How To Make The Perfect Marketplace For Booking? Step By Step

Where does the business start? Choosing a business model for booking

Before developing a marketplace, the first thing you need to understand is for whom your services will be useful, that is, with whom and how you will work. After all, the marketplace can be aimed not only at individuals, but also at businesses.

The business concept can be built on 3 models:

• B2B (business-to-business) – the seller and the client, not individuals, but companies. For example, Sdelki.ru is a meeting place for manufacturers of goods and their distributors-wholesalers. Reid – wholesale food suppliers and distribution stores.
• B2C (business-to-client) – the seller is a company, and the buyers are individuals. Ostrovok.ru is a hotel booking service for travelers. Cruise.online – sea and river cruises from tour operators for travelers in Russia.
• C2C (consumer-to-consumer) – individuals act as a seller and a client. Kvartirka.com – Homeowners provide rental services for travelers. Avito is a bulletin board from individuals for individuals.

Quite often, startups choose one business model and then, as the company grows, scale their services and successfully mix multiple models. For example, Avito successfully combines all three models: b2b, b2c, c2c. Ads can be placed not only by individuals, but also by companies – b2c. And the partner network has expanded with delivery services from Boxberry, Russian Post – b2b.

It is important, at the very beginning, to decide which business model you will start with. This will give you an idea of ​​who you are most valuable to and who will pay for your services. In most cases, the service of booking hotels, rental housing, cars receive money not from the buyers of services, but a commission from the transaction from the seller. But if you look further, the commission is included in the rental price, which means that the buyer, tourist, site visitor pays for everything.

Thus, we have come to the second important point: the transaction must be profitable for businesses, and the price must be attractive for the buyer. To do this, you need to choose the appropriate monetization model for your platform.

Monetization Models For Rental Marketplaces

Commission

Perhaps the most common scheme for booking services. In this case, the seller pays a commission to the marketplace from each transaction. The commission can be:

• fixed percentage of sales;
• fixed amount from sale;
• floating commission, depending on the amount of the transaction.

Examples: Booking.ru, Daily.ru work according to this scheme. Posting ads on Sutochno.ru is free, and the commission from the reservation can reach up to 15%, prepaid by the guest.

For businesses, this scheme is convenient because they pay for services when they receive an order. Suitable for any booking service.

Difficulties:

1. Commission size. The transaction must be profitable for the seller and bring profit to the owner of the marketplace. To make the platform attractive, study competitor sites and their prices. Make flexible commissions depending on the size of sales or offer tariff plans depending on the size of the business.
2. Buyer and seller transactions outside the platform. To avoid dishonest sellers, you can install a prepaid payment system, i.e. the buyer pays for the service immediately, and not upon completion of the transaction. But in this case, the variety of payment methods for site visitors is lost. To do this, think about money-back guarantees in case the buyer’s plans change.

Subscription

The seller or the buyer or both immediately pay for the services of using the platform. You on a regular basis, most often once a month, receive money from subscribers. Companies can make any number of transactions per month, while keeping all the benefits for themselves.

Examples: Apple Music, Shutterstock, Ivi, Okko work on this principle.

Perfect for services with everyday or frequent use, such as renting scooters, bicycles, power banks, parking spaces or co-working spaces. Not suitable if the service involves rare use, for example, buying air tickets, renting hotels.

Difficulties: In this model, the challenge may be to earn the popularity and trust of the booking platform. Since payment is directly dependent on the number of subscribers, your profit may be delayed for an unknown period or reduced if subscribers leave the marketplace. Part of this problem can be solved by different subscription plans, discounts and promotions for paying for annual maintenance.

Placement fee

With such a system, sellers pay for the placement of services on the marketplace. For example, it can be a marketplace aggregator for renting equipment from a window washer to a tractor. Or an online beauty booking portal that brings together hairdressers, stylists, manicurists, etc.

Examples: HeadHunter, StyleSeat works according to such a monetization system , where you need to pay for each ad placement.

Difficulties: the main drawback of this system is that it works more like a complementary, rather than the main monetization scheme, because. in itself is not very profitable for the marketplace. In addition, the range of goods or services for rent must be very wide in order to act as an aggregator.

In any case, just like with the concept of a business, in the future you can mix monetization models, and try new ways to increase the profit from the marketplace.

Let’s describe an example where all three monetization methods are combined:

You have a car rental service in different cities and your partners are taxi drivers.

The commission for completed trips will be the main way of monetization.

For a subscription , you can provide taxi drivers with an application with routes, traffic jams, gas stations. And to passengers information mailing with interesting places for visiting and tourism.

By placement fee, taxi drivers can add additional services on their own – courier, cargo transportation or city tours, this will give them additional income.

MVP version as marketplace testing

After you have described the idea, decided on the business model and monetization method, you can order the development of a marketplace. In order for your booking service to be different from competitors, it must have well-thought-out functionality. It should be convenient for both buyers and partner sellers.

But, if you are limited in budget or your idea is fundamentally new, at the first stage it would be reasonable to make an MVP version (MVP – minimum viable product) of the product.

What is MVP? This is the version with minimal but viable features. It will help you enter the market and collect statistics, feedback from the audience, as well as find investors to develop your business.

What tasks will the MVP version help to solve:

• Check out the idea. To understand whether your service is getting a response, whether the audience needs such a product.
• Save the budget and earn the first money. If you are limited in funds, MVP will help you launch the project, collect the first bonuses and further invest them in development.
• Attract investors. A launched project, even with minimal features, is more likely to attract business angels than a PowerPoint presentation.

Important elements of rental systems functionality

What should you pay attention to if your marketplace offers rental services? You can independently select the minimum functionality that is necessary to launch the marketplace or you can entrust it to the developer. Cart-Power has successfully implemented more than 500 projects, including car and equipment rental.

Let’s consider the main elements of functionality even for MVP versions.

• Notification system.

You will need it for: creating a user account, password recovery, sending informational messages. Provide the possibility of notifications not only by email, but also by sms.

• Communication with the administration of the service.

In the event of a dispute between the seller and the buyer, give the opportunity to contact a service representative.

• Registration.

The registration form should not be complex and multi-level. However, for partner companies, the registration form may be more detailed in order to verify such users. Offer registration via mail or social networks, these will reduce the bounce rate and attract users at the stage of booking testing.

• User Account.

A personal account should be considered from the perspective of a visitor and a partner company. The visitor in his account should be able to: view his current and completed orders, change the status of the reservation, edit the profile. Companies have a wider functionality: manage the list of services or objects for rent, manage tariffs and services, and book.

• Search and view information about the object of the reservation.

Convenient search is a must have for any booking system. It should include many features and be flexible at the same time. Include the ability to search by names and descriptions, filters and sorting, the ability to search for objects and display on the map. Use the description of important information already in the search results so that the user goes to the page relevant to the query.

• Booking.

The booking must include basic information: dates, times, number of people, contact details. Reflect everything that can affect the final price and expected result so that users are satisfied with your service. When booking, the user enters personal information about himself. Take care of the consent to the processing of personal data and the security of their processing.  

• Reviews and ratings.

The opportunity to receive positive feedback stimulates cooperation with the marketplace, and for visitors the opportunity to find out popular places or services is valuable information.

Let’s increase the conversion. Promotion methods for booking service

After the launch of the MVP version was successfully carried out, the first rental orders were earned and investments were found, it’s time to finalize the functionality and come to grips with the content.

• Cross- platform is an important competitive advantage. According to McKinsey, travelers spend 36 days looking for the right number, while they can visit up to 45 desired pages using various devices. Adaptