How to expand a marketplace?

  • Supply: goods or services available for consumption
  • Demand: people or businesses that may need goods or services offered by the supply
  • Marketplace: where demand finds supply and a transaction happens
  • Value delivery: marketplace delivers value to both demand and supply. The value delivered to supply is people or businesses interested in its goods or services. The value delivered to demand is a varied number of goods and services suppliers.
  • Payment: in order to have access to the goods and services offered by the suppliers, the demand pays the marketplace and marketplace pays the supply. Normally the marketplace retains a fee per transaction. This fee can be fixed or a percentage of the payment.

Expanding the marketplace

  • Demand diversification: you can offer the goods and services of your marketplace to new segments and geographies. Uber did that in its international expansion. Uber also offered its transportation services to companies, besides its regular offer to end-users.
  • Supply diversification: you can offer new goods and services to your demand. Uber did this with Uber Eats. Amazon started out offering only books. Now it offers almost anything.
  • New value delivery: you can offer new value to both your supply and your demand. Uber offers many services to its drivers like car rental, car maintenance, phone plans, and health insurance. iFood, a Brazilian company similar to Uber Eats, offers a PoS system to its affiliated restaurants. MercadoLibre, an Argentinean marketplace similar to eBay, offers to its sellers MercadoShops, an eCommerce site builder and becommerce, a back-office management solution.
  • Payment financial management: since the payment from demand to supply goes through the marketplace, you can offer financial services to both your demand and your supply like advance payment and credit, and you can manage the spread. iFood is offering through its app the ability for its users to pay the bill when they are in the restaurant. Uber partnered with Intuit to offer financial management services to its drivers. Both MercadoLibre and eBay offer a payment solution for its sellers and buyers. MercadoLibre offers MercadoPago and eBay acquired Paypal. Most recently MercadoLibre decided to offer loans to its sellers in Brazil and Mexico.

Digital Product Management Book

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Digital product development advisor, coach, and board member. Also an open water swimmer and ukulelist.

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Joca Torres

Joca Torres

Digital product development advisor, coach, and board member. Also an open water swimmer and ukulelist.

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