8 Best Practices for a Peer to Peer Marketplace

Copyright Near Me Marketplaces 2014

THE 8 BEST PRACTICES FOR A PEER-TO-PEER MARKETPLACE Everything you need to be successful with your marketplace By The Near-Me.com Team

The 8 Best Practices For A Peer-To-Peer Marketplace near-me.com Page 2 of 33 Copyright Near Me Marketplaces 2014

WHAT IS A PEER-TO-PEER MARKETPLACE? Put simply, a marketplace facilitates the exchange of goods and services. A peer-to-peer (P2P) marketplace is where individuals transact with other individuals, typically maintained by a third party such as a business, government or member-based organization, operating through technology. In this type of marketplace, peers can act as both providers and participants, offering goods and services as well as utilizing them. “The supplier can also be part of the demand side.” Traditional ‘eCommerce’ is a One-to-Many exchange of goods or services. A peer-to-peer marketplace is a Many-to-Many exchange of goods or services, where the value exchange might be monetary, points, crypto-currency, feel-good-factor or any other agreed to means of value exchange. Peer-to-peer marketplaces are quickly gaining momentum - helping people utilize time, space, and resources that would otherwise remain idle, creating trustworthy social connections along the way. Traditional brands are also powering P2P marketplaces to close the loop in their products or service life-cycle i.e.: creating a certified second-hand marketplace for their products to be re-sold or linking channel partners or experts and customers together for service match-making. Time Magazine dubbed collaborative consumption, (also known as the sharing economy, social commerce, circular commerce and collaborative commerce), as one of the Top 10 Ideas that Will Change the World. By the numbers, peer-to-peer marketplaces are already big business - Forbes estimates that the sharing economy has produced 3.5 billion in economic value in 2013 alone, with future projections of up to 110 billion in the next few years according to MIT Sloan.


The first Peer-to-Peer platforms to leverage the connecting power of the internet were file and music sharing services like Kazaa and LimeWire. Trustworthiness and legal scrutiny of these services were polarizing for traditional industry distribution models. However Peer-to-Peer has moved mainstream and an entire generation of participants now see P2P as the “new normal” way of accessing, offering and utilizing goods and services. There is no limit to the types of markets that will be disrupted and the trend is global in its acceptance. Examples of peer-to-peer marketplaces include:

Airbnb (location rental) Etsy (goods buy/sell) TaskRabbit (service) GetAround (location-based)

About this white paper Since peer-to-peer marketplaces are very different from traditional ecommerce - this 8-step guide will help you understand how to build and develop your marketplace from the ground up. Near Me consults clients on these very practices every day, so we’re sharing everything we know about building a peer-to-peer marketplace (well, almost everything).

STEP ONE: NARROW THE FOCUS STEP TWO: BUILD UP THE SUPPLY STEP THREE: CREATE A COMMUNITY STEP FOUR: PRODUCE COMPELLING CONTENT

STEP FIVE:ACQUIRE NEW USERS CREATIVELY STEP SIX: CREATE TRUST & REPUTATION LOOPS STEP SEVEN: MAKE TRANSACTING CONVENIENT STEP EIGHT: ADD VALUE BEYOND THE TRANSACTION

Let’s get started!


NARROW THE FOCUS OF YOUR MARKETPLACE Before you run off to the races, consider narrowing the focus of your business so that your marketplace appeals to a specific group of people. You can narrow the focus by choosing targeted vertical, niche community, or a single geography to start. If your focus is too broad or you’re attempting to hit many markets at once, you will likely suffer from a lack of suppliers and fail to create the community that is vital to creating a thriving marketplace. Craigslist, eBay and other broad-based ‘non-affiliated’ marketplaces are examples of

broad appeal, ‘a mile-wide’ with choice but an inch deep in focus.

STEP ONE:NARROW THE FOCUS


A narrow focused marketplace that caters to the needs of a specific community of participants is able to build greater trust and credibility.

