Managed marketplace for services

Managed Marketplaces for Services - Unlocking Success

Future opportunities for service oriented and B2B Managed Marketplaces. How can you benefit from this latest commerce trend?

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Have you heard the expression “it’s the Uber for...” or “it’s the Airbnb for...”.

Iconic companies like Uber and Airbnb have spurred so much innovation in the way companies sell goods and services that there are literally hundreds of firms that use that business model today.

This is what’s known as the managed marketplace model.

Surprise, surprise!

Mayple is also a managed marketplace, and we are super proud of it. Andreessen Horowitz (known as "a16z"), the biggest venture capital firm in the world, based in Silicon Valley, has invested and grown tens of such marketplaces in a variety of industries.

In this post, we break down the true meaning of what a managed marketplace is, highlight some of the leading players in this industry, and offer a few tips on what we’ve learned from our journey.

[Add Banner Here]

What is a managed marketplace?

A managed marketplace is an online platform that services both buyers and sellers by connecting them together and building features that increase the ease of making transactions.

The prequel to this idea were unmanaged marketplaces, places like Craigslist or the Yellow Pages, that were mere bulletin boards. They merely displayed information in a more convenient way.

Examples of managed marketplaces include companies like Amazon, the AWS marketplace, Airbnb, Handshake, Rigup, Ladder, Lambda School, and others. Most marketplaces are only “lightly managed” today. It’s hard to find a true marketplace that adds value to both sides of the transaction.

Speaking about value, what’s so special about these online marketplaces?

Why are managed marketplaces becoming so popular today?

The world of consumerism has tremendously evolved over the past 3 decades. Consumption of goods and services has shifted to digital marketplaces and has become more acceptable than ever before. We can order nearly anything online: food, apparel, electronics, appliances, luxury products, furniture, and even cars.  

We’re seeing a lot of developments in service marketplaces as well. It’s estimated that services make up 69% of national consumer spending in the US and the Bureau of Economic Analysis estimates that only 7% of services are primarily digital.

So we’re going to see a huge wave of new businesses who are going to take advantage of this gap and help create digital assets and better processes for the $2 trillion service economy.

This digitalization has been trickling down from tech to other intangible services over the past decade. Nowadays, you can pay for someone else's time and talent to complete tasks you need to get done: dog walking, food delivery, laundry services, consulting services of any kind, etc. 

These new service marketplaces have given way to the emerging “passion economy” (a.k.a the talent economy). Emerging digital platforms allow pretty much anyone to monetize their unique skills and turn their passions and ideas into a full-time job.

It is also a great equalizer in today’s fragmented and globalized economy, where service providers can be “judged” on the actual quality of their work and their skills, and less on gender, race, religion, age, or physical proximity.

The opportunities for growth and success to all involved: customers, businesses and entrepreneurs’ possibilities seem limitless.

And that’s where the marketplace model comes into play.

Focusing on Managed Marketplaces for Services

The Managed Marketplace model we are referring to is in fact just the most recent development of the Marketplace business model. As of the past 5 years, Managed Marketplaces have gone beyond just facilitating the customer-provider relationship to actively moderating its quality.

By adding quality of service management and ongoing monitoring abilities to the demand and supply relationship, managed marketplaces are able to build customer trust. This, in turn, increases the likelihood of customer satisfaction, loyalty, and subsequent business growth for the marketplace and its customers.

Rather than just enabling customers to discover and build trust with the end provider, these marketplaces take on the work of actually creating trust. — Andreessen Horowitz

With Managed Marketplaces minimizing customer uncertainty, previously off-line services and more complex business transactions (like B2B’s) where the risks are higher (size of the transaction and potential impact) can be “converted” to online solutions as well.

Online managed marketplaces are potentially the next great leap forward for the global job market. This growing business model can create new job opportunities, restructure the employer-employee relationship, enable professionals to work from remote locations over the world, and support a healthier work-life balance. 

Service providers (from freelancers to big companies) within managed marketplaces can conveniently generate new business and grow faster, while supported by a marketplace that conveys trust and provides the required operational capabilities and experience their customers would expect. 

Consumers benefit from a better customer experience all around within a managed marketplace. The service is faster and more cost-effective. Finding the right service provider is more accurate, top service providers are more accessible, and the level of service is guaranteed by the marketplace itself. 

Mayple, for example, as a Managed Marketplace for B2B services, matches and manages the relationship between SMB’s and digital marketing service providers. We cater to businesses in need of professional marketing services and provide the business results they couldn’t otherwise obtain. 

