THE DREAM IN ACTION

The online market place will live and live and live. The same ones might not always exist but the concept will always live on the web because of the value that this type of a site adds to its chosen industry; it’s enormous. These are the 5 reason why the online marketplace is hot and will stay that way.

1) People want to buy stuff

Whether you like it or not the US is a spending economy, and sadly I don’t see that changing. Even when the economy is in shambles it’s my guess that when we come out of this recession the savings rate in America will still be horrendous. Regardless of country people need/want “stuff” and they are going to spend for it. If anything online marketplaces, especially those that are an auction, are going to increase during down times because people see these sites as less expensive alternatives to the same end. Why buy a desk in the store when I can find the same one on Craiglist or Ebay for cheaper? As times get tight people will embrace discount focused auctions to consume the same and hopefully spend less.

2) The web leverages a global pool

The value of most web based social solutions is that the web, like no other tool, can extract value from otherwise unreachable areas.  Chicago based, crowdSPRING who is an online market place for creatives and buyers to trade cash for designs has leveraged over 125 countries to reach this goal. It is exactly that kind of reach that will cause an online free market environment to be hugely successful! A web based marketplace gives a voice (power) to both sides of a transaction. If a user doesn’t pay…bad rating. If a seller doesn’t deliver…bad ratings and possible removal from the tool. Similar to the success of many open-source software development projects, when the playing field is opened up the quality of the players drastically improves.

3) Choice

People spend more when they have choices on what to spend it on. When individuals feel like they have control over what they are receiving they feel power and are more likely to spend money. However, I will say that the opposite can be true as well. Many sites have grown strong businesses by offering one and only one product at a time, but ultimately people want choice and freedom on their purchases. If someone can find exactly what they are looking for in an online marketplace they are much more likely to come back and look next time!

4) Customized protection

For any giving marketplace there has to be rules and protections for those involved. Ever heard of the SEC? They impose rules on a little marketplace call the New York Stock Exchange. Without the SEC’s rules imposed on the NYSE investors would never be comfortable putting such huge dollar amounts in that market. The system has to run strict to a set of rules that keep the best interest of the existence of the market in mind first before the interests of any given party in the market.  To use crowdSPRING as an example again, that is where they are so special. Both the companies looking to purchase the work of a designer and the designer want their work to be protected and they want to feel comfortable about how the rewards system will work. If a designer submits something for a client they need the confidence that the money will eventually be delivered which is why crowdSPRING actually holds those funds in escrow until the end of the project. It’s these type of rules and customizations that make this marketplace so valuable.

5) Constant change

A physical marketplace might be able to act as a farmers market Saturday and an art market on Sunday, but an online marketplace can be MUCH more! An online market place can be very specific like Etsy which sells only hand made products or very broad like Ebay. The ability to grow quickly but stay very customized and specific is one of the most powerful things an online market place has to offer. Adaptability is something that any developing business model needs to have. You never quite know what your customer base is going to demand of you, and you need to be able to respond. If they want a legal contract behind their transactions in order to protect them than so be it…crowdSPRING does!

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I’m sure this isn’t everything. I’d love to hear other reasons you think online marketplaces will or will not continue to be huge on the web.