GIVE PEOPLE WHAT THEY WANT Focus on giving people what they already need and are looking for. Most marketplaces can trace their roots back to informal products and services already happening on Craigslist, so that’s a good litmus test. Are people currently exchanging the types of goods or services you plan to create a marketplace for? For an un-tested marketplace idea, the one that everyone later says “why didn’t I think

of that”, the focus must always be on giving an un-confusing user experience and great customer service.

CHOOSE A SUSTAINABLE MARKET Choose a product, service, or asset that has a high value, will be frequently traded, producing a high volume of transactions, or is used infrequently but at a higher transaction cost (e.g. renting a fully crewed yacht might be an infrequent purchase, but is done at a much higher profit margin than renting a river rafting kayak). Professional equipment such as cameras for filmmakers or even specialized equipment that is scarce in supply, such as dental surgery rental or nuclear-reactor parts, also work well since the equipment itself is responsible for the generation of revenue.


MARKETS OF VALUE: High value assets - cars, other vehicles, homes, real estate Frequently traded goods - handmade goods, artisanal food Services that haven’t been disrupted - dental, hair, talk therapy High transaction cost, less trades - fully crewed yachts, luxury vacation

homes, film crews Professional equipment - cameras, sound recording studios Specialized/hard to find equipment/supplies - medical, hobbyist,

antique parts, government or industry regulated engineering parts Private Member based organizations within a specialized industry

vertical or niche

TACKLE ONE LOCATION AT A TIME Many assets, services, and spaces are tied to a specific location. Examples include: cars, boats, desk space, sporting equipment, plumbers, stylists, cleaners, etc. If you are starting a marketplace that relies on the proximity of users, the best way to narrow your focus (at least in the beginning) is to start with a specific city or region. Once you capture a local market, you can gradually expand to nearby areas using the formula based on your learning’s and momentum. And staying close to your customers in a ‘high touch’ approach, will ensure faster learning to adjust or validate your hypothesis and then apply efficiencies to your business model.


BUILD THE SUPPLY SIDE OF YOUR MARKETPLACE After narrowing the focus of your marketplace, the next thing you need to do is build up the supply side. In other words, you need to acquire the inventory that people can buy, sell, rent, swap, or gift in inside of your marketplace. When you have a strong supply, matches can be made between “wants” and needs” and people will be motivated to interact. The best way to build up the supply is to tap into your networks and communities or act as a domain expert, utilizing your existing connections. Often in these specialized marketplaces suppliers can also be users, accelerating the momentum on the demand side. “Getting both sides of a transaction at the same place at the same time for the same thing can feel like it’s an order of magnitude more difficult than a more traditional one-sided commerce business.” TechCrunch

STEP TWO:BUILD UP THE SUPPLY


TAP INTO EXISTING NETWORKS Brands, existing companies, and member-based organizations and specialized forums are great communities to start a marketplace. Any size organization that has customer engagement can benefit from economy peer-to-peer marketplace. And the great thing about existing communities is that building up supply will be much easier – the users (or peers) are already there and can easily be imported into your platform. You will still need to get people motivated to use the marketplace, but you won’t need to worry about where or how to find people that are interested in what you have to offer. Member-based organizations in particular are always looking for ways to generate “non-member dues”, that is to increase revenue without increasing the cost to their members while providing member benefits. A marketplace customized for a specific member-based organization can achieve both of these goals. BE A DOMAIN EXPERT If you’re an expert on recreational vehicles, have been selling RVs for 20 years, and are deeply connected in that industry, you’d be the perfect person to start a marketplace for renting out RVs. With your industry contacts, you could even build channel partner relationships and get other people to create local RV rental marketplaces all over the world, generating great business for all of you, with you as the franchise connector.

USE AN EXISTING COMMUNITY A brand with a strong following (large user base and/or social following) is the perfect place to seed a new marketplace. The collaborative economy, or circular economy, is in many ways the evolution of social media. Many brands have hundreds of thousands, if not millions of users - what if you could translate those users into more business? For example, IKEA could integrate a furniture building network of peers into their check-out process and close the loop. Cisco Systems can provide a certified re-furbished router marketplace, where only


trustworthy channel partners are allowed to supply, where customers who would otherwise be using non-Cisco marketplaces can now use a trusted branded one. How can a marketplace help build your brand’s business? To find out, request a demo of Near Me.

