To answer this question we need to understand the dynamics of a marketplace. Basically, there are 3 types of elements in a marketplace:
These 3 elements relate to each other in the following manner:
Let’s analyze Uber as an example. Supply is the drivers. Demand is the riders. The marketplace is Uber. Uber delivers new riders to drivers and delivers transportation services to riders through its supply of drivers. Riders pay Uber who then pay drivers and retain a fee.
Another example is Uber Eats, a 3-sided marketplace where supply is both the restaurants and the drivers who deliver the food to the user. Demand is the users who order food through Uber Eats, which is the marketplace. Uber Eats delivers demand to both restaurants and drivers and delivers a food ordering service to its users. Uber Eats charges the user and pays both restaurants and drivers, retaining a fee. In this case, Uber Eats connects 2 types of supply (restaurants and drivers) to one type of demand (users).
A 3rd example is Gympass, a 3-sided marketplace where supply is gyms and studios and demand are companies and their employees. Gympass delivers new users to its supply while delivering a network of gyms and studios that are offered by the companies as a corporate benefit to their employees. Companies and employees pay a fee to Gympass, which pays gyms and studios. In this case, Gympass connects one supply (gyms and studios) to two interconnected types of demands (companies and their employees).
So you run a marketplace and want to expand it. There are some different paths you can take to expand your marketplace:
The image below shows the 4 types of marketplace expansion.
So there you have it, 4 types of marketplace expansion. These 4 types are not excluding. You can explore all 4 options simultaneously, but remember that each can be a new business on its own, so be careful not to distract too many resources from your existing marketplace business.
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