While, in turn, enabling marketing service providers to grow using our facilitating platform to recruit and manage their business clients. We are able to guarantee high-quality service and build trust by vetting the marketing service providers we allow into the marketplace.

We also use our own AI algorithms to make the right match between the business and the marketing service provider.

We remain an objective third party of the business interaction throughout its duration providing both the platform and the guidance so both sides of the deal benefit. 

ecommerce mayple business model example image

Now let’s talk about the pros and cons of managed marketplaces.

Benefits of managed marketplaces

Here are some of the benefits that managed marketplaces for both buyers and service providers.

Lower prices

The managed model introduces a lot of efficiency into the process and helps lower prices across many industries. Marketplaces are able to lower acquisition costs and unlock supply efficiencies, unlike regular businesses.

Better regulation & quicker licensing

Marketplace companies in heavily regulated industries gain an advantage by creating faster regulatory and licensing processes. In the construction & energy industry, for example, marketplace startups like Rigup had to create a faster certification process and centralized place where construction workers could keep their certifications.

rigup-managed-marketplace

Higher quality

Marketplaces have a network effect of gathering the best minds and service providers. This only happens if they focus on the quality from the get-go. Once a network of highly qualified experts is in place, the marketplace is able to offer a differentiated experience for its customers. This sometimes involves building a product platform that really scales with customer demand.

The challenges associated with managed marketplaces

On the other hand, there are many challenging factors to consider when building managed marketplace companies.

Hard to manage the supply

Marketplace startups really need to focus on building the supply chain. They need to gather enough licensed providers that are background checked and meet quality standards. If they offer unlicensed supply or run out of service providers then it will get really hard to grow and acquire more customers.

One of the biggest challenges for marketplaces is to grow a licensed supply pool fast enough to be able to service a variety of customers. This is even harder to do if the marketplace targets a niche market.

User experience has to be perfect

Besides quality assurance, marketplace startups have to offer an experience that absolutely wows the user. We see that with the Ubers, Airbnbs, and other startups from Silicon Valley, that are known for having some of the best UX on the planet. If the user experience isn’t perfect then it can significantly slow down customer acquisition.

High development costs

The advantage of building a managed marketplace is the virtually nonexistent human capital costs but on the flip side, the development costs can go through the roof. You’re really building a platform from scratch that has to be technologically advanced enough to provide value to both the supply and the customer side.

6 tips to building the perfect managed marketplace for services

1. Develop the right matching process

With B2B the risks for marketplace customers are much higher, (compared to B2C Marketplaces). With a B2C service like Uber, marketplace customers could care less who their driver is, as long as they can get them from point A to point B safely and swiftly.

However, risking a bad match between a business and a service provider could end up costing the hiring company dearly. Many B2B interactions are long term and finding the right match can be critical to a business’s growth. That is why managed marketplaces should devote a lot of strategic thought to this initial marketplace functionality.

2. Guarantee the quality of the work

Marketplaces should create an internal certification process to establish trust with their audience. For Managed Marketplaces, where suppliers must be licensed or certified (engineers, accountants, teachers, lawyers), the initial burden of proof is slightly lifted with an external guarantee to instore trust.

However, the opportunity for a marketplace to excel lies with its ability to vouch for its service providers' performance throughout the business engagement and beyond the initial qualification sorting. 

3. Take advantage of SaaS solutions in your industry

If our predictions are true, in the upcoming years we’ll see a convergence of SaaS management platforms to a select 3-5 that will be in use per industry. For instance, all design service providers will end up using one of 3 dominant software to create graphics, website mock-ups, print layouts, etc.

And we envision this happening across other service industries as well (healthcare, content marketing, real estate, HR organizations, accounting services). It’s a good trend in our opinion and will make it easier for marketplaces to connect and integrate these tools in order to view the activity on them as part of the quality assurance offering of the managed marketplace.

In fact, this is already true in the digital marketing industry, where marketers commonly use the same advertising platforms: Facebook, Google Ads, Linkedin, Taboola, Outbrain, and Bing, just to name a few. 

ecommerce mayple continuous vetting process model

4. Make continuous quality of service a core value

A B2B marketplace for services needs to be able to guarantee their clients that their matched service providers have the relevant expertise they need and that their quality of work will not diminish over time.

With B2B marketplaces where the business relationship is long-term rather than a one-time transaction, there is added monetary value in retaining a customer and keeping them satisfied. By stressing continuous improvement as everyone's priority, everyone flourishes.