START IN A COMMUNITY OF PRACTICE There’s a big difference between a “community of interest” - the hobbyist - and a

“community of practice” – the professional. Communities of Practice (COP’s) include a group of individuals who practice a particular profession. And these are great groups to start a marketplace in because they are already practicing a particular profession in an existing community, where trust is already implied by virtue of the same profession

EXAMPLES OF COP’S INCLUDE: Certified Practicing Accountants Certified Legal Practitioners Certified Fitness Trainers, Plumbers & Builders Unions Automotive Association Government Bodies and Not-For-Profits seeking economies of scale

Starting a marketplace within a community of practice where you already have the expertise and access to a large community will greatly reduce your time to market and increase the possibility for rapidly expanding your business. Trust is already implied and under-pins these COP’s and they are careful to maintain their reputations and self-moderate to remove those who bring disrepute to the collective profession. Another shortcut for building up the supply to your marketplace is setting up a private label, micro-marketplace. If you’re the domain expert and have connections, you can create partnerships with other people who have similar networks of people (micro-communities). If you can connect all of these communities together, you will not only


have the beginnings of supply taken care of but will also have the ability to create a thriving marketplace. Private labeling a micro-marketplace within your own, can also be mutually beneficial in increasing both supply and demand. Suppliers can then promote their micro-marketplace, branded as theirs filtering supply items as necessary. For example, on DesksNear.me, anyone can list their open desk space, but if a space owners wants to have their own micro-marketplace, they can apply their branding and domain name, limiting the search results to only that which they want to provide access to. With DesksNear.Me, the W Hotel used their own branding powered by DesksNear.Me which filters only W Hotel inventory excluding competitor listings. Conversely, all W Hotel listings can be made available in the DesksNear.me marketplace. This master franchise/franchisee model can apply to any marketplace on the Near Me platform.


BUILD A COMMUNITY FROM THE GROUND UP Communities can be built from the ground up, but starting from scratch is by far the most difficult way to create a marketplace. That is why we suggest being a domain expert, partnering with a domain expert or starting a marketplace within a community of practice, thereby building your own micro-entrepreneurship network. To build a community from the ground up, you need to locate suppliers, develop relationships, champion them, and learn enough about the niche you’re appealing to in order to support the suppliers in your marketplace. And that’s just the beginning! What ultimately fuels a marketplace is people. People need to be motivated to list their idle possessions, experiences, spaces, services, and goods. People have to respond to requests. People must see the benefit in participating. Understanding the W.I.I.F.M (What’s In It For Me), the motivation, and ‘value exchange’ will help you tailor the

STEP THREE:CREATE A COMMUNITY


marketplace to meet those values and increase uptake by the community. This is where community comes in - a community makes people feel like they belong and are part of something greater than themselves. Community is not just business strategy either; community involves putting time, energy, and a lot of thought into what your customers need. This means building a marketplace that reflects authentic values. The best way to think about a community is like an ecosystem - an environment where everyone can thrive. “If network effects exist, the more users a network has, the more each users benefits. That means that the value for each marketplace participants increases as the marketplace grows.”Tnooz

BUILD YOUR SUPPLIER COMMUNITY FIRST The first step in getting your community going is getting suppliers excited to participate. Once you have a community of suppliers, you can start thinking about other aspects of the business. For example, you can have a launch event and invite participants to join, leading them to eventually transact (more on that later). You must always give your suppliers the support, resources, and guidance they need to be successful.

CHAMPION YOUR BEST SUPPLIERS When it comes to finding your initial suppliers go for quality over quantity. Your initial users need to be passionate, excited, and motivated, which should translate to responsive. You need to hand pick the chosen few and champion them. When you champion someone, you’re essentially helping them get the most value out of your marketplace - and oftentimes, incentivizing them to act in a certain way. You show your suppliers how using your platform will help make their lives and businesses better. At this point, working with your suppliers will be high touch. You will spend a lot of time with each person, understanding what they need. For example, if you’re creating a car sharing marketplace, you will want to understand what motivates people


to list their cars, the functionality they think is important, and what they need to be successful in renting out their car. Think about the vertical or niche marketplace you’re

focusing on. What is everyone complaining about that you can fix? What’s a business process, onerous cost, regulatory nightmare, or supply access that you can solve for them? Find the solution that can be leveraged across your marketplace in a collaborative way.

