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When starting an online market place, do you think you need to make it completely free to get some momentum?

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David Crow

I <3 emerging technology & new buying behaviours

You can read about Zaarly, which was a 2-sided reverse Craigslist, and their struggles with pricing and the ultimate impact it had on their decision to change to a storefront only tool.

* http://techcrunch.com/2013/03/09/zaarly-shutters-its-reverse-craigslist-marketplace-goes-all-in-on-virtual-storefronts-as-co-founder-exits/

A better read is "If You Think 10% Is A Good Transaction Fee For Your Marketplace, Then It Will Struggle" by Sunil Rajaraman

* http://techcrunch.com/2013/03/16/marketplaces-businesses-are-tough-to-build/

"it would be to start your transaction fees higher than 10 percent. I understand that companies start here to deter competition and provide a better deal for suppliers. But imagine having to build a business that completes $1 billion in annual transactions within five years in order to build a $100 million top-line business. Start much higher than 10 percent. You can move down eventually, but you cannot move up"

And Bill Gurley's "All Markets are not created equal - 10 factors to consider when evaluating marketplaces"

* http://abovethecrowd.com/2012/11/13/all-markets-are-not-created-equal-10-factors-to-consider-when-evaluating-digital-marketplaces/

Pricing is key to proving your revenue model.

Answered over 11 years ago