Questions

Can I create a P2P fashion marketplace where a seller has to buy first in order to sell? Is there any applicable model/practice for it?

We run a one-sided fashion marketplace where we need to increase the number of deals. We know that sellers also buy things (seller are buyers). They are really motivated to sell their items. What if we create a "special category" on our site where you get in if you buy something from other sellers in this "special category", and than you get immediately out if you sell something (until you buy something new again). In this case we could create a perfect consumption loop. We want to study this practice more before we run into a qualitative research and MVP.

3answers

On the positive:
1) Consignment stores often work on this type of loop. Bring a bunch of clothes, hope they sell, and apply the store credit to new purchases. Well-run consignment stores optimize to minimize their net cash payouts.
2) There are definitely clothes shoppers who feel they should reduce their existing inventory before purchasing new items.

Challenges:
It's likely though that by trying to force people into a behavior that may not satisfy their desire in that moment, that you end up creating more problems for the user and yourself. For example, you might lose a seller of great items that would sell quickly, because you're forcing them to buy something and they can't find something they love.

In commerce, it should all be about reducing friction, and the more barriers you put up, the more steps required to complete an action, the less success you're likely to have.

Here's an idea though: Why don't you just create a form of "loyalty point" or simple reputation system where people who keep up a minimum purchase quantity on your site become power users, where their listings are given higher priority than non power users.

Who knows? You might find that sellers who won't use your site to buy other clothes see the power listing and ask to pay you directly to access that feature.

Bottom line, I think you can achieve what you want to do without making it feel as forced as you initially describe.

Happy to talk this through in more detail with you.


Answered 6 years ago

(I'm the founder or Clarity, and have spent hundreds or hours talking with founders from 20+ marketplaces like Thumbtack, AirBNB, Fiverr, etc)
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It sounds like your challenge is getting more supply (sellers) but I'm assuming you want to keep the quality high - hence the idea of seeing if they're buyers first. I get where you're going with this, but here's my thoughts.

MARKETPLACE PROMISE

You're customers come to you because you made them a promise on your home page. Maybe that's to find the coolest underground fashion, or items from independent designers - regardless, that's your promise and the key is to deliver on that. Most marketplaces (almost all) curate their supply to ensure 3 things 1) quality, 2) uniqueness (aligned with the promise) 3) liquidity (supply must promote their listings for you to scale). So think about that problem and the best way to solve it - I'm guessing asking sellers to first buy may not be the best way to acheive 1,2&3.

THE GOOD NEWS

Most marketplaces I've seen, Clarity included, sells to their supply. It's usually 20-40% of the transactions come from someone who's also on the supply side. So, naturally, you could start sourcing supply from your buyers IF they fit the promise you've made on your home page.

THE BETTER APPROACH

Focus on providing a way for your sellers (supply) to make a meaningful living ($1500-$2000/month) on you site. If you do this, you'll attract other motivated sellers that will also help you provide liquidity by being responsive AND promoting their listings to their network.

If a call would help you think through it more, I'm available within a day or two. Feel free to post a request.


Answered 6 years ago

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