TAKE HIGH QUALITY PHOTOS One of the things that’s been proven time and again to make suppliers successful is the quality of the photos they post to advertise their products or services. Be very specific about how to take high quality photos and educate your suppliers, if necessary. And to retain overall quality, you can even hire professional photographers to go out and shoot for all of your suppliers, producing marketplace content that can make everyone proud. Airbnb offered this service to its hosts in the beginning (and continues to offer this service today). These professional photos speak to the quality of their service and helped Airbnb build trust among both hosts and guests. A number of ‘crowd-sourced’ photography services exist to assist: - https://www.google.com/maps/about/partners/businessview/get-started/ - https://www.scoopshot.com

GET SUPPLIERS TO HELP OTHER SUPPLIERS Once you’ve discovered who your most reliable, motivated, and enthusiastic suppliers are – get them together. You don’t have to throw a party just yet, but get them in a Facebook or LinkedIn group, organize a meetup or as simple as a shared Google Doc, to share feedback, ideas, and questions. This coopetition – cooperative-competition, will help them, help each other, which will save you time so that you can focus on other things. Running webinars via Google Hangouts are free and remove the tyranny of distance, while giving some semblance of human connectedness.


A dinner invitation to a core group of passionate peers might cost a day’s wages, but

provide a year’s worth of insights. Lyft started using Facebook groups with their drivers from the get go - this created a dynamic among the drivers where they could share tips for creating happy passenger experiences - things like: what type of candy people like, perks, and even issues that came up could be discussed as a community.

REQUEST FEEDBACK EARLY AND OFTEN Request feedback often and don’t assume that you know what your users want or need. Ask them! And don’t just send out emailed surveys: get on the phone (really, get on the phone and talk to people), in person and really seek out feedback and advice on how to make your marketplace better.

CROSS POLLINATE THE PEERS Since a marketplace allows peers to act as both a provider and as a participant (suppliers and customers), cross pollination means that you will need to be a great steward, able to keep the communication going on both sides, generating enough value that the experience they have on your platform would be hard to replicate. The first adopters of your marketplace are more likely help you grow, making introductions to both sides of marketplace.

GROW SLOWLY TO START The process of creating a community should be slow and deliberate to start. That way, you can refine the details, paying close attention to where people drop off or otherwise lose interest, as well as where people complete transactions and have positive experiences. This will help you create an efficient experience for all of your customers, keeping them engaged in the short and long run. Remember to make personal contact with everyone and especially those who lose interest early.


Reach out to your marketplace participants early, often and don’t take rejection personally.

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PRODUCE COMPELLING CONTENT Content is the lifeblood of your brand. This is where you tell the story of who you are, what your marketplace is about, and share tidbits, best practices, and other useful information to keep your customers, suppliers, and visitors in the loop and coming back for more.

CREATE A BLOG Credible content is still king! The first thing you need to do is create a blog that’s attached to your marketplace. Establishing a blog will help improve your search engine rankings and engage your visitors and users over time, a long-tail SEM (search engine marketing) benefit.

STEP FOUR:PRODUCE COMPELLING CONTENT


Be fun & have personality The blog, much like your brand, should have a personality. In a blog, a conversational tone usually works best. So consider what your values are and how you want your users to receive your marketplace and then build that into how your blog is written. If you hire professional writers, they will ask you what you want the tone to be, so be ready to have an answer. Examples include: witty, educational, upbeat, professional, informative or conservative.

