All You Need to Know About Marketplace Liquidity

This metric gives the number of users visiting your service every month. Active visitors stand for people that somehow interacted with a platform. For instance, they can read the blog, find out the price, fill in the contact form, and more.

This term means the number of users that have done the required action, e.g. buy a product. BigCommerce claims that, on average, marketplace conversion rates are approximately 2%. It’s easy to calculate this metric with a special formula. Conversion rates = Total number of visitors / Total number of orders * 100. For instance, you have 1000 visitors and 50 orders per month. So, your conversion rate is 5%.

This metric is significant for identifying the amount of monthly revenue. AoV shows the medium size of the order through your service.

In a perfect world, this number should be zero since the marketplace would get new customers through recommendations from other users. These days, you need to integrate various advertisement channels and track the results to gain new customers. Respectively, every new user will cost you some money. It’s better to follow is metric permanently and try to decrease it.

This term stands for the probability that a user’s visit will turn into a transaction. To measure this metric you need to take the number of visits and transactions for a particular time. It leads to a formula: the number of transactions divided by the number of visits.

Seller liquidity means the percentage of listings that lead to transactions during a certain period.

Users tend to measure the company’s expertise with the content it provides. For instance, Airbnb offers to look through the accommodation details with one click. Additionally, Airbnb provides visitors with professional photos of apartments. People are visual creatures, so they tend to choose beautiful locations.

To achieve success, it’s required to show the value of your service immediately. It’s not enough to tell that the product is good. Buyers and sellers should both clearly understand the benefits they get. For example, Uber offers cooperation for drivers on the homepage.

There are a lot of popular social networks, e.g. Instagram, Twitter, Facebook. Users look through the latest news, find discounts and interesting offers via social media. Airbnb’s Instagram account provides photos taken by guests. So, users are sure that it’s a real location. As for Uber, its Instagram account is full of clients’ reviews. Additionally, Uber posts Stories about the company’s rewards and rider safety. All these help them gain trust and loyalty.

Airbnb has a forum where guests can share their personal experience of staying in an accommodation. Users have an opportunity to send real photos and discuss good or bad sides. Additionally, there is a forum of Airbnb hosts where they can talk about how to become a superhost.

Users pay a lot of attention to the design of application or website. 38% of users leave the platform with unattractive or uncomfortable design. Of course, every marketplace should take care of the user-friendly design. Apart from this, it is worth remembering that the UI/UX design is a significant element of the question "how much does it cost to build a marketplace website".

Additionally, it’s necessary to consider a responsive web design for your website. Mobile devices generate 49% of global website traffic.

Connecting buyers and sellers is the primary task for a marketplace. So, the winning strategy is creating a convenient communication way. The most wide-spread option is in-app messaging. The logic is simple. The more buyers tell the user about the product, the more users trust sellers. Trust leads to more conversions. This means the marketplace liquidity increases.

To get more transactions, you need to provide users with various secure and fast payment methods. For marketplaces, these processes are vital since users don’t want to be continuously redirecting to other pages or screens. These days, there are many ready-made payment solutions like Stripe, Braintree, or PayPal. According to the latest stats, 82% of young people shop online. Marketplaces should make the transaction process as comfortable as possible to achieve high liquidity.

It’s common to integrate the star-rating system in the app or website. Such a system gives users a way to share their experiences. Visitors can look through the reviews and decide whether or not to buy a product. The rating system is also useful for a marketplace. It’s possible to analyze the data and refuse to sell bad-quality goods.

Millennials post everything to their social media accounts. Products they buy, successful payments, and so on. To increase marketplace liquidity and gain their trust, it’s better to provide an opportunity to share buyers’ experience at once. Additionally, it’s a winning marketing solution. Their friends can become your future visitors and clients.

Your marketplace can suggest goods based on previous searches. This feature is AI-based, so it’s quite time-consuming to integrate. But, the recommendation system is perfect for increasing marketplace liquidity and boosting sales.