Jan 10, 2020 09:51

Online marketplaces - the business model

By Ulrika Stroth Karlsson

The business model used in online marketplaces is called platform commerce, and is central to giants such as Amazon, Apple, Uber and Airbnb. These companies connect buyers and sellers at a global scale and are growing faster than we have ever seen businesses grow. The principal revenue model for a Marketplace is based on sales commission. When the sale takes place on the marketplace operator’s showcase, the operator takes a percentage commission on the transaction. 

As a platform operator, a retailer no longer has to worry about buying low and selling high. Rather, the platform operator takes a commission that is virtually pure profit. This is a win-win-win model:  Win for the customer who has found the product or service he or she wants at a competitive price; Win for the seller who has opened a new risk-free sales channel where technical infrastructure and marketing costs are entirely assumed by the operator; and a Win for the operator who is guaranteed customer loyalty by being able to offer more products, at more competitive prices, without running logistical or stock risks.

Avensia offers support in your marketplace endeavors, customized according to your needs.  We can help you with everything from strategy, new organizations and concepts to customer communication, solution architecture and implementation. 

Read more about our Strategic advisory offers for online marketplaces.

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