5. Keep business customers active in your marketplace

As B2B Marketplace customers grow, so will their business needs and with it the services they’ll require. The key opportunity here, for marketplaces, is to be able to provide their customers with a way to switch up or change service providers within the marketplace platform along with their changing needs.

Enabling marketplace customers to switch service providers within the marketplace platform increases the customer’s LTV (lifetime value). 

6. Build a marketplace community to build your brand

Adopt some good practices from social networks, and look beyond just being a great business solution.

Offer your B2B marketplace users an active community, where they can access professional knowledge to improve and make use of exclusive (and otherwise costly) software tools to support their work. And make sure it is easy and enticing for them to generate new and recurring business referrals on your behalf.

A lot of [marketplaces] are offering a value proposition of not just making money, but actually doing work that has some creative element and allows people to express themselves - Li Jin, Founder of Variant, ex-partner at a16Z

Recap

Managed Marketplaces for services essentially take on the real-world business process of hiring to managing and have digitized it, changing the global job market in the process.

Once B2B’s and service providers find ways to become trustworthy enough to minimize the sense of risk for their customers, this will become common practice, and there will be no turning back, nor will there be a need to. 

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FAQs

What is the passion economy?

The passion economy is a term coined by Adam Davidson in a book that carries the same name. It describes a new way that freelancers and entrepreneurs can make money doing things they are passionate about using digital marketplaces instead of having to compete in the “gig economy”.

What is the difference between a horizontal and a vertical marketplace?

A vertical marketplace is a marketplace where sellers offer goods and services specific to a particular industry or niche. It’s very specialized and under the managed model it creates specific solutions to that industry. A great example of this is NurseDash, a marketplace that helps match nurses with clinics.

A horizontal marketplace has buyers and sellers that are in a variety of industries and niches. It targets many different sectors of the economy. An example of this is Fiverr or Workrise.

Is Uber a managed marketplace?

Uber is more of a “lightly” managed marketplace because it offers some features that better match drivers to riders (such as quality assurance, background checks, and verifying reviews). But it really doesn’t offer features for both sides and manage the quality of the experience. So it’s not a true managed marketplace.

How do you define market and marketplace?

A market refers to a physical brick-and-mortar location (like a street market). It could also mean “the market” in an abstract sense. A marketplace is a digital platform that connects buyers and sellers. A digital marketplace creates an incredible opportunity in that it’s able to have a high gross margin and offer services for a great price. So it’s really a win-win for both sides.

What does a managed marketplace do?

The term managed marketplace refers to a marketplace that is more involved in the transaction and customer experience between the buyer and seller. It offers advanced features that provide value to both sides and tries to manage the interaction and processes involved in the transaction.

Managed Marketplaces for Services - Unlocking Success

Future opportunities for service oriented and B2B Managed Marketplaces. How can you benefit from this latest commerce trend?

No items found.

Have you heard the expression “it’s the Uber for...” or “it’s the Airbnb for...”.

Iconic companies like Uber and Airbnb have spurred so much innovation in the way companies sell goods and services that there are literally hundreds of firms that use that business model today.

This is what’s known as the managed marketplace model.

Surprise, surprise!

Mayple is also a managed marketplace, and we are super proud of it. Andreessen Horowitz (known as "a16z"), the biggest venture capital firm in the world, based in Silicon Valley, has invested and grown tens of such marketplaces in a variety of industries.

In this post, we break down the true meaning of what a managed marketplace is, highlight some of the leading players in this industry, and offer a few tips on what we’ve learned from our journey.

[Add Banner Here]

What is a managed marketplace?

A managed marketplace is an online platform that services both buyers and sellers by connecting them together and building features that increase the ease of making transactions.

The prequel to this idea were unmanaged marketplaces, places like Craigslist or the Yellow Pages, that were mere bulletin boards. They merely displayed information in a more convenient way.

Examples of managed marketplaces include companies like Amazon, the AWS marketplace, Airbnb, Handshake, Rigup, Ladder, Lambda School, and others. Most marketplaces are only “lightly managed” today. It’s hard to find a true marketplace that adds value to both sides of the transaction.

Speaking about value, what’s so special about these online marketplaces?

Why are managed marketplaces becoming so popular today?

The world of consumerism has tremendously evolved over the past 3 decades. Consumption of goods and services has shifted to digital marketplaces and has become more acceptable than ever before. We can order nearly anything online: food, apparel, electronics, appliances, luxury products, furniture, and even cars.  

We’re seeing a lot of developments in service marketplaces as well. It’s estimated that services make up 69% of national consumer spending in the US and the Bureau of Economic Analysis estimates that only 7% of services are primarily digital.

