Marketplace Model vs Inventory Based Model

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.