Illustration Main Reasons of Peer-to-Peer Marketplaces Fail

Main Reasons of Peer-to-Peer Marketplaces Fail

Building a marketplace is a quite hard task. What you need to know to prevent peer-to-peer marketplaces fail? Let’s find out the main problems and find the ways to solve them.

Peer-to-peer marketplaces are extremely popular in our time. Because such business combines two worlds - versatility and convenience of online stores in addition to the idea that every consumer could be a provider.

This powerful combination already helps many business persons to create extremely successful marketplaces. An excellent example can be Airbnb, Etsy, Lyft. These marketplaces became the basis of inspiration for many projects.
Of course, despite the huge popularity of peer-to-peer marketplaces it is quite difficult to build it. In an effort to succeed, many developers have failed. Based on ten years of experience, I picked up the most common reasons for marketplace failures. Here are some of them.

Solving a problem in Peer-to-peer marketplaces

solving-a-problem

A fairly common mistake of most startups is that they do not solve the main problem of their projects. Therefore, even if many people liked your idea, this does not mean that it will be successful. Why?

If you are interested in this question, I recommend reading Adam Berk's article, related to the "sharing with neighbors" experience. Imagine, in the each person’s house there are many things that are not so often used (for example, cameras, equipment for sports or power tools).

Why not divide these goods between cohesive neighbors, thereby reducing the amount of waste. Great idea, isn’t it? In 2006, this startup brought a lot of hype, but in the end, this concept was not successful, since no one began to use it in reality.

Also read our article: Best way to calculate your marketplace business:is it cost to start?

People like the idea. We choose peer-to-peer marketplaces because we expect to get good quality services and products at a low price. And also do not forget about the convenience. However, on the other hand, such conditions do not always lead people to action.

Therefore, it is necessary to struggle with such a problem and find ways to solve it.

The problem is also in the details. For example: using the peer-to-peer marketplace, I need to:

  1. synchronize several times to receive and pick up a particular product,
  2. trust the goods to another person and hope that he will not break it.

Of course, when a thing is inexpensive, then this problem becomes less significant. But it's also important to remember that there is competition and there will always be something like Airbnb that will offer people a unique experience.

Of course, we should not assume that the idea of sharing marketplaces is initially doomed to failure. It is simply necessary to be able to solve this or that problem creatively.

Also read our article: Best way to calculate your marketplace business:is it cost to start?

For example, recently gained popularity Peerby. This marketplace stood out by giving people innovation. Namely, they proposed a slightly different idea. The company proposes to focus on borrowing, not on tools.

Thus, the service offers to receive the tool within half an hour. And it's much more convenient and faster than buying the tool yourself. Therefore, such an approach will be more successful among the users.

Therefore, when creating a successful project, do not forget to solve the real problem and make sure that people will use your idea.

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