So we’re going to see a huge wave of new businesses who are going to take advantage of this gap and help create digital assets and better processes for the $2 trillion service economy.

This digitalization has been trickling down from tech to other intangible services over the past decade. Nowadays, you can pay for someone else's time and talent to complete tasks you need to get done: dog walking, food delivery, laundry services, consulting services of any kind, etc. 

These new service marketplaces have given way to the emerging “passion economy” (a.k.a the talent economy). Emerging digital platforms allow pretty much anyone to monetize their unique skills and turn their passions and ideas into a full-time job.

It is also a great equalizer in today’s fragmented and globalized economy, where service providers can be “judged” on the actual quality of their work and their skills, and less on gender, race, religion, age, or physical proximity.

The opportunities for growth and success to all involved: customers, businesses and entrepreneurs’ possibilities seem limitless.

And that’s where the marketplace model comes into play.

Focusing on Managed Marketplaces for Services

The Managed Marketplace model we are referring to is in fact just the most recent development of the Marketplace business model. As of the past 5 years, Managed Marketplaces have gone beyond just facilitating the customer-provider relationship to actively moderating its quality.

By adding quality of service management and ongoing monitoring abilities to the demand and supply relationship, managed marketplaces are able to build customer trust. This, in turn, increases the likelihood of customer satisfaction, loyalty, and subsequent business growth for the marketplace and its customers.

Rather than just enabling customers to discover and build trust with the end provider, these marketplaces take on the work of actually creating trust. — Andreessen Horowitz

With Managed Marketplaces minimizing customer uncertainty, previously off-line services and more complex business transactions (like B2B’s) where the risks are higher (size of the transaction and potential impact) can be “converted” to online solutions as well.

Online managed marketplaces are potentially the next great leap forward for the global job market. This growing business model can create new job opportunities, restructure the employer-employee relationship, enable professionals to work from remote locations over the world, and support a healthier work-life balance. 

Service providers (from freelancers to big companies) within managed marketplaces can conveniently generate new business and grow faster, while supported by a marketplace that conveys trust and provides the required operational capabilities and experience their customers would expect. 

Consumers benefit from a better customer experience all around within a managed marketplace. The service is faster and more cost-effective. Finding the right service provider is more accurate, top service providers are more accessible, and the level of service is guaranteed by the marketplace itself. 

Mayple, for example, as a Managed Marketplace for B2B services, matches and manages the relationship between SMB’s and digital marketing service providers. We cater to businesses in need of professional marketing services and provide the business results they couldn’t otherwise obtain. 

While, in turn, enabling marketing service providers to grow using our facilitating platform to recruit and manage their business clients. We are able to guarantee high-quality service and build trust by vetting the marketing service providers we allow into the marketplace.

We also use our own AI algorithms to make the right match between the business and the marketing service provider.

We remain an objective third party of the business interaction throughout its duration providing both the platform and the guidance so both sides of the deal benefit. 

ecommerce mayple business model example image

Now let’s talk about the pros and cons of managed marketplaces.

Benefits of managed marketplaces

Here are some of the benefits that managed marketplaces for both buyers and service providers.

Lower prices

The managed model introduces a lot of efficiency into the process and helps lower prices across many industries. Marketplaces are able to lower acquisition costs and unlock supply efficiencies, unlike regular businesses.

Better regulation & quicker licensing

Marketplace companies in heavily regulated industries gain an advantage by creating faster regulatory and licensing processes. In the construction & energy industry, for example, marketplace startups like Rigup had to create a faster certification process and centralized place where construction workers could keep their certifications.

rigup-managed-marketplace

Higher quality

Marketplaces have a network effect of gathering the best minds and service providers. This only happens if they focus on the quality from the get-go. Once a network of highly qualified experts is in place, the marketplace is able to offer a differentiated experience for its customers. This sometimes involves building a product platform that really scales with customer demand.

The challenges associated with managed marketplaces

On the other hand, there are many challenging factors to consider when building managed marketplace companies.

Hard to manage the supply

Marketplace startups really need to focus on building the supply chain. They need to gather enough licensed providers that are background checked and meet quality standards. If they offer unlicensed supply or run out of service providers then it will get really hard to grow and acquire more customers.

One of the biggest challenges for marketplaces is to grow a licensed supply pool fast enough to be able to service a variety of customers. This is even harder to do if the marketplace targets a niche market.

