#yoyochimp

EBay and Amazon pioneered the concept of online marketplace two decades ago, and since then hundreds of online marketplaces have sprung up all around the web and are growing and thriving - Shopping.com, Oodle, Shopzilla, NextTag, Overstock to name a few. And while online marketplaces have mostly been dominated by products, services marketplaces are soon taking the center stage. See how Zaarly went from idea to Ashton Kutcher to $14.1 million to Meg Whitman in 7 months.  Then there are other ones such as TaskRabbit, Thumbtack, AngiesList and now even Amazon is entering the services marketplace scene.

 The Emerging Trend

The next trend in services marketplace, is niche-services marketplace. Zocdoc is a marketplace that connects doctors with patients and allows patients to book doctor appointments directly online, without having to wait on hold for hours, eLance and oDesk are fueling startups with their freelance workers, and HomeJoy is helping you keep your homes clean by making it easy to find and book house cleaners online.

Yoyochimp is a new kid on the block helping parents get their sanity back and find more time in their busy lives by bringing after-school activity classes and camps in one place (Disclaimer: I am an investor in this startup - I invest my time, sweat and money as a Founder/CEO of the company!). Yoyochimp is a private community and an online marketplace where parents can research, find and buy local after-school activity classes and summer camps for kids in one place.

 Build or List

Many small businesses assume that setting up eCommerce on their own website is akin to listing their products and services in a marketplace, perhaps due to the lack of knowledge of listing their wares on the marketplace or due to the assumption that selling on own website would be more profitable and less competitive. While there is nothing wrong in assuming these assumptions, the reality is online selling is hard. Businesses may be able to build the storefront but they have to be realistic about whether they have the capacity aka marketing budget, knowledge, skills and time to drive traffic to their website and convert those visitors in buyers. Marketplace builders typically have large marketing budgets to drive paid traffic, and a chest full of SEO skill-sets to drive organic traffic. Amazon receives close to 78 million unique monthly visitors and eBay 42 million. They use proprietary algorithms and historical data to offer personalized shopping experience.  Selling online is becoming more and more competitive given a plethora of choices that buyers have, and if you, as a seller are not listed on a marketplace, you are missing out on being part of their search results, promos and marketing campaigns.

 Critical Ingredients Of A Successful Marketplace

Merely putting together a product catalog full of hundreds and thousands of products and services is not enough. A successful marketplace needs these critical elements as part of its designs to attract a large volume of buyers and sellers.

Custom search: With 40,000 search queries per second, 3.5 billion search queries per day and 1.2 trillion searches annually, Google still accounts for 78% of all searches on web. But one of the most important elements of a good marketplace is customized search. Based on products or services that are listed on the marketplace, a combination of custom search-filter-sort allows customers to quickly find what they are looking for. Amazon lists its millions of products under17 different departments and almost 160 different categories. Each category has additional 3-4 levels of  sub-categories. At each level it includes various set of filters to refine and fine-tune search. For e.g., if you were shopping for a toy on Amazon or eBay, the filters shown on that page would allow you to narrow down your search by age, gender, budget, type of toy, etc., which is different if you were buying music. Then the filters would allow you to search/filter by genre, language, band, etc. 

Shopping cart and payment integration: Amazon of course built the first full-blown shopping cart technology, but shopping cart experience could be different depending on the product or service a buyer is buying. Discounts could vary too. Example on Yoyochimp, we allow parents to add optional add-ons such as extended care, hot lunches, etc. There are several discount types that could apply to classes and summer camps on Yoyochimp – Early bird registration, sibling discount, multi-camp discount etc. Ability to accept online payment via credit cards directly or through PayPal or other 3rd parties is essential as well.

Reviews and recommendations:  Reviews are the heart of marketplaces. Reviews from other users are one of the primary reasons why Amazon is the defacto research platform for buyers. But if reviews are linked to real, verifiable profiles, it makes them even more powerful. We all know controversies surrounding fake reviews on Yelp. While neither Amazon nor eBay has a community where buyers could interact amongst themselves, Yelp incudes user forums where users can ask questions and seek help. Similarly, on Yoyochimp, combining community with marketplace ensures that reviews are written by “real” parents with “real” profiles. 

Personalization: This was one of the most novel and intriguing ideas of its times when Amazon introduced and started inserting recommendations based on buyer’s past and current buying and browsing patterns.  The fact that these marketplaces understand buyer behavior over a period of time makes the experience so much more personal and richer, because from the time the buyer lands on the website and navigates through it, she is presented with content and choices that are relevant, appealing, and useful.

 The Birth Of A New Economy

Thanks to the popularity of marketplaces we are seeing new forms of economies emerge, the latest one being the sharing economy, pioneered and fueled by likes of AirBnb and Uber. There is no limit to what you can buy or sell online these days, anything you own can be traded, rented, shared or given away for free. Amazon and eBay spun cottage industries of their own, enabling millions of people to earn their bread and butter solely by selling their products on these marketplaces, and now services marketplaces are providing more alternatives to Craigslist

 Marketplaces seem to be a win-win situation, both for buyers and sellers. While buyers enjoy the convenience of researching, buying, paying, and managing their purchases in one place, sellers are able to quickly setup their online store by making use of great tools that marketplaces offer - from help with building product/service catalog to payment gateway integrations, shipping and returns, and of course the increased online visibility and a very large set of eyeballs. By taking charge of sales and marketing, marketplaces free up small businesses to focus their precious resources on building and growing the businesses.

 In my mind, marketplaces are the best thing to happen to mankind since Focaccia bread (you can tell I don’t care about sliced bread much)!