Table of Contents
- 1 What are the most important KPIs to monitor on marketplaces?
- 2 How do you value a marketplace company?
- 3 How do you measure trust in the marketplace?
- 4 What is the goal of a marketplace?
- 5 How do two-sided marketplaces increase profits?
- 6 What is the difference between platform-as-a-service and two-sided marketplace companies?
What are the most important KPIs to monitor on marketplaces?
The three important KPIs are gross merchandise value, customer acquisition cost, and customer lifetime value. Tracking the customer conversion funnel helps you understand where the biggest bottlenecks that prevent transactions from happening are.
How do you measure marketplace success?
It all depends on your gross margin. Your marketplace Gross Margin is calculated by subtracting the cost of products or services sold from your net revenue. To get a more accurate number, you can subtract other costs (like marketing, payment, and customer service costs) from your net revenue.
How do you value a marketplace company?
The rule involves adding together a business’s revenue growth (expressed as a percentage) plus its EBITDA margin. If the answer is greater than 40, the business is efficient. Much lower than 40, and the business is inefficient. If your revenue is growing 30\% a year and your EBITDA margin is 10\%, you pass.
How would you set a goal for Facebook marketplace?
Goals for Facebook Marketplace Framework:
- Clarify product.
- Callout FB mission / Create mission for tool.
- Identify users.
- Identify user needs.
- Identify metrics to track the fulfillment of those needs.
- Select one metric and identify tradeoffs with mitigation plan.
- Identify ways to improve on that metric.
How do you measure trust in the marketplace?
Trust opinion values can be calculated based on the community members’ feedback about the solutions and services published in the marketplace. It is also possible to measure the trust opinion values about the members themselves based on their activity and participation within the community.
How do you measure growth metrics?
The growth metrics you definitely want to analyze include:
- Revenue Generation. This is the most basic growth metric, but worth keeping an eye on.
- Cost Per Lead.
- Cost Per Customer (CPC) Acquisition.
- Average Revenue Per User (ARPU)
- Retention.
- Upsells.
- Annual Recurring Revenue (ARR)
- Conversion Rates.
What is the goal of a marketplace?
The goal of any online marketplace is to connect merchants and customers within a niche to sell or rent goods or services, so think about how that actually begins to look within your online marketplace and how you want to bring that to life.
What is a two-sided marketplace?
Like a freemium model, a two-sided marketplace works well when its design allows it to add increasing numbers of users in order to create a network effect—that is, the effect created when a product (like telephones) or a service (like a social network) becomes more valuable as more and more people use it.
How do two-sided marketplaces increase profits?
In standard industrial-era businesses, greater scale leads to diminishing returns. You get the opposite effect in Two-Sided Marketplaces: greater scale makes it easier to get and keep customers, and thus profits increase as the network grows.
What are the best books on two-sided markets?
Strategies for Two-Sided Markets, by Thomas R. Eisenmann, Geoffrey Parker, and Marshall W. Van Alstyne, Harvard Business Review, 2006. (limited access) All Marketplaces Are Not Created Equal, 10 Factors to Consider When Evaluating Marketplaces, by Bill Gurley, Above the Crowd, 2012.
What is the difference between platform-as-a-service and two-sided marketplace companies?
This should therefore help clarify the difference between a Platform-as-a-Service company. Platform-as-a-Service provisions a technical platform for software creation, whereas a two-sided marketplace companies broker a relationship between two entities, often taking a cut of the transaction revenue.