User experience has to be perfect

Besides quality assurance, marketplace startups have to offer an experience that absolutely wows the user. We see that with the Ubers, Airbnbs, and other startups from Silicon Valley, that are known for having some of the best UX on the planet. If the user experience isn’t perfect then it can significantly slow down customer acquisition.

High development costs

The advantage of building a managed marketplace is the virtually nonexistent human capital costs but on the flip side, the development costs can go through the roof. You’re really building a platform from scratch that has to be technologically advanced enough to provide value to both the supply and the customer side.

6 tips to building the perfect managed marketplace for services

1. Develop the right matching process

With B2B the risks for marketplace customers are much higher, (compared to B2C Marketplaces). With a B2C service like Uber, marketplace customers could care less who their driver is, as long as they can get them from point A to point B safely and swiftly.

However, risking a bad match between a business and a service provider could end up costing the hiring company dearly. Many B2B interactions are long term and finding the right match can be critical to a business’s growth. That is why managed marketplaces should devote a lot of strategic thought to this initial marketplace functionality.

2. Guarantee the quality of the work

Marketplaces should create an internal certification process to establish trust with their audience. For Managed Marketplaces, where suppliers must be licensed or certified (engineers, accountants, teachers, lawyers), the initial burden of proof is slightly lifted with an external guarantee to instore trust.

However, the opportunity for a marketplace to excel lies with its ability to vouch for its service providers' performance throughout the business engagement and beyond the initial qualification sorting. 

3. Take advantage of SaaS solutions in your industry

If our predictions are true, in the upcoming years we’ll see a convergence of SaaS management platforms to a select 3-5 that will be in use per industry. For instance, all design service providers will end up using one of 3 dominant software to create graphics, website mock-ups, print layouts, etc.

And we envision this happening across other service industries as well (healthcare, content marketing, real estate, HR organizations, accounting services). It’s a good trend in our opinion and will make it easier for marketplaces to connect and integrate these tools in order to view the activity on them as part of the quality assurance offering of the managed marketplace.

In fact, this is already true in the digital marketing industry, where marketers commonly use the same advertising platforms: Facebook, Google Ads, Linkedin, Taboola, Outbrain, and Bing, just to name a few. 

ecommerce mayple continuous vetting process model

4. Make continuous quality of service a core value

A B2B marketplace for services needs to be able to guarantee their clients that their matched service providers have the relevant expertise they need and that their quality of work will not diminish over time.

With B2B marketplaces where the business relationship is long-term rather than a one-time transaction, there is added monetary value in retaining a customer and keeping them satisfied. By stressing continuous improvement as everyone's priority, everyone flourishes.

5. Keep business customers active in your marketplace

As B2B Marketplace customers grow, so will their business needs and with it the services they’ll require. The key opportunity here, for marketplaces, is to be able to provide their customers with a way to switch up or change service providers within the marketplace platform along with their changing needs.

Enabling marketplace customers to switch service providers within the marketplace platform increases the customer’s LTV (lifetime value). 

6. Build a marketplace community to build your brand

Adopt some good practices from social networks, and look beyond just being a great business solution.

Offer your B2B marketplace users an active community, where they can access professional knowledge to improve and make use of exclusive (and otherwise costly) software tools to support their work. And make sure it is easy and enticing for them to generate new and recurring business referrals on your behalf.

A lot of [marketplaces] are offering a value proposition of not just making money, but actually doing work that has some creative element and allows people to express themselves - Li Jin, Founder of Variant, ex-partner at a16Z

Recap

Managed Marketplaces for services essentially take on the real-world business process of hiring to managing and have digitized it, changing the global job market in the process.

Once B2B’s and service providers find ways to become trustworthy enough to minimize the sense of risk for their customers, this will become common practice, and there will be no turning back, nor will there be a need to. 

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Managed Marketplaces for Services - Unlocking Success

Future opportunities for service oriented and B2B Managed Marketplaces. How can you benefit from this latest commerce trend?

Have you heard the expression “it’s the Uber for...” or “it’s the Airbnb for...”.

Iconic companies like Uber and Airbnb have spurred so much innovation in the way companies sell goods and services that there are literally hundreds of firms that use that business model today.

This is what’s known as the managed marketplace model.

Surprise, surprise!

Mayple is also a managed marketplace, and we are super proud of it. Andreessen Horowitz (known as "a16z"), the biggest venture capital firm in the world, based in Silicon Valley, has invested and grown tens of such marketplaces in a variety of industries.

In this post, we break down the true meaning of what a managed marketplace is, highlight some of the leading players in this industry, and offer a few tips on what we’ve learned from our journey.

