5 Types of Marketplace Business Models That Work In 2021

Starting an online Marketplace Business is an emerging market trend in which every booming entrepreneur wants to get indulged in. But to build a sustainable and successful marketplace business platform, we need to find a perfect revenue model suitable for our business startup.

Many business owners have worked on different marketplace ideas, but still, they failed to figure out the perfect way to implement their Online Marketplace Business Model.

Building a marketplace without any revenue model is not the way of launching any successful business. In this article, we will dive deep into the Marketplace Business world and cover 5 Marketplace Business Models that will make your marketplace profitable in 2021

What is the Marketplace Business Model?

Marketplace Business Model is the backbone of an online marketplace platform. This business model will define the way to generate revenue in your online marketplace business.

You must have heard about all the big startup companies like Amazon, eBay, Walmart, Upwork, Airbnb, etc. All of these companies work on the online e-commerce business model concept.

They all have managed to become a multi-dollar company by connecting the third party customers and sellers. These marketplace businesses do not provide any products or services of their own, they just provide a platform where the buyers and sellers interact with each other.

How does the Marketplace Model work?

An online marketplace is a website or an app where the different suppliers can sell their products or services to buyers. And all the transactions of buyers are processed by a marketplace business operator which is delivered by the supplier.

Types of Online Marketplaces based on Business Models

A Marketplace Business Model is very different from any other business models, here you don’t need to provide services to clients, the main job is to connect to people who provide services to those that are ready to buy the product or services.

Let’s have a detailed look into the three main types of marketplaces based on the business models.

(1) B2B (business-to-business)

B2B is a type of marketplace where businesses sell to other businesses on beneficial terms. This marketplace is operated by a third party, which allows wholesalers and manufacturers to buy and sell on their online marketplace platform.

Using an online B2B marketplace is as easy as using any online shopping platform, it provides you a single, easy-to-use portal to sell your products or buy any products you need.

(2) B2C (business-to-customer)

B2C is a type of marketplace where businesses do not sell their products and services to other businesses, but directly sell it to the customers. It provides a platform where business entrepreneurs and their customers interact with each other.

B2C is one of the most popular marketplace models today, the advantage of this platform is that you’ll find a wide variety of products at a single destination.

This model has a global reach for the end-users, even small business owners can sell their products to the customers to another side of the world.

(3) C2C (customer-to-customer)

C2C is a type of marketplace where customers can trade with each other in an online environment. Here the customer purchases goods from another customer using a third-party business platform.

C2C marketplace believes that all participants are equal, that’s why it is also called peer-to-peer or person-to-person.

Top 5 Marketplace Business Models in 2021.

There are millions of businesses that are live on the internet nowadays, e-commerce has made it just a piece of cake to buy anything online with just a simple click. There are various e-commerce models available, but the one which rules the industry is the online marketplaces which are increasing day by day.

But to make money with Developing a Marketplace Business Model you should be very much sure about the most demanded one. For starting a marketplace business, it is important to select the right business model for your monetization strategy, which will provide a profitable revenue stream.

Let’s have a look at some of the top Marketplace business models.

1. Commission Model

The commission-based marketplace model is the most common currently used model for an online marketplace. Here, the commission is charged on each successful transaction.

When a customer pays a supplier, the marketplace platform charges a minimal percentage or a fixed fee for the services provided to you.

Charging the commission is the most lucrative revenue model for any marketplace business because as the business grows the more amount of transactions will happen, and more transactions will overall lead to an increase in the revenue.

2. Subscription Model

Subscription rules the world in every aspect, from a digital product to a regular sale, there will be no doubt to say that subscription is the ultimate marketplace business model.

The subscription marketplace model is widely used by many companies these days, as every user has started following the modern approach according to the trend.

This model charges a subscription fee to access the platform. The customer has to pay a fixed amount of money on fixed time intervals to get access to the product or service provided by the company.

3. Listing Fee Model

In the Listing Fee Model, the sellers pay a fee for listing their products or services on the platform.

This is another popular revenue generation model in which a seller has to pay a decided amount to the platform. This is used when the sellers get value based on the number of listings they have on the website.

4. Freemium Model

In the Freemium Model, the companies offer a product for free of cost to the buyers and sellers, they only charge for additional features, premium subscription, and some extra upgrades.

The logic behind the Freemium Model is to allow users to test the services for free and get them hooked to the platform which doesn’t leave them without buying the premium services.

5. Featured Ads and Listings Model

In this model, the seller opts to pay an additional fee to enhance the visibility

of their listings to be displayed before others.

This model provides more visibility for the offerings you provide and get your ads to feature on the homepage of the site.

Conclusion

The success of any marketplace depends on the model you choose for your platform.

You can understand your niche and focus on how you can monetize your model using the right revenue generation technique.

If you’re thinking of starting your own online marketplace business, then it’s the right time to put your step forward and start your marketplace platform. Study the above-mentioned points and use them according to your requirements.