Having existed for several years, the creation of marketplace-type platforms continues to enjoy constant and sustained success. However, the realization of such a project necessarily requires solid expertise in the relevant market as well as specific technical skills. In reality, new trends and consumer habits require marketplace designers to adapt agilely to effectively respond to the evolving and diversified demands of the market.
1. Registration fees
The listing fee is simple: it’s a flat-rate payment collected from your sellers when they request to sell through your marketplace. You don’t need complex payment gateways, and your sellers pay you upfront. It’s also possible to defer the payment of the listing fee. For example, ClickBank charges you an “activation fee of around $49 only after your first product is approved.”
Here are some tips for making this business model work, especially in the beginning:
- Make sure listing fees are affordable for your sellers
- Emphasize the benefits your sellers will get from listing!
- Offer a personal approach to sellers who register.
Benefits of registration fees
- achievable from the first stages
- a simple implementation
Disadvantages of registration fees
- Does not scale well over the long term
- You will have to be convincing
2. Subscription
Over the past decade, businesses have actively shifted from selling products and services to offering subscription-based offerings. Why? Because recurring revenue is the lifeline of any business, including marketplaces. Some even consider subscriptions to be “THE” marketplace business model.
First, because subscriptions allow you to split a large payment into several smaller, affordable payments. Second, recurring payments are a great way to help fund and scale your business over the long term. By taking out a subscription, you can maintain and improve your product for as long as your users deem it worth paying for.
The most important rule of subscriptions is simple: as long as your users derive more value from your services than the cost of remaining a subscriber, they’ll continue to pay. The same goes for marketplaces: your sellers won’t hesitate to pay €10 per month if it brings them 10 times more.
If you’re considering a subscription business model, here are some tips:
- Offer a free trial if technically possible
- Describe exactly what is included and how you will receive payments
- Try to offer a few different plans with different options and a way to switch between them seamlessly
- Have a plan to keep your sellers engaged
offer incentives for larger one-time payments (e.g., a 15% discount for an annual or monthly plan)
Benefits of Subscription Payments
- Excellent long-term revenue model
- In many cases, more affordable than one-time payments
Disadvantages of subscription payments
- more complex to implement than one-off payments
- difficult to implement in specific sectors
3. Listing Fees
Product listing fees are one of the most common business models among marketplaces. These fees are collected from sellers when they list their products for sale.
Several methodologies exist to calculate these fees:
- flat rate, for example, 0.35 euros per product sheet
- amount based on price, for eexample,le 5% of the product’s listing price
- calculation of fees based on the category, for example,, 25 euros to register a product in the “Automobile” category
- calculation based on characteristics, for e, +5 euros for each additional product category
These fees can be charged at once for each individual product or combined into a single invoice covering multiple products.
Here are some tips to consider when implementing this businessMakeel:
- Make it easier for sellers to pay fees, especially if you want to encourage them to list many products
- Provide sellers with a compelling argument to justify the value of listing on your platform, for example, through statistics..
- If you use price-based calculations and work with expensive products, consider fee caps
Listing fees will be very useful for handmade marketplaces where sellers sell unique products, but they may not work as well in traditional online shopping malls. This business model is also popular among classifieds platforms, which don’t process transactions and therefore can’t collect seller fees.
The benefits of publication fees are simple
- A simple and clear approach for sellers
- will work great for unique and craft markets, as well as classified ad platforms
Disadvantages of publication fees
- Will not work optimally at first
- Not suitable for all industries
- no products = no revenue
4. Sales fees
When you run a marketplace with seller fees, you have a revenue stream that brings you a small share of each sale, usually before payment reaches the seller. Fixed seller fees and percentage-based fees (or a combination of both) are common.
Exactly how you collect sales commissions from your marketplace sellers will depend on the payment flow you use.
There are three common payment flows in an online marketplace:
- Direct payments, where the customer’s payment goes directly to the seller’s account. You will collect the sales fee in the form of a reverse payment by invoicing your seller either automatically at the time of the sale or at regular intervals, such as monthly.
- Batch payments, where your platform collects payments from your customers and then distributes them to sellers as payments
- Split or parallel payments, where the payment provider splits the amount between your sellers and your platform at checkout.
There are different fee rates you can apply when building your revenue model:
- fees applicable to the entire marketplace, for example,$0.35 + 3% on each sale
- different rates depending on plans or performance, for example,, 5% for electricity sellers, 3% for all others
- indiindividuales for individual sellers – consider if you are running a smaller niche market
- different sales prices for different product categories or even for individual products
When considering whether or not to implement seller fees on your marketplace, keep the following in mind:
- Selling costs vary depending on your sales growth, but are not high at the beginning of the project
- Low selling prices may be attractive to your sellers, but may not be viable for you.
When applying a selling fee, remember to factor in your processing fees.
Advantages of sales charges
- They are very interesting in the case of a change of scale
- They will work well in large online malls where quantity is more important than quality
Disadvantages of sales charges
- They are more difficult to implement compared to other marketplace business models
- They won’t work well at first when your platform doesn’t have many sales yet.
5. Sponsored Products
Promoting products and profiles is a great way to give your sellers additional exposure after setting up your marketplace. These promotions can take various forms, for example:
- sponsored products on other pages, categories, in the cart o,, or at checkout
- to be presented on supplier profiles or the main page
- promotion on blog posts and mentions in the newsletter
Sponsored Products generally work best on product-focused marketplaces (like eBay or Amazon, where the product is more important than the seller), while Featured Seller Profiles are a great way to drive customer interest on seller-focused marketplaces (where sellers sell unique or handmade products).
When it comes to collecting payments for promotions, you can choose a few different approaches:
- Charge sellers for product and individual profile promotions.
- Include product promotions in a more expensive membership plan
- Set up a credit system allowing sellers to purchase credits in bulk and use them for promotions
- Offer free promotions as part of a broader marketing campaign to attract new customers
If you decide to include paid ads and promotions in your marketplace business model, here are some tips:
- Consider the shopping experience of your customers who may be wary of sponsored products – will you promote everything or implement some sort of validation?
- Don’t forget the technical part of implementing sponsored listings – can your current system handle them out of the box, or will you need to have it developed first?
- Don’t overdo sponsored listings to the point where your marketplace becomes unusable for the organic shopping feed.
Benefits of Sponsored Listings and Promotions
Disadvantages of sponsored listings and promotions
- Allowing promotions of low-quality products can harm your customers’ experience
- Implementing feature lists may require custom development if your system does not support it
- You will need to convince your sellers that it is worth it for them.
6. Third-Party Ads (Advertisements)
This business model is a little different from the sponsored products seller’s business model. Here, you allow third-party advertisers to promote their products, services, or websites. Generally, the approach to ads is similar to the previous case: you have a certain number of ad placements and charge advertisers to publish their ads.
There are several ways to set up ads on your online marketplace:
- Using internal adware
- The use of third-party services, such as AdSense
- manage ads manually
Depending on your needs and the capabilities of your platform, you will use one or more of the following advertising models to collect payments from your advertisers:
- CPI/CPM (cost per impression)
- PPC/CPC (pay-per-click/cost-per-click)
- cost per period, for example,120 euros per day or week for the home page ad
- cost per post, for example,, 0 euros per blog post
Here are some of the different types of ads and placements you can consider:
- display advertising, such as graphics and banners
- text advertising, for examexample blog posts or newsletter mentions
- mixed advertising, such as sponsored third-party product listings
Benefits of Ads
- If implemented correctly, relevant native advertising can add value to your marketplace members.
- Monetization through advertising is scaled as long as you can reach the relevant advertisers in your industry