[Add Banner Here]

What is a managed marketplace?

A managed marketplace is an online platform that services both buyers and sellers by connecting them together and building features that increase the ease of making transactions.

The prequel to this idea were unmanaged marketplaces, places like Craigslist or the Yellow Pages, that were mere bulletin boards. They merely displayed information in a more convenient way.

Examples of managed marketplaces include companies like Amazon, the AWS marketplace, Airbnb, Handshake, Rigup, Ladder, Lambda School, and others. Most marketplaces are only “lightly managed” today. It’s hard to find a true marketplace that adds value to both sides of the transaction.

Speaking about value, what’s so special about these online marketplaces?

Why are managed marketplaces becoming so popular today?

The world of consumerism has tremendously evolved over the past 3 decades. Consumption of goods and services has shifted to digital marketplaces and has become more acceptable than ever before. We can order nearly anything online: food, apparel, electronics, appliances, luxury products, furniture, and even cars.  

We’re seeing a lot of developments in service marketplaces as well. It’s estimated that services make up 69% of national consumer spending in the US and the Bureau of Economic Analysis estimates that only 7% of services are primarily digital.

So we’re going to see a huge wave of new businesses who are going to take advantage of this gap and help create digital assets and better processes for the $2 trillion service economy.

This digitalization has been trickling down from tech to other intangible services over the past decade. Nowadays, you can pay for someone else's time and talent to complete tasks you need to get done: dog walking, food delivery, laundry services, consulting services of any kind, etc. 

These new service marketplaces have given way to the emerging “passion economy” (a.k.a the talent economy). Emerging digital platforms allow pretty much anyone to monetize their unique skills and turn their passions and ideas into a full-time job.

It is also a great equalizer in today’s fragmented and globalized economy, where service providers can be “judged” on the actual quality of their work and their skills, and less on gender, race, religion, age, or physical proximity.

The opportunities for growth and success to all involved: customers, businesses and entrepreneurs’ possibilities seem limitless.

And that’s where the marketplace model comes into play.

Focusing on Managed Marketplaces for Services

The Managed Marketplace model we are referring to is in fact just the most recent development of the Marketplace business model. As of the past 5 years, Managed Marketplaces have gone beyond just facilitating the customer-provider relationship to actively moderating its quality.

By adding quality of service management and ongoing monitoring abilities to the demand and supply relationship, managed marketplaces are able to build customer trust. This, in turn, increases the likelihood of customer satisfaction, loyalty, and subsequent business growth for the marketplace and its customers.

Rather than just enabling customers to discover and build trust with the end provider, these marketplaces take on the work of actually creating trust. — Andreessen Horowitz

With Managed Marketplaces minimizing customer uncertainty, previously off-line services and more complex business transactions (like B2B’s) where the risks are higher (size of the transaction and potential impact) can be “converted” to online solutions as well.

Online managed marketplaces are potentially the next great leap forward for the global job market. This growing business model can create new job opportunities, restructure the employer-employee relationship, enable professionals to work from remote locations over the world, and support a healthier work-life balance. 

Service providers (from freelancers to big companies) within managed marketplaces can conveniently generate new business and grow faster, while supported by a marketplace that conveys trust and provides the required operational capabilities and experience their customers would expect. 

Consumers benefit from a better customer experience all around within a managed marketplace. The service is faster and more cost-effective. Finding the right service provider is more accurate, top service providers are more accessible, and the level of service is guaranteed by the marketplace itself. 

Mayple, for example, as a Managed Marketplace for B2B services, matches and manages the relationship between SMB’s and digital marketing service providers. We cater to businesses in need of professional marketing services and provide the business results they couldn’t otherwise obtain. 

While, in turn, enabling marketing service providers to grow using our facilitating platform to recruit and manage their business clients. We are able to guarantee high-quality service and build trust by vetting the marketing service providers we allow into the marketplace.

We also use our own AI algorithms to make the right match between the business and the marketing service provider.

We remain an objective third party of the business interaction throughout its duration providing both the platform and the guidance so both sides of the deal benefit. 

ecommerce mayple business model example image

Now let’s talk about the pros and cons of managed marketplaces.

Benefits of managed marketplaces

Here are some of the benefits that managed marketplaces for both buyers and service providers.

Lower prices

The managed model introduces a lot of efficiency into the process and helps lower prices across many industries. Marketplaces are able to lower acquisition costs and unlock supply efficiencies, unlike regular businesses.

