Marketplace Model vs Inventory Based Model

market

After a totally disastrous vacation, felt great returning to Mumbai. Sitting on my favorite wooden table, sweating off malarial fever, I’d a small discussion with a client. I thought it needed a note.

What should we build – an online market place for rented assets in a particular category or a platform to aggregate inventory and offer to customers?

Shallow analysis calls eComm portals as market models but I say it’s a closed integrated system customer is falling for. When buying –

  1. Customer needs price, product, substitute comparisons
  2. Transaction assurances – counter party guarantees, delivery time, returns, refunds etc

And the heart of buying is 2nd point- hence world got over eBay.

So, before a loose call to go for ‘asset light market model’ is taken, it’s important to understand what is at the heart of the┬áproblem you are solving. Most often it requires building integrated closed loop system to deliver that value – not just provide handshake with counter party. That time is gone.

Author: Kaushal Trivedi

Pre-MBA -Programmer/Systems Analyst. Post MBA Equity Research, Infrastructure Advisory, Credit Risk Modeling etc. Then Options Trader. Developing Quant Trading Models. Developed Automated Trading Systems. Then Product Business. Then Product Design. Still subtracting the obvious, still adding the meaningful.

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