OFFER A MICRO-BLOGGING FEATURE Micro blogging allows every single one of your suppliers and marketplace participants to write their own blog, talking about the unique service they provide, who they are, and what they are thinking about to empower others in the market. Those in a community of practice, where your initial marketplace focus should be, are full of experts and passionate participants with lots of storytelling to share about their experience and expertise. Leverage this. Offering micro-blogging will not only help stimulate trust within the profiles of users, but the posts will also help you improve the search engine optimization of your marketplace as a whole. And just think - all of this without even lifting a finger! Near Me has micro-blogging built-in.

PRODUCE CONTENT REGULARLY Creating a blog is only the first step – you have to produce content on a regular basis for the blog to have maximum benefit. Here are some types of content that people respond well to:


9 ways to do XYZ

“How To” guides and educational posts

Best practices Company and team updates Interactive videos Guest Writers of renown or controversy industry topics Case Studies

Leveraging micro-bloggers to “feature” a supplier or user profile

KEEP THE QUALITY OF YOUR CONTENT HIGH Consistent content doesn’t mean you should release subpar content. With the way that the Google algorithms currently work, well-written, deeply researched content that’s linked from other high quality sources is what rises to the top of search results. Make sure that you produce a combination of long-form articles with unique content, in addition to regular updates and shorter form posts. All content must be credible and relevant to your audience.

GET YOUR SUPPLIERS & PARTICIPANTS INVOLVED Get your suppliers and users involved in producing content. Since they are the ones actually getting out there and transacting, they are a goldmine of content ideas. Ask your suppliers to tell their stories or your users to tell about a successful experience they had on your marketplace. If they don’t want to write the story themselves, interview them and take a photo – and put that content up on your blog so you can stimulate more experiences like them. Plus, involving your users will make them feel more engaged with you and your brand.


SHARE YOUR BLOG WITH SUBSCRIBERS As soon as you create your marketplace blog, make it as easy as possible for people to join your email list and get your updates as they happen. Also (small, but important detail) make sure that all of your marketplace users are part of your blog updates email list. Near Me has this built-in to the feature rich, marketplace solution.


ACQUIRE NEW USERS CREATIVELY Since acquiring new users is often cost-prohibitively expensive - the best way to find new users is to get creative with social media and PR, attending, participating and volunteering in conferences and events, as well as incentivizing good behavior and referrals from existing users. Being authentic and transparent is important, so be up front with your agenda when talking to people about your motivation to be involved in a ‘user acquisition’ tactic.

Your industry vertical may well have established “code of conduct” rules, and unless your marketplace is designed to up-end that, then being transparent with your intentions will ensure you will be “invited back” or even “invited into the inner sanctum”.

STEP FIVE:ACQUIRE NEW USERS CREATIVELY


USE SOCIAL CHANNELS Use Facebook and Twitter to your advantage. As soon as you start your marketplace, set up your Facebook page and Twitter profile. There are a great deal of things you can do reach out to potential customers using these social networks. And definitely Google Plus. Don’t laugh. We mean it. Your G+ profile will have a positive impact with Google Search results. - http://www.google.com/business/ Twitter Follow people who mention or have conversations about your market. That way, you will essentially ping people (the virtual version of lightly tapping someone on the shoulder) who are already interested in what you have to offer. Also, follow all of the people that the thought leaders in your niche follow, find relevant lists and follow them too. When you do, they will have the opportunity to find out about what you have to offer and follow you back. Then, start interacting with people - message them directly, respond to their questions, article, and photo shares, and create a relationship with people as well as a voice for your marketplace by creating and being part of the conversation. Also, be sure to respond to anyone and everyone who mentions you - you can do this by responding directly or favoriting their tweet to let them know you received the message. And please don’t SPAM. Self-promotion is not what we’re saying to do here. Have a natural conversation and especially where you can offer value in the response you give (even if that’s just a funny quip that leads the reader to smile). And be consistent.


