😐 Online marketplaces primarily...
Today’s online marketplaces primarily make money by connecting buyers & sellers of goods and services. In return for helping originate and facilitate transactions, these marketplaces take a broker commission, often referred to as a “take rate”. This take rate typically ranges from 10% to 30% of a transaction’s value, helping maintain the financial viability of the marketplace.
However, excessive commissions can also increase costs for both sides of a transaction. For example, a seller may increase a listing price to solve for a net price post commission. Initially, vendors and service providers may not mind the commissions, as it brings them new customers. However, as reputation is established (i.e. reviews), high take rates may cause frustration.
🙂 User Owned (Web3) Marketplace
The vision for AutoMarketplace.com, is our users who help build and interact with the platform, own most of the business. In this vision, ownership is earned as part of a unique rewards program built using blockchain (‘crypto’) tokens.
Users will never pay for shares; they will earn shares in a similar manner to earning reward points. In addition, we also believe a single digit commission structure (5%) helps shops retain more of their income, allowing them to offer more competitive pricing. This in turn drives more transaction volumes, which increases the value of the marketplace, which is circularly owned by users.
For example, every time a user completes a transaction on AutoMarketplace.com, not only do they get the service or product they need, but they (& the vendor) earn an ownership stake in AutoMarketplace’s rewards program. It's a unique incentive structure meant to reward buyers and sellers of goods and services that help build and maintain AutoMarketplace. Effective costs for both sides of the transaction decline. Buyers & sellers are incentivized to use the marketplace they have a stake in.
Management would retain a voting majority, but minority equity position to help run the company (i.e., strategy, marketing, managing disputes). Digital tokens, created via blockchain technology, help facilitate this incentive structure.