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From our point of view, a SaaS enabled marketplace is a business which combines the characteristics of both models:

  • A marketplace component that connects two or more parties to conclude a transaction and thus can generate and benefit from real network effects.
  • A SaaS (Software as a Service) component that offers software features to one — or more — of the parties. This SaaS component needs to be usable as a standalone software. This is how we differentiate pure marketplaces (like Uber) from SEMs like StyleSeat.

This “methodology” has been popularly described as “Come for the tool, stay for the network.” by Chris Dixon and SEMs are in the perfect position to embrace such an approach.

SaaS enabled marketplaces can be B2B, B2C or C2C and the SaaS component can be offered to the demand or / and to the supply side whether it’s a business or a consumer.

These companies also combine the business models of marketplace and SaaS as they can monetize the transaction through a fee or the SaaS component through a subscription. Mathias modeled the different options

“A Marketplace Platform is a form of e-commerce that connects potential buyers and sellers all within one platform to help rent, buy, swap or negotiate.”

Traditional e-commerce platforms were not built to handle the multi-vendor model in which marketplaces carry. With multiple buyers and sellers, marketplaces make it seem-less to transact with one another. 

What are the different types of marketplaces?

E-Commerce: Transactions that are conducted online.

Why have marketplace platforms become so successful?

Here are a few simple answers:

  • Ease of shopping or booking from the comfort of your own home.
  • Safe and trusted environment for both buyers and sellers.
  • Eliminates the middleman, saving money for both parties.
  • Creates a frictionless experience for consumers.

 

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