Your social media presence is only as credible as the last post or tweet. So a twitter handle re-tweeting that cute “Charlie bit me” video, time-stamped at 2007, is not going to bode well for credibility. Can’t keep up with tweeting while building your marketplace, then tools like ZootRock.com can help tweet curated and industry specific content on your behalf. And of course go where your participants are likely to be. If your Community of Practice or Community of Interest isn’t using social media then you possibly have a first mover advantage, and can build a following within your niche before others do. Facebook Facebook pages can be a challenging place to create community around your marketplace, but there is one thing that Facebook does very well and that’s Facebook groups (as mentioned previously). With groups, you can get the suppliers previously championed together to create a conversation around best practices and allow for an omni-directional conversation to take place, where you typically seed and stimulate the conversation. This is not to say that you should avoid Facebook pages altogether, but rather that groups are a valuable way to share information amongst tight interest groups. And think about how you can direct people OUT OF FACEBOOK to other forums (like your own website), so they’re not distracted and sucked into the vortex of liking cat photos. Use Facebook to initiate, organize and facilitate a conversation, but as quickly as possible get them out of there. Arrest the attention, move the emotion and command the will – a call to action should be a link off of Facebook and onto your own marketplace site.


CREATE A LAUNCH AND PR STRATEGY Before your company can get notable press, you need act as your own press agent. Keeping an active social media and blog presence is important to start developing a name for yourself online. Within that approach, position your company as an expert and your leaders as thought leaders. Video, photos, blogs, testimonies, white papers, and case studies are all valuable pieces of content for media outreach. Submit Bylines Submit bylines, articles written by your CEO, to blogs within your industry. Start small, then submit bylines to high level media outlets. Find topics that you can address and begin writing. Think outside of your obvious industry to topics like business, tech, entrepreneurs, marketing, and specialized niches as well. Network with PR Professionals Attend PR events, mixers and industry conferences and ask your connections about media relationships. Get to know the media (but, don’t expect to be covered by simply building a relationship) and always think about how you can connect them to someone or something that they can benefit from. It’s always worth your time for them to know who you are for a future opportunity. Also check out HARO - http://www.helpareporter.com/ - to offer journalists topic specific information as it relates to their needs and your marketplace.

FOLLOW THE NEWS Set up Google alerts and monitor the media and Twitter every day to see the latest in your industry. Record which journalists are writing about similar topics, comment on articles (stay away from being too promotional) and share these articles with your team.

PARTICIPATE IN CONFERENCES AND EVENTS Research conferences to speak at and submit speaking proposals. If you’re not accepted, attend the conferences and network with similar companies and potential


customers. In the same mindset, organize events such as panel discussions or mixers to lead the conversation and get people connected. Search Meetup.com and EventBrite.com for existing events and if they don’t exist, consider starting one. Consider guerilla marketing tactics. Where might there be an Industry conference going on, that is far too expensive for you to sponsor or attend? Could you hire some family and friends to wear your company t-shirts and hand out free coffee and doughnuts on the opposite street to those attending, slipping in a business card and smile? DesksNear.Me rented a short term empty retail space opposite the San Francisco convention center during a SalesForce.com conference. Offering free wifi for bloggers and journalists, free coffee and desks space to attendees and promoting this via 20 TaskRabbit’s wearing DesksNear.Me t-shirts, this cost a quarter of the sponsorship cost of attending the conference and ending in great brand awareness and blog coverage from tech writers and tweets from the exact audience DesksNear.Me was appealing to; traveling technology people.

INCENTIVIZE REFERRALS Once you have enough suppliers and have some transactions being generated in your marketplace, start thinking about how to grow your user base by incentivizing current users to invite their friends, family, and colleagues. This is typically done by offering credit for your service for each new user who completes a transaction, a win/win proposition. Your (hopefully happy) users will be grateful to get compensated for recommending you, and you will get a new active user at a price you can afford to scale on. Plus, you will incentivize your current users to use your service even more with their newly earned credits and friends using the same marketplace. Of course, make sure the incentive is based on a store of value that appeals to your audience. Money or


credit may be worth less than a featured place on your blog or case study or friendly lunch catch up. Make it easy for people to write about what your marketplace does and make it a ‘no-

brainer’ for them to introduce you to others. So make sure you do ALL the leg work for

