Successful Marketplace in Terms of Collaborative Economy

Some time ago we published a post called How to build peer-to-peer marketplace. Not only we saw the opportunity to show our clients that it is a pretty easy thing to do nowadays, but also wanted to indicate a new trend and to help you take advantage of it.

We now see that the number of people (and thus our potential clients) interested in this trend keeps growing, and with this post we’d like to start a new series of notes dedicated to the idea and implementation of web marketplaces.

Now, according to the latest LeWeb Deck created by Jeremiah Owyang, the year 2015 is the year of the crowd. The idea of collaborative economy has impacted all areas of society and over $8 billion have been invested into such business by now.

Successful Marketplace in Terms of Collaborative Economy

Collaborative economy includes two basic terms:

1. Collaborative consumption, when goods are shared or rented, and/or sold or swapped after use.

2. Peer-to-peer interaction, when people provide goods or services to each other.

Note that while collaborative consumption explains the group sharing opportunities, peer-to-peer interaction requires a special place named marketplace to take advantage of those opportunities.

Thus, collaborative economy allows people to:

  • consume needed goods at lower cost.
  • earn money by sharing durable goods they already own and have used.

Both of these actions do not require neither specific knowledge nor initial investments. However, what they do require is a group interested in a specific type of goods and a place, where you can publish your offers to this group and manage them. This is basically what is called a peer-to-peer marketplace.

The main advantage for both its users and creators is that a peer-to-peer marketplace doesn’t require intermediates. The platform itself is the intermediate, which in a long-term perspective appears to be extremely efficient since the growing number of users does not mean proportionally growing costs to maintain that platform.

On the contrary to the traditional marketplace, a peer-to-peer marketplace implies that a user can be a seller and a buyer at the same time. That makes it much easier to launch such marketplace, as the critical number of users required to make the platform appealing for other potential buyers and sellers is much lower. No wonder peer-to-peer marketplaces become a trend nowadays.

However, whether all goods that can be shared and consumed via marketplaces are indeed needed, profitable and appealing to your users? There are two conditions defining this:

1. The goods should be pretty expensive to buy, but pretty cheap to share with additional users.

Example: a car or a couch for sleeping are pretty expensive to buy for one-time use, but if you are to share them, you will spend much less money to get them back into its initial state (usually just refuel the car or clean the sofa).

2. The goods are usually under-utilized after being used for initial matter.

Example: expensive tools or an empty office space can be easily rented if you know you won’t need them anytime soon.

If the goods for a new marketplace fit these criteria, it is only up to its creator how well will he coordinate its work to make it attractive and time-effective for buyers and sellers.

Time-effective marketplace

Note that we underline the importance of time efficiency, because the only initial investment of marketplace users is time. When they make a final decision on whether they want to offer a particular good or not (not knowing if they are to earn money eventually), they often think in terms of "Whether it’s worth my time?" Your goal here is to convince the user that the marketplace interface was done to cut the time needed to publish an offer and make the offer publishing process pleasant as much as possible.

In our next posts we will talk about marketplace validation, best practices and other useful stuff, so stay tuned!

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