site to make photos by hand. That creative move had made them finally growing and doubled the income within a week.
Example #2: Uber constantly drives attention by making unusual promotions and offers to the passengers. The most recognized is “Uber Ice Cream”, which allowed people to hire ice cream trucks instead of usual cabs. In November 2015 has teamed up with U.S. government to provide free rides for military men and women having no ways to get to their jobs, and in India Uber now offers riding hot air balloons!_____
For more advice on creating a successful peer-to-peer marketplace read our previous blog post called How to build peer-to-peer marketplace.
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