Monthly Marketplace Article Roundup: July 2018

From the gig economy, to blockchain, to controlling the sale of counterfeit products, there’s a lot to discuss when it comes to digital marketplaces. As July comes to a close let’s review the top 4 articles that explore the rise of digital marketplaces:

Trust is the cornerstone of all marketplaces—without it, buyers and sellers aren’t going to transact, and in many cases the marketplace will develop a bad reputation that drives users to the competition. One of the biggest threats to trust in marketplaces is counterfeit goods. It’s a problem the plagues marketplaces big and small.

In the past, brands would combat this problem by running tests to verify the authenticity of the products, but this approach is time consuming and costly. That’s why many companies are now turning to artificial intelligence to detect counterfeit items by comparing images to spot abnormalities.

In testing, artificial intelligence solutions showed that over 55% of 500 original products on marketplaces had at least one counterfeit counterpart. As marketplaces continue to take a more active role in facilitating transactions, these AI solutions are going to become must-haves, in order for marketplaces to minimize their liability exposure.

In an effort to make marketplaces more advantageous to sellers, the Global Alliance of Marketplaces on the Blockchain (GAMB) is allowing sellers on their platform to write the rules of the marketplace.  Additionally they’ll also be able to provide input on features, services, costs, and fee structures. These guidelines however won’t be set in stone and instead will be constantly evolving.

At the moment there isn’t too much information on how the technology will work.. According to the company website, the project is still in the initial coin offering (ICO) phase, and the name and brand of the marketplace has yet to be released.

In theory, this is an interesting project, and although the concept sounds lofty, platforms such as Origin are taking a similar approach to marketplace architecture.

In an effort to make marketplaces safer, the EU’s executive body has proposed voluntary guidelines to expedite the removal of dangerous goods from marketplaces, such as non-food consumer products. Leading marketplaces such as Alibaba, Amazon, eBay, and Rakuten have begun complying with the regulations, likely because they fear the EU government implementing mandatory regulations.

While the guidelines are broad, the rules primarily involve marketplaces taking a proactive stance on spotting dangerous goods and putting measures in place to penalize repeat offenders.

For marketplace operators, the EU approach to regulating marketplaces appears to be a win-win for everyone involved. Although policing a marketplace for dangerous goods requires some effort and resources, maintaining a stellar image helps to attract quality sellers and buyers to the properties.

[Click to Tweet] 50% of gig workers use #marketplaces as their primary source of income. To meet their needs, platform operators need to offer payment flexibility [/Click to Tweet]

When it comes to running a services marketplace, if you want to attract quality sellers, you need to remember one thing—money talks. Even if you aren’t directly managing payroll for your service providers, as a platform operator, you still have a responsibility to pay sellers in a timely manner. In fact, this article references a report that found that 50% of gig workers use marketplaces as their primary source of income.

Offering competitive compensation only gets you so far in the marketplace space. In order to effectively stand apart from the competition, platform operators need to make it as easy as possible for service providers to receive their compensation. They can do this by offering compensation in the currencies their sellers use, and also at flexible terms.

To learn more about how the marketplace business model can help improve your profitability, check out The Kahuna Blog. Simply click the button below!

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