Marketplace Business Models for Management Consultants

Let’s start by looking at the essential concepts that we will need to better understand the marketplace business model. They will help us with more advanced issues.

A 2-sided market is trying to create a connection between the demand and supply enabling them to match and do the transaction. Let's look at the general idea.

Let's look at some examples of 2-sided markets

To understand the logic of a 2-sided market model, let’s have a look at the visualization of how it works

Let’s see what KPIs you should look at when it comes to marketplaces

You should test and find the optimal solutions for the following key topics in a 2-sided market. Let's see how it works

Let's check the basic version of Marketplace financial model

In this section, we will concentrate on modeling the Cash Flow in a simple way.

Imagine that you have to create a financial model that will forecast the cash flow of e-commerce selling cosmetics and related products.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

Imagine that you were asked to prepare a full model, including cash flow, for a regional fashion marketplace. Let’s see what we know about the firm.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

Creating a marketplace is one of the most difficult business challenges. We will discuss certain issues that will help you improve your attempts at building a marketplace.

Finding the idea is the easiest step. However, most of the ideas will fail due to bad execution or no real demand. Let’s see where you can find some inspiration.

"The minimum viable product is that version of a new product that allows a team to collect the maximum amount of validated learning about customers with the least effort" (Eric Ries). Let's see how it works in practice

Some of you may decide to go for the most difficult type of startup – a marketplace. Let’s have a look at what kind of MVPs you can use for marketplaces.

The chicken or the egg problem boils down to 2 things: sellers will not come to the marketplace if there are no buyers. Buyers will not come if there are no sellers. Let's see how this problem can be solved

Getting the first customers will be totally different than the regular sales. Here you have to get by all means possible the first paid customers and check whether the business model makes sense. Let's check how you can get the first customers

To scale the business you have to find scalable methods of getting new sellers and buyers that will provide the needed liquidity to the marketplace. First of all, a lot of money is still put into paid ads. This will enable you to acquire fast both buyers and sellers.

Funnel Analysis can be used to map and analyze a series of events that lead to a particular goal. In this section, we will discuss what is a funnel analysis and how you can use it to achieve better business results.

Funnel Analysis can be used to map and analyze a series of events that lead to a particular goal. In this section, we will discuss what a funnel analysis is and how you can use it to achieve better business results

Let’s start with a short definition. Funnel analysis is:

• It is a tool that can be used to map and analyze a series of events that lead to a particular goal

• The goal may be Sales, Gross Margin, number of customers acquired, number of projects done

• Funnel analysis can help you manage the process of achieving the goal and find ways to improve the situation

The Funnel Analysis consists of 5 main stages

• Define the goal

• Define the stages that lead you to achieve the goal

• Measure current performance & Find potential improvements

• Test & Analyze results

• Implement

There are many ways to present the funnel analysis. In this lecture, we will discuss the most often used methods.

Now let’s have a look at the general sales funnel for e-commerce. We will look at some examples of how you can approach it.

Let’s have a look at a sales funnel for a marketplace with multiple categories.

Without customer acquisition, you will not enjoy much growth. In e-commerce, you will spend a lot of time optimizing and finding more optimal ways to acquire customers. In this section, you will learn how to analyze and optimize customer acquisition.

Let’s start with a short definition

• Customer Acquisition is the process of bringing in new customers or convincing people to buy your products

• During customer acquisition, you bring the consumers down the marketing funnel from brand awareness to purchase decision

• The acquisition is done via different methods, and channels.

• Every channel will have its capacity, cost, and duration

• You can approach at different stages in the sales & marketing funnel

Here I will show you the general framework for decreasing the costs in retail

Let's see how we can lower the Cost of Acquiring Customers (CAC)

Let’s start with a short definition

• The Customer Lifetime Value (LTV) is a metric that tells you, how much money a customer generates for you throughout his entire time as a paying customer

• Usually, the longer a customer continues to purchase from a company, the greater their lifetime value becomes

Let's look at some examples of how we can increase the LTV.

Let's look at the general framework for increasing the LTV.

Let’s start with a short definition

• The Payback Time refers to the time it takes to recover the cost of acquiring the customer

• The Payback Time tells us how much time it takes for a customer to pay back his customer acquisition cost

• The value depends on how high the Customer Acquisition Costs (CAC) are and how much a customer contributes each month

• The Payback Time is the key metric for businesses that want to grow sustainably

Scaling is one of the most difficult stages in building firms, especially in marketplaces. You have to be faster than the first of firms to become number one in a specific market. In this section, we will loo at general frameworks used in scaling and how Amazon scaled its operations.

Let’s start with a short definition. By scaling we mean:

• The process of increasing significantly the profit, in a sustainable way

• Scaling should be done by design and not rely on luck

• For most cases, we will look at increasing EBITDA

• Scaling usually will require scaling not only sales but also other areas

There will be 3 areas that you have to scale to scale the profit: Operations, Sales & Margin, Recruitment, and Training.

What can stop you from scaling? There will be always something stopping you from scaling. In other words, one of the areas will be a bottleneck

Let’s have a look at how a beer producer can scale the business and eliminate the obstacles, and limits that may appear during this process.

In this lecture, we will discuss the solution to the case study.

In this section, I will show you what process you can use to scale your business more efficiently.

Let’s see how Amazon has scaled Sales & Margin.

Let’s have a look at the scaling operations framework

• Improve the efficiency of existing assets

• Add assets

• Change technology

• Add partners

• Add products that require less assets

Let’s see how Amazon has scaled its operations

Let’s have a look at the general framework for Scaling Recruitment & Training

Let’s look at how Amazon has scaled recruitment and training.

We will have a look at how much and in what was Amazon investing.

In this lecture, we will discuss how Amazon has been building add-on businesses using its main business as the cornerstone

Amazon was successful in building many new businesses on top of the e-commerce and marketplace it operates. We will discuss here AWS and Amazon Prime.

Amazon was successful in building many new businesses on top of the e-commerce and marketplace it operates. We will discuss here AWS and Amazon Prime.