Turning your business ecosystem into a service-based marketplace is a good idea for a few reasons. Notably, service-based marketplaces give your customers access to services they need, in a way that improves the overall customer experience. When your customers have access to the right services alongside your own product or service, they see better results. Customers who see results are happy customers. And happy customers, of course, are very good for business.
Marketplace ecosystems also champion community-led growth and can supercharge your partner network if you have one. The healthier your partners and resellers are, the better they’re able to support you and your customers with onboarding, specialist expertise, customer support, and complimentary services.
Monetizing your service-based marketplace creates an additional revenue channel for your business.
There’s also another very good reason to build a service-based marketplace: It can be used as an additional revenue channel. Here are four ways to monetize your service-based marketplace:
1. Charge a commission on all transactions.
As Pawel Chudzinski points out, marketplace infrastructures that allow payments to take place directly on the platform are ideally set up for commission structures. Commission structures work by taking a percentage of each transaction that takes place in your marketplace. This is often more attractive to third-party sellers than subscription-based monetization models – especially if your marketplace is fairly new – as there’s no risk of having to pay a monthly fee when no sales have been made. Commission can be charged to the seller or the buyer, or split between both.
2. Charge sellers a fee per listing.
Another way to monetize your service-based marketplace is to charge sellers a fee per service bundle listing. Many marketplaces charge both a commission and listing fee, however, your marketplace will have to be well established in order for sellers to justify the ‘double spend’ of listings plus commission.
3. Make listings free, but charge for ‘premium’ listings.
Another option is to offer free general listings, but to charge sellers for ‘premium’ listings. Premium listings are more visible to customers (for example, premium listings are usually always displayed at the top of listings pages and are larger) and sometimes include more information (for example, a premium listing might be able to display video content while free listings cannot).
4. Charge users a monthly subscription fee.
Subscription fees differ from listing fees as instead of paying per listing, users pay a set monthly subscription fee in order to use the marketplace platform. Subscription fees can be tiered, offering different level users different permissions and powers. As mentioned earlier, a subscription-based fee structure can discourage early adopters of a new marketplace without a proven track record. However, if sellers typically post multiple listings, a subscription-based model can be more attractive in a more mature marketplace.
Which strategy is best suited for your particular marketplace will depend on the type of services being sold and the average cost of those services. How the marketplaces you’re competing with are set up for monetization should also influence which strategy you choose to adopt.
Morphed’s white-labeled eCommerce marketplace infrastructure allows your partners or third-party service providers to sell services the way modern customers want to buy services. Customers are able to browse ready-to-go service bundles and comprehensive listings that make self-service a cinch. Even better, the entire customer relationship can be managed through a dedicated Customer Portal; a centralized place where proposals can be requested, briefs submitted, milestones set, payments made, and work rated and reviewed.
