FAQs

• What is a marketplace business?

  A marketplace business is an online platform that connects buyers and sellers, facilitating transactions between them without holding inventory. Examples of marketplace businesses include eCommerce platforms like eBay, service-based sites like Airbnb, or curated niche platforms like Acquire.com. Marketplace platforms typically provide the infrastructure for transactions, occasionally offering an additional services component, and earn revenue through transaction fees, listing fees, or commissions.

• Are marketplace businesses profitable?

  The profitability of a marketplace business varies widely based on its execution and niche. Established marketplace businesses with a large, loyal user base can achieve significant profits due to the network effect, where the value of the platform increases as more participants join. However, achieving profitability often requires significant investment in user acquisition, platform development, and maintaining operational efficiency.

• How does an online marketplace make money?

  Marketplace businesses typically rely on a variety of revenue streams, including transaction fees, where they take a cut from each sale, and subscription models for either side of the marketplace who want access to enhanced features. Many also generate income through advertising by offering sellers the chance to promote their products or services.

• How much can I sell a marketplace business?

  How much you can sell your marketplace business for will depend on factors like your platform’s earnings, growth rate, and market niche. Most marketplace businesses are valued at a multiple of their annual profits, but other factors, such as the strength of your brand and the diversity of your revenue streams, also play a part. Larger, more established platforms with consistent traffic and revenue can sell for higher multiples.