Better regulation & quicker licensing

Marketplace companies in heavily regulated industries gain an advantage by creating faster regulatory and licensing processes. In the construction & energy industry, for example, marketplace startups like Rigup had to create a faster certification process and centralized place where construction workers could keep their certifications.

rigup-managed-marketplace

Higher quality

Marketplaces have a network effect of gathering the best minds and service providers. This only happens if they focus on the quality from the get-go. Once a network of highly qualified experts is in place, the marketplace is able to offer a differentiated experience for its customers. This sometimes involves building a product platform that really scales with customer demand.

The challenges associated with managed marketplaces

On the other hand, there are many challenging factors to consider when building managed marketplace companies.

Hard to manage the supply

Marketplace startups really need to focus on building the supply chain. They need to gather enough licensed providers that are background checked and meet quality standards. If they offer unlicensed supply or run out of service providers then it will get really hard to grow and acquire more customers.

One of the biggest challenges for marketplaces is to grow a licensed supply pool fast enough to be able to service a variety of customers. This is even harder to do if the marketplace targets a niche market.

User experience has to be perfect

Besides quality assurance, marketplace startups have to offer an experience that absolutely wows the user. We see that with the Ubers, Airbnbs, and other startups from Silicon Valley, that are known for having some of the best UX on the planet. If the user experience isn’t perfect then it can significantly slow down customer acquisition.

High development costs

The advantage of building a managed marketplace is the virtually nonexistent human capital costs but on the flip side, the development costs can go through the roof. You’re really building a platform from scratch that has to be technologically advanced enough to provide value to both the supply and the customer side.

6 tips to building the perfect managed marketplace for services

1. Develop the right matching process

With B2B the risks for marketplace customers are much higher, (compared to B2C Marketplaces). With a B2C service like Uber, marketplace customers could care less who their driver is, as long as they can get them from point A to point B safely and swiftly.

However, risking a bad match between a business and a service provider could end up costing the hiring company dearly. Many B2B interactions are long term and finding the right match can be critical to a business’s growth. That is why managed marketplaces should devote a lot of strategic thought to this initial marketplace functionality.

2. Guarantee the quality of the work

Marketplaces should create an internal certification process to establish trust with their audience. For Managed Marketplaces, where suppliers must be licensed or certified (engineers, accountants, teachers, lawyers), the initial burden of proof is slightly lifted with an external guarantee to instore trust.

However, the opportunity for a marketplace to excel lies with its ability to vouch for its service providers' performance throughout the business engagement and beyond the initial qualification sorting. 

3. Take advantage of SaaS solutions in your industry

If our predictions are true, in the upcoming years we’ll see a convergence of SaaS management platforms to a select 3-5 that will be in use per industry. For instance, all design service providers will end up using one of 3 dominant software to create graphics, website mock-ups, print layouts, etc.

And we envision this happening across other service industries as well (healthcare, content marketing, real estate, HR organizations, accounting services). It’s a good trend in our opinion and will make it easier for marketplaces to connect and integrate these tools in order to view the activity on them as part of the quality assurance offering of the managed marketplace.

In fact, this is already true in the digital marketing industry, where marketers commonly use the same advertising platforms: Facebook, Google Ads, Linkedin, Taboola, Outbrain, and Bing, just to name a few. 

ecommerce mayple continuous vetting process model

4. Make continuous quality of service a core value

A B2B marketplace for services needs to be able to guarantee their clients that their matched service providers have the relevant expertise they need and that their quality of work will not diminish over time.

With B2B marketplaces where the business relationship is long-term rather than a one-time transaction, there is added monetary value in retaining a customer and keeping them satisfied. By stressing continuous improvement as everyone's priority, everyone flourishes.

5. Keep business customers active in your marketplace

As B2B Marketplace customers grow, so will their business needs and with it the services they’ll require. The key opportunity here, for marketplaces, is to be able to provide their customers with a way to switch up or change service providers within the marketplace platform along with their changing needs.

Enabling marketplace customers to switch service providers within the marketplace platform increases the customer’s LTV (lifetime value). 

6. Build a marketplace community to build your brand

Adopt some good practices from social networks, and look beyond just being a great business solution.

Offer your B2B marketplace users an active community, where they can access professional knowledge to improve and make use of exclusive (and otherwise costly) software tools to support their work. And make sure it is easy and enticing for them to generate new and recurring business referrals on your behalf.

A lot of [marketplaces] are offering a value proposition of not just making money, but actually doing work that has some creative element and allows people to express themselves - Li Jin, Founder of Variant, ex-partner at a16Z

Recap

Managed Marketplaces for services essentially take on the real-world business process of hiring to managing and have digitized it, changing the global job market in the process.

