Marketplace glossary

An online marketplace is a website or app where multiple independent sellers or providers offer products or services to buyers in one place, and the platform owner facilitates and usually monetises the transactions.

Unlike a single-brand shop, a marketplace doesn’t own the inventory — it connects supply and demand and takes care of discovery, trust and often payments, typically earning a commission per transaction. Examples span every sector: Airbnb, Uber, Etsy, Upwork.

The marketplace business model is a way of doing business where a platform earns revenue by connecting independent buyers and sellers and taking a cut or fee on the activity it enables, rather than selling its own inventory.

Because the platform doesn’t hold stock, it can scale faster and with less capital — its main jobs are attracting both sides, matching them, and building enough trust for transactions to happen. Revenue commonly comes from commissions, listing fees, subscriptions or featured placements.

A two-sided marketplace is a platform that serves two distinct groups — typically buyers and sellers — who create value for each other, with the platform acting as the intermediary between them.

The two sides depend on each other, creating network effects — the platform becomes more valuable to each side as the other grows — but also the chicken-and-egg problem of attracting both sides at once. Multi-sided marketplaces extend this to three or more groups.

A services marketplace is an online platform that connects customers with independent providers of services — such as coaching, home services, tutoring or consulting — and earns a commission on each booking.

Because the "product" is someone’s time or skill, there’s no inventory, no stock and no shipping — the fastest and lowest-overhead type of marketplace to launch. Core needs are bookings, scheduling, payments, commissions and reviews.

A no-code marketplace is a marketplace built using a visual platform that requires no programming — you configure listings, payments, design and rules through an interface instead of writing software.

No-code platforms let non-technical founders launch in days rather than months, because core features are already built. The best also offer a visual editor for real design control, so "no-code" doesn’t mean "generic". Kreezalid is a no-code marketplace platform with 50+ ready-made templates and a visual theme editor.

A take rate (or commission) is the percentage of each transaction that a marketplace keeps as its revenue — for example, a 10% take rate means the platform earns £10 on a £100 booking.

Setting it is a balance: too high and sellers leave or transact off-platform (leakage); too low and the business struggles to be profitable. Platforms like Kreezalid let you set your take rate globally, per category or per vendor.

GMV is the total value of everything sold through a marketplace over a period, before the platform’s fees are deducted.

GMV measures the scale of activity flowing through the platform — not the platform’s own revenue. Revenue is roughly GMV × take rate. GMV should be read alongside take rate and unit economics, since high GMV at a tiny margin can still be unprofitable.

C2C, B2B and B2C describe who sells to whom on a marketplace: consumer-to-consumer, business-to-business, or business-to-consumer.

B2C marketplaces have businesses selling to consumers; B2B marketplaces connect businesses with other businesses; C2C marketplaces let individuals transact with each other. Many platforms blend models, shaping onboarding, trust requirements and payment flows.

The difference between a marketplace and an e-commerce store is ownership of supply: an e-commerce store sells its own inventory, while a marketplace lets many independent sellers sell through one platform that takes a commission.

An e-commerce store controls its products and margins but must hold stock. A marketplace scales supply without owning it, but must attract both sides and manage trust between them. Some businesses start as a shop and evolve into a marketplace.

An MVP (minimum viable product) marketplace is the simplest version of a marketplace you can launch to test whether real buyers and sellers will transact — before investing heavily.

The goal is learning, not perfection: focus on one category, one clear value exchange, and just enough features to enable a real transaction. No-code platforms are ideal for MVPs because you can go live in days and change direction cheaply.

Marketplace liquidity is the likelihood that a buyer will find what they want and a seller will find a buyer, quickly — the core sign of a healthy, useful marketplace.

High liquidity means listings sell and searches succeed; low liquidity means empty results on both sides. It’s often easier to achieve by starting narrow — one city, one category — then expanding.

Network effects occur when a marketplace becomes more valuable to each user as more people join — more sellers attract more buyers, and vice versa.

They are the flywheel behind successful marketplaces: growth compounds because each new participant improves the experience for the other side, creating defensibility that’s hard for competitors to displace.

The chicken-and-egg problem is the marketplace startup challenge of needing sellers to attract buyers and buyers to attract sellers — with neither wanting to join an empty platform.

Common solutions include seeding one side first, focusing on a narrow niche to reach density fast, or providing standalone value to one side until the other arrives. Solving it is usually the hardest part of launching.

In a marketplace, the supply side is the group providing products or services, and the demand side is the group consuming them.

Balancing the two is central to marketplace strategy: too much supply and sellers can’t find buyers; too much demand and buyers face shortages. Growth tactics and onboarding are often designed separately for each side.

