Business Overview

More and more people are looking for gig-style work online, which is giving rise to a new type of website. Marketplace websites connect vendors and customers looking to conduct business together, and the websites collect a commission for doing so. One-quarter of Americans participated in this type of work in 2015, and that number is only trending upwards. Thus, there’s plenty of opportunity for new marketplace websites.

These websites may be service- or product-based. What differentiates marketplace websites from ecommerce sites isn’t what is being sold, but who is doing the selling. Whereas ecommerce sites sell directly to customers, marketplaces connect vendors, who are selling goods or services, with customers.

Who is this business right for?

Anyone who is passionate about a particular interest may enjoy running a marketplace website. These sites are frequently focused on specific niches, connecting vendors and customers interested in that niche.

What happens during a typical day at a marketplace website business?

Most of the work done at a marketplace website is online. On any given day, site owners may:

  • investigate and fix bugs in the site
  • monitor site activity and implement updates
  • respond to vendor and customer inquiries
  • review and adjust marketing campaigns
  • send vendors payments

In general, business owners need to make sure their site is running smoothly and all users know how to access the features they want. Any issues in the user experience may cause vendors or customers to leave the platform.

What is the target market?

The target market for a marketplace website consists of both vendors and customers who are interested in the site’s niche. Some vendors will sell only a little, while others will sell full-time.

How does a marketplace website business make money?

Marketplace websites primarily make money by earning a commission on each transaction that takes place on the site. Some sites also make money from subscriptions (for frequent users) or upselling extra perks (e.g. rush delivery).

What is the growth potential for a marketplace website business?

A marketplace website may be a small site that caters to a narrow niche, or it can grow to be a large platform. Kayakable (kayaks and canoes) and Trendlistr are two examples of smaller sites. Some larger, well-known platforms are Airbnb, Uber and Lyft. Amazon, EBay and Craigslist are some of the largest platforms.