How would you balance these advantages for both sides of the marketplace? I would expect the balancing act of providing a clear advantage to one side (e.g. exclusive supply for buyers) doesn't always translate to an advantage for the other (what do we provide to sellers to get them to offer exclusive supply?).
Do you have two parallel strategies/advantages running for either side of the marketplace?
Hey Alex, thanks for weighing in and the great question. As a general rule, the demand side is often the harder side of the market. Often, suppliers are engaging in the market to make money and, if you can provide demand (i.e., you can help suppliers make money), then they will be incentivized to engage in your marketplace. That said, each of the 5 principles has an analog for suppliers that can help founders understand how to optimize their marketplace to attract the best suppliers:
1. Highest Earnings (vs. Best Price on the demand side) - Suppliers will engage in your marketplace when they can achieve earnings better than or at least as good as other marketplaces.
2. Exclusive Supply (vs. Exclusive Supply on the demand side) - Suppliers will engage with your marketplace when they can reach buyers that aren't available elsewhere (for example, the Amazon Prime member).
3. Discoverability Advantage - Suppliers will engage when they are more discoverable in your marketplace or network. This is huge advantage for early marketplaces because they provide relatively green field discovery advantages for suppliers.
4. Trust Advantage - Suppliers will engage when they feel safer transacting on your marketplace. For example, Upwork does a nice job of ensuring that suppliers will get paid reliably and fairly.
5. Fulfillment Advantage - Suppliers will engage when your marketplace helps them fulfill their product or service better (for example, Fulfillment by Amazon is a major advantage).
Interesting read Ravi, thank you for sharing.
How would you balance these advantages for both sides of the marketplace? I would expect the balancing act of providing a clear advantage to one side (e.g. exclusive supply for buyers) doesn't always translate to an advantage for the other (what do we provide to sellers to get them to offer exclusive supply?).
Do you have two parallel strategies/advantages running for either side of the marketplace?
Hey Alex, thanks for weighing in and the great question. As a general rule, the demand side is often the harder side of the market. Often, suppliers are engaging in the market to make money and, if you can provide demand (i.e., you can help suppliers make money), then they will be incentivized to engage in your marketplace. That said, each of the 5 principles has an analog for suppliers that can help founders understand how to optimize their marketplace to attract the best suppliers:
1. Highest Earnings (vs. Best Price on the demand side) - Suppliers will engage in your marketplace when they can achieve earnings better than or at least as good as other marketplaces.
2. Exclusive Supply (vs. Exclusive Supply on the demand side) - Suppliers will engage with your marketplace when they can reach buyers that aren't available elsewhere (for example, the Amazon Prime member).
3. Discoverability Advantage - Suppliers will engage when they are more discoverable in your marketplace or network. This is huge advantage for early marketplaces because they provide relatively green field discovery advantages for suppliers.
4. Trust Advantage - Suppliers will engage when they feel safer transacting on your marketplace. For example, Upwork does a nice job of ensuring that suppliers will get paid reliably and fairly.
5. Fulfillment Advantage - Suppliers will engage when your marketplace helps them fulfill their product or service better (for example, Fulfillment by Amazon is a major advantage).
Amazing, thank you for your thoughtful response!