Metrics for Marketplaces

In running a marketplace business there are several metrics for measuring the performance of the market and platform.

Here are some key metrics to consider:

Gross Volume — this is the total amount of goods and services transacted on the platform.

Activity — the number of times a buyer engages the platform yielding the number of daily and monthly active users.

Average transaction value — the average value of the transaction indicates the size of the market. 

The concentration of buyers and sellers — this measures the percent of business that comes from the top five, ten, or twenty buyers or suppliers on the platform highlighting over-concentration.

Cost of acquisition of suppliers and buyers — this calculates the cost of placing inventory on the platform and acquiring buyers.

The lifetime value of the buyer — this estimates the value of the purchases over the lifetime of the buyer on the platform.

Multitenating — this calculates the number of sellers and buyers who are also on other platforms.

Switching costs — this calculates the cost of the buyer or seller to move to another platform.

Take rate — the percent of the sale that is taken for the transaction.

Measure these key marketplace metrics to better understand your marketplace business. 

 

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