them. And by “legwork”, here’s a couple of examples: You want a blogger to write a blog post for you? Then WRITE the blog post for them, so that all they have to do is make some edits. Reaching out to a blogger with an attached article minimizes the effort on their part, increasing your chances of being published. Of course your content should be thought-leadership and high value and not self-promotional. If you’re reaching out to someone asking them to connect you with a potential

customer, channel partner, investor…. then WRITE the introduction email for them. “Hey John! I see you’re connected with Sally. If you feel comfortable in introducing

me, I’ve written up a cut/paste email to make it easy for you. No sweat if you can’t do

it, but I’d be grateful if you could. Here’s a potential email for you to use: “Hi Sally, Tom is a business colleague, and runs a Marketplace service called [insert name here]. They do [brief description of core business and it’s value.] He’d love to catch up with you if you feel there’s benefit, over you to you both to follow up from here.”


REWARD YOUR MOST ACTIVE USERS Reward your suppliers who respond in a timely and consistent manner with more business, and improved placement in the search listings by setting up an algorithm to reflect that. Also, consider giving your most active users swag or other useful or creative gifts that show your appreciation. Heck, you can even write them handwritten thank you cards – people rarely get snail mail anymore.

ENGAGE IN EXISTING COMMUNITIES Find forums, Q&A boards, articles, and communities where people who want what you have to offer hang out. And then engage in the conversation. Don’t blast them with what you have to offer. First listen and understand, and then start providing high quality content, answers, and contributions to that community to give your marketplace credibility and exposure.


CREATE TRUST & REPUTATION FEEDBACK LOOPS One of the most powerful features in a peer-to-peer marketplace is the ability to create reputation through reviews. This helps the peers using your marketplace understand the experiences others have had with them before placing their trust in them by completing the transaction. This feature is ready to go in the Near Me platform, so you will be creating trust across your marketplace from day one.

STEP SIX:CREATE TRUST & REPUTATION LOOPS


COMMUNICATION SHOULD BE BUILT IN Users need to message one another, have two-way conversations and come to terms that both parties can agree on. There is often a fear that transparent communication will lead to sales that happen outside of the marketplace. But, the reality is that your marketplace should provide so much value that there is no reason to transact outside of it (more on that later).

ENCOURAGE REVIEWS Reviews and reputation are central to building a peer-to-peer marketplace. The peer reviews are what stimulate trusted interactions and the ability for strangers to do business with one another. Once a transaction is complete, make sure that your marketplace is setup to send out automated reminders to both parties, urging them to review one another. Trust is generally implied within a Community of Practice. Most participants within a marketplace focused on the needs of fellow peers do NOT want to create an untrustworthy persona if it’s going to affect their core skillset and livelihood.

PEER GROUP VOUCHING Peer Group Analytics can also be applied to ensure that those interacting are part of an overall trustworthy group. Automation around trust scores, including the input from reviews and ratings, can help to weed out the anomalies and remove those who are not trustworthy participants. Would the participants in your marketplace vouch for one another? Exclusivity within your marketplace maybe the secret between success and failure, particularly if your marketplace is a private one. Where membership access is limited based on the recommendation or vouching for each new member, this can be used to create extremely trustworthy ecosystems.


At the end of the day, quality peer-to-peer participation will create a better marketplace vs. a huge quantity of users where trust is negligible or non-existent. Read Philip Lay’s essay on trust The Evolution of Trust in the Sharing Economy.


MAKE TRANSACTING CONVENIENT The less friction there is in a transaction, the better your marketplace will perform. In other words, keep the number of clicks between a user, signup, and transaction down to as few as possible. Every part of the user experience must be high quality, tested, reviewed and measured for benchmarking and further improvement. This includes offline transactions that occur if your marketplace requires logistical support and human contact in real life.


CONSIDER A SUBSCRIPTION MODEL If each transaction has a low value and requires a lot of interaction with the marketplace, why not bundle up the service in a monthly package where users can subscribe at a set rate? People are familiar with paying for a gym membership - why not extend that to your cleaning service, car sharing, skill trading, or babysitting marketplace? When you offer a subscription, not only do your customers have a clear idea of your value proposition, but you will also have reliable monthly recurring revenue.