Once B2B’s and service providers find ways to become trustworthy enough to minimize the sense of risk for their customers, this will become common practice, and there will be no turning back, nor will there be a need to. 

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Kelly Beaudin social media

Kelly grew Adobe's LinkedIn community by 97% and increased monthly engagement by more than 1,000% within one year. Adobe was recognized as one of the "Best LinkedIn Company Pages" for two years in a row. Kelly also grew Adobe Creative Cloud to 1M subscribers with a comprehensive social media strategy.

Jay Neyer

Jay executed a comprehensive SEO strategy that increased organic traffic by 98%, increased top 10 keywords by 190% and total keywords by 262%.

Jason Hui

Jason helped Vitamin Energy grow monthly email marketing revenue 6x in less than 6 months and increased attributed revenue from email to 40% of the total sales of the business.

Pete Opakunle - PPC

Pete increased ROAS for Gillette by 4.2X, increased CTRs by 40%-60%, achieved the desired CPA within 2 weeks of the campaign launch using Facebook, Snapchat and Instagram ads.

Deepak Shukla

Deepak helped Rivalry to rank for 20k+ organic keywords in the US and over 70k+ keywords globally in under 12 months with an extensive on-page and off-page SEO strategy.

Kelly Benson - Marketing manager & Growth marketer

Kelly developed a 6-month marketing strategy that included paid ads, SMM, mobile marketing, and marketing automation, resulting in an increase in ROI by 1200% in just 6 months.

Igor Zvagelsky

Igor promoted NY Fashion Week events using Google Ads, increasing the number of attendees at events and decreasing the cost per lead by 50%.

Jack Nelson - CRO

Jack led the CRO strategy for BeatBread, launched various conversion optimization campaigns, implemented advanced tracking & analytics, and exceeded KPI target by 75%.

Brenna Kleiman

Brenna led advertising campaigns at Jessica Simpson where she increased ROAS by 250% using Google Ads, Facebook & Instagram ads, and Google Shopping.

Kelly Beaudin Strategy

Kelly created a partnership with BuzzFeed, launched a financial BootCamp for customers, and created viral content using influencers and UGC. The campaign resulted in a +6.5% lift in awareness and a +25% increase in customers' perception of the brand, helping to drive loyalty and sales.

Angel Djambazov

Angel led influencer marketing campaigns for Keen and helped them grow to over 200k+ followers on Instagram and become one of the most loved apparel brand in the world.

Dhariana Lozano

Dhariana grew Remy's Instagram account to 10k+ followers, increased leads from social media (LinkedIn and Instagram) by 120% and increased organic views on Linkedin by 310%.

Gustavo Morais

Gustavo took Amaz, a Yerba Mate sparkling drink brand, from $0 to $50k sales per month in just a few months by designing and launching their eCommerce website and executive a comprehensive SEO strategy.

Jamie Simoni

Jamie helped build American Eagle Outfitter's online community to 15M+ followers and was integral in setting up the award winning Live Your Life influencer marketing campaign.

Limor Gurevich

Limor grew our email list by 200% and took our email program from $0 to $6k/month in just a few months using popups + email flows + email marketing automation.

Katrina Julia

Katrina led an influencer marketing & PR campaign for this tourism brand that resulted in a funding round of $3M.

Marija Todorovic

Marija grew Brightech's Instagram page to over 30k followers and its cumulative online presence to 200k followers using secondary accounts in just 12 months.

Edwin Gan - CRO

Edwin helped CloudWaitress generate 2x conversions for 3+ consecutive months. They gained 10,000 new users and became one of Australia's fastest-growing startups with 700% growth.

Dan Ware

Dan created a strategic marketing plan for Mountain Dew and produced and executed 360 engagement platforms - Dare to Do, All Star Weekend, and others. These campaigns improved brand awareness, affinity and sentiment levels.

Dorian Reeves SMM

Dorian grew Lenskart to over 10k followers and increased engagement by 50%.

Ashna Rana CRO

Ashna was the lead CRO manager for PrettyLitter, a subscription product, where she optimized the marketing funnel and was able to increase the conversion rate 35% test after test. As a result, the company was able to expand to Pinterest Ads, Facebook ads, and affiliate marketing.

Roman Hotsiak

Roman created seven email campaigns that led to this beauty brand's revenue to increase by 56% in just 6 months.

Hire Managed Marketplaces for Services - Unlocking Success

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