Marketplace monetisation models are the ways a platform earns money — most commonly commission (take rate), subscriptions/memberships, listing fees, and featured placements.

Many marketplaces combine several: a commission on transactions plus paid promotion, or subscriptions plus listing fees. Transactional marketplaces lean on commission, while directories often rely on listings and memberships.

Split payments let a marketplace automatically divide a customer’s payment between the seller and the platform’s commission, while escrow holds funds until the transaction is completed.

Together these handle the money flow that makes a marketplace work: the buyer pays once, the platform keeps its cut, the seller is paid out automatically, and escrow releases funds only when confirmed.

A payment gateway is the service that securely processes card and online payments between a customer, the marketplace and its sellers.

For marketplaces, the gateway must support multi-party payments — taking the buyer’s money, splitting out commission, and paying multiple sellers — plus security and compliance. Platforms typically integrate an established provider.

A booking marketplace is a platform where customers reserve time-based services or slots — appointments, sessions or classes — with independent providers.

Its defining features are availability and scheduling: providers publish when they’re free, customers book a slot, and the platform handles payment and confirmation. Common in coaching, wellness, tutoring and professional services.

A rental marketplace is a platform where owners list items, equipment or spaces for others to rent for a defined period, and the platform earns a commission on each booking.

Unlike selling, the same item is rented repeatedly, so the platform must manage availability calendars, booking durations and often refundable deposits. Examples include equipment, vehicle, venue and fashion rental marketplaces.

A directory marketplace is a listings website that helps people discover businesses, professionals, places or offers, and monetises visibility rather than taking a cut of a sale.

Directory owners typically earn from paid or featured listings, memberships and lead generation. It’s a lighter model than a transactional marketplace because it doesn’t require a checkout — though bookings can be added later.

Take rate benchmarks are typical commission ranges by marketplace category, used to help owners set a competitive, sustainable rate.

Rates vary widely: high-value or high-frequency categories often support lower percentages, while specialised services can sustain higher ones. There’s no universal number — the right rate covers your costs and margin without pushing users off-platform.

Trust and safety refers to the features and policies that make users confident transacting with strangers on a marketplace.

Because buyers and sellers often don’t know each other, trust is what enables the first transaction. Common tools include identity verification, ratings and reviews, escrow payments and moderation. Weak trust is one of the most common reasons marketplaces fail to gain traction.

Ratings and reviews are user-generated feedback on sellers, providers, listings or buyers that helps build trust and guide choices on a marketplace.

They reduce the risk of transacting with strangers, reward good behaviour on both sides, and improve matching by surfacing quality — a core trust-and-safety mechanism and a driver of repeat use.

Disintermediation, or platform leakage, is when buyers and sellers who met on a marketplace take their transactions off-platform to avoid its fees.

It’s a direct threat to commission-based revenue, especially in high-value or repeat services. Marketplaces reduce leakage by keeping value on-platform — secure payments, protections, convenience, reviews — and by setting a take rate users perceive as fair.

Marketplace unit economics measure whether the value of a user exceeds the cost of acquiring them — chiefly LTV versus CAC.

Healthy marketplaces earn more from a user over time (LTV) than they spend to acquire them (CAC), with a comfortable ratio and payback period. Because marketplaces have two sides, unit economics are often analysed separately for buyers and sellers.

A multi-vendor marketplace is an online store where many independent sellers list and sell products under one platform, and the owner earns a commission on each sale.

The owner doesn’t hold stock — vendors manage their own listings and fulfilment — while the platform provides the storefront, cart, payments and commission logic. Amazon and Etsy are well-known examples.

A white-label marketplace is a marketplace built on a third-party platform but branded entirely as your own, with no visible sign of the underlying software.

White-labelling lets you launch quickly on proven infrastructure while presenting a fully owned brand — your domain, logo, design and experience. It’s the norm for no-code platforms with strong design control.

A listing marketplace simply connects buyers and sellers and lets them transact directly, while a managed marketplace takes a more active role — vetting, pricing, handling payments or quality control.

Listing (or "light") marketplaces scale cheaply but offer less control and trust; managed marketplaces offer a better, more consistent experience at higher operational cost. Many start light and add managed elements where trust matters most.

A vertical marketplace focuses on one specific category or niche, while a horizontal marketplace spans many categories.

Vertical marketplaces can tailor the experience, trust features and marketing tightly to one audience — often the smarter way to reach liquidity early. Most successful marketplaces start vertical and expand.

An aggregator gathers listings or information from many sources into one place, while a marketplace additionally enables and monetises the transaction between the two sides.

Aggregators help discovery but often send users elsewhere to transact; marketplaces keep the transaction — and its payment and commission — on-platform. Many directories start as aggregators and add transactions to become marketplaces.