3 good reasons to create my online marketplace as Airbnb or Etsy

Article by Mohand Bencherif - 08 Sep 2017 - 4 minute read

Uber, Airbnb, Etsy, Craigslist or Drivy are services that you would find it hard to do without.

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Their particularity? These are all companies that handle thousands of transactions per day without ever having met their client (or almost). Their secret? To propose only a service of connection between buyers having a need and offerers seeking to make their goods or their competences profitable.

Reason 1: marketplaces are a very profitable business model

Marketplaces are part of a scalable business, which means the more you grow, the more money you make. Unlike more traditional businesses where you have to invest or recruit to grow your business, with a marketplace, every new market conquest costs you less than the previous conquest.

Marketplaces do not have inventory risk. A marketplace must invest in the acquisition of its suppliers (sellers or renters), but once these providers and their offers are referenced, you have no additional daily costs. Each order or reservation will then bring you an immediate benefit. Conversely, an e-merchant must pay for his goods in advance, store and ship them for each order, without the guarantee that its product will be sold or not be returned.

Finally, the main asset of a marketplace is its community. So you have to create an emotional connection with your community. Let's just see what the announcement of the closing of the Alittlemarket platform caused among these 100 000 sellers. A real storm...

Reason 2: Have no regrets when you learn that someone succeeds in this project you wanted to lead

The mechanisms of creativity that lead to formulating an idea are very complex. However, the fact that we can find multiple examples of simultaneous inventions in the history proves that the ideas are all around us. We do not create them, but we pick them up because we are more aware or more sensitive than others to the problems they solve. But sometimes, it's possible that several people "capture" the same idea and both bring it to life, as it was the case with Deezer / Spotify, or with Youtube / Dailymotion, or with HomeAbritel / Airbnb ...

Having an idea is not enough. An idea that is not executed is a simple thought.

There's no such thing as a bad idea, only bad execution.

How do you react when you learn that "your" idea, the one you bring up alone without anybody whispering it to you, has been made real by a perfect stranger, who's now making a fortune out of it? You probably got it bad.

So to avoid getting there, it's best not to wait and start immediately. The right time to start is today. Especially since it will not require more than a few hours of investment to create your marketplace, configure it and attract your first offerers.

Reason 3: because it has never been easier to create your online marketplace

It was commonly said that you needed $ 5 million to create a startup back in 1995, $ 50,000 in 2000, and only $ 1,000 in 2015.

The very rapid development of computer technologies, coupled with the advent of the Internet and open-source practices, make it possible today to develop a marketplace at low cost, whereas a few years ago this required hiring ten or so engineers.

Whether your project is a community platform of handmade products, exchange of services between professionals or even rental of goods, you can in a few minutes create and configure your marketplace, to attract your first offerers and trigger your first sales.

With the explosion of online marketplaces, the border between private and professional is becoming thinner. One can thus search for his new car on Craigslist while selling his old one at the same time on the same platform. In the same way, one can put his apartment for rent for the summer while looking for his next holiday destination on Airbnb.

It is, therefore, a paradigm shift, which, as always, opens the door to new and remarkable entrepreneurial stories.


Mohand Bencherif
About Mohand Bencherif

Co-founder & CTO at Kreezalid

Web developer and then e-commerce consultant, I started to work with marketplaces actors since 2013. I gladly share my experiments and the good practices that I discover.