What Is a Marketplace Business Model?

The marketplace business model is becoming increasingly popular among startups.

A marketplace business connects buyers and sellers through a platform.

The platform facilitates the transaction and does not produce or provide the product or service.

The platform often handles the payment, facilitates the logistics, and more.

Examples of companies using the marketplace model include Uber and Amazon Business.

Marketplaces can be business-to-consumer or business-to-business models.

Uber is primarily a business-to-consumer model in that it facilitates rides for end users.

Amazon Business is an example of a business-to-business marketplace that lets a business sell its services to another business.

There are also consumer-to-consumer marketplaces such as eBay when it began in which consumers would sell their garage sale items to other consumers.

There are vertical and horizontal marketplaces.

Vertical marketplaces focus on a single category or market.

Horizontal marketplaces sell across segments.

Marketplaces use different monetization models including listing fees, transaction fees, or subscriptions.

 

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