STEP SEVEN:MAKE TRANSACTING CONVENIENT


OFFER CONVENIENT PAYMENT OPTIONS Give your customers enough payment options so that there is a convenient option for them. Near Me offers a wide array of payment service providers (over 60 gateways globally), including the ability to pay in nearly any currency or value exchange

FREE? Before you begin to monetize, whether by taking a ‘clip of the transaction’ or service fee, or charging a subscription for access, consider a free model so that you encourage initial early adopters and get their feedback on what value your marketplace provides and what the future business model makes sense and is the highest value for all. Marketplaces that price gouge are always ripe for disruption, so find out the win/win business model that makes most sense. Starting with a free model might help get faster initial traction. But be mindful not to devalue your marketplace where starting with a subscription or transaction fee model is acceptable from the start.

BE MOBILE FRIENDLY Make sure that your marketplace incorporates responsive design so that your website is consistent on every device, such as tablets and mobile phones. Near Me was built to work on every device, so we’ve got you covered there.


ADD VALUE BEYOND THE TRANSACTION Your marketplace needs to have a stickiness to it that makes people want to complete their transactions through your platform vs. outside of it. When you’re taking a percentage of the transaction as part of your business model, you have to provide value above and beyond creating matches and offering a payment mechanism. There are several other ways you can do this outlined below.

CONSIDER INSURANCE If you run a car sharing marketplace, for example, you will want to have a policy that covers all drivers and car owners in case of an accident. This extra protection adds the value of trust. The car owner will know that if anything goes wrong, they won’t be held liable. The same is true of space sharing – Airbnb now provides $1,000,000 of coverage in the case of the hosts apartment being trashed, mansion burning down, or other less

STEP EIGHT:ADD VALUE BEYOND THE TRANSACTION


tragic circumstances, like a piece of art being broken at a party. Realistically, in those last examples, the guest is ultimately responsible for damage, but in the case that the guest absconds without paying, the insurance is there to save the day. This is a huge value add for your marketplace and makes booking through your platform the wiser option.

COMPETE ON CUSTOMER SERVICE There is a reason that some big box stores have “no questions asked” return policies and ways of compensating their customers for negative experiences. Word spreads fast. If your users feel safe transacting through your marketplace, and believe that you won’t turn your back on them, they’ll be loyal as well. The way you communicate with all of your users should be positive. When people trust your marketplace to protect them, doing business outside of your marketplace will become more of a risk and often these are ‘users’ you’re better off without.

OFFER COMMUNITY One thing you can do to stay competitive is to generate a personality in your marketplace that’s contagious. If you create an environment where people want to help each other and there is a sense of belonging in the network, doing transactions outside of the platform will feel foreign to your customers, especially to you suppliers who need you to continue sending them new business.

PROVIDE A UNIQUE PRODUCT OR SERVICE Peer-to-peer marketplaces are still so new that there are many industries, assets, services, products, and niches that haven’t been disrupted by them. This means that if you have a unique idea or geography that is lacking access to what you’re offering, there is no other option for people to find what you have to offer. Disrupt an incumbent industry. The very nature of a peer-to-peer marketplace flips traditional ‘eCommerce’ on its head. What has been One-to-Many selling, now


becomes Many-to-Many, where the buyers can become sellers, the user of the service might also be a provider of the service.

CONCLUDING WORDS If you follow the 8-steps and best practices in this guide, you will see positive results. At Near Me, we build the technology for marketplaces to empower brands and entrepreneurs to join the movement toward peer-to-peer business and collaborative commerce. We built every single best practice in a complete solution, taking a lot of the guesswork, headache, and development cost out of building your marketplace. If you’d like a demo of Near Me, we’d be happy to show you how our product can help make your vision come to life. Request a demo of Near Me at www.near-me.com . And for brands, we help ‘complete the loop’ of the products and services offered in the supply chain and product life-cycle. We can talk to you about some of the marketplaces we’re powering for entrepreneurs and Fortune 500 companies alike.

Small Business & Entrepreneurship

8 Best Practices for a Peer to Peer Marketplace