Why Planit Is Free For Vendors
At Planit, we offer a platform for service providers in the events space (such as food vendors and makeup artists) to list their services. We do not act as middlemen in the transactions that happen when customers find and hire these vendors from our platform.
Typically, with businesses such as ours (where there’s no middleman), for revenue, the platform typically charges vendors some form of ‘digital rent’ to either sign up, get more visibility, or for more customers. However, our platform is free (and remains so) for vendors to sign up and list their services.
“So…at what point do you charge the vendors for the customers they get?” (At no point)
“You charge them a fee to register on the platform so they get customers, right?” (No)
“Don’t they cut you off once they get customers” (They do)
We get these monetization-related questions (and more!) a lot when we describe how we operate to a person (or pitch it). This is understandable as, after all, we are a business.
The many ways we can charge vendors
Many monetization options have worked well for a lot of similar products (i.e. platforms with no middleman).
Some of these include…
Charging them to rank higher
This is quite straightforward, since Planit isn’t being a part of the transaction, charging them to rank higher than the other vendors and give their business more visibility is a path to monetization.
This is a quite popular path to monetization and companies like Jiji, one of the largest classifieds service, have grown big with this.
We also tried this for 2 months in 2019 and then suspended it as it meant we’ll focus on promoting whoever pays, even over the best fit for the customer’s needs.
Charging them to register/stay on the platform
Usually in the form of subscription payments, charging vendors to use the platform (but keep all the cash they make) is another way to monetize
Charging per lead generated
For platforms that focus on generating leads (potential customers) for vendors, having the vendors/service providers pay for each lead is quite popular. This is usually implemented when it’s human-capital intensive for the business to be involved with every transaction (e.g. platforms in the event industry).
An example of a business with this model is Thumbtack (valued at $1.7 billion). In Nigeria, OgaVenue also uses this for its events vendors’ platform.
Why we aren’t using any of the monetization strategies above
A core reason for this is the focus on what the main product offering is. From all the monetization models listed above, the obvious focus of the business is generating leads for the vendors. So, it makes perfect sense for the companies to charge for the services they deliver — provide the supply side with (potential) customers, and they pay you in turn for it; good ol’ quid pro quo.
At Planit, our focus goes beyond being a platform for vendors to get customers. We also want to make their business processes easier by providing them with the tools to help them. So, while getting a customer is a crucial (and needed) part of the business, what happens after that? What parts of their business processes can be optimized so they’re able to not only get more customers but also, deliver their services efficiently?
From feedback we’ve collected from vendors, some common pain points include:
- Logistics
- Payments
- Leads generation
- (More) marketing
- Training to improve their work quality
- Financing
There are tons of issues that vendors face and this is barely scratching the surface. Our goal is to work with vendors to solve these issues.
Basically, what we’re saying is, “Hey, we’re here to make your operations easier, and oh, while at it, here are potential customers for free!”
We recently moved to Planit V2 and changes to the site’s aesthetic aside, the main focus was on migrating to a system where we have more flexibility to build out these tools as well as make third-party integrations (where needed), smooth.
We are continuously collecting feedback on issues that vendors face and are committed to using the feedback received to guide what is to be built (as well as to make optimizations).
How we’ll make money
In the long run, given that a huge focus of ours is making the lives of vendors easier with the tools we’ll be providing for them, we will also be gearing towards having these tools drive revenue for us in a usage-based pricing model.
We had built and started testing out MVPs (minimum viable products) of some monetization streams. A lot of these plans have been affected by the pandemic.
Examples of monetization channels that have been affected include commissions/fees from Planit Pro, our event planning concierge service where we work with vendors, and venue booking services, available through third-party integration.
In the meantime, fees from our Deals feature, where we offer discounted services from our vendors is aimed at productizing the vendors’ services, is also being considered (for Deals claimed on the platform).
Now, we fully realize that there is a huge chance that we have gotten this entirely wrong.
However, for us, there’s only one way to find out.
