Fiverr, Uber or AirBnB, you must have heard of these big names if you are interested in the growth opportunities in the on-demand economy. These service providers have successfully set up marketplaces that connect buyers who need a service with sellers who offer it.
Fiverr generates nearly one million transactions per month. Uber, AirBnB are valued at tens of billions of dollars. It is not difficult to imagine the scale of the opportunities in the service market sector.
create a service marketplace: how do you get started?
To create a services marketplace that successfully connects buyers and sellers, an effective strategy is to find a niche market to grow into and become the big player in that niche.
Do you know how successful service marketplaces started? Etsy started as a community for crafters, but has now become the largest craft marketplace. Fiverr started with a simple option for its users: offer a service for $5 and see how many people are willing to pay for it. Today, Fiverr is the largest marketplace for freelance services.
Start there! You can develop a “vertical” service marketplace with workers who provide a specific type of task/service. For example: a marketplace dedicated to small housekeeping tasks, or car mechanics, or a marketplace dedicated to marketing tasks, etc.
You can also create a “horizontal” service marketplace by providing a wide range of generic tasks/services but starting and expanding in a local area.
After you have done extensive research to find the basic ideas of your marketplace, such as your core niche and your target sellers and buyers, it is time to connect the two sides of the marketplace.
To launch a services marketplace, what are the main things you need to consider?
There are three main issues you need to address when creating a marketplace:
1-The chicken and egg problem: if buyers come to your site but find few sellers offering services, sooner or later the buyers will leave. On the other hand, what attracts sellers if there are no buyers? Each side depends on the other, so the key is to be able to find a balance between acquiring sellers and buyers. Once you achieve this, the network effects will start to kick in and your platform can then grow rapidly. Then you can enjoy the profit from each successful transaction and accelerate the development of your business.
2-Make your marketplace super convenient: if it’s quick and easy for a buyer to find the type of services they need, you’re more likely to complete a transaction. Furthermore, to improve this conversion you need to reduce abandonment, you need a reliable payment system and a comprehensive tracking system. It is very helpful if your website can connect all potential buyers and sellers in a quick and convenient way to give them the best possible experience.
3-Make your platform safe and reliable: as buyers need efficient and reliable services, you need to create a platform where buyers can review, report and evaluate the services they have purchased. This will also help you establish a high level of quality and reliability for your marketplace. You should also make it easy for sellers to manage services and orders, so that they can focus on their work instead of worrying about buyers and the ordering process. Finally, risk should be limited by a secure payment system and instant support services.
Once you understand your market and have the solutions to these three issues in mind, you are likely to create a successful marketplace.
How to solve these problems successfully?
When it comes to setting up the platform for your business, the right solution you need should cover the last two issues: ‘convenience’ and ‘reliability’. You can simply hire developers and build everything from scratch, but this decision will surely cost you a lot of money. A much better solution is to find a marketplace agency that will offer you an all-in-one customized services marketplace platform designed exactly for your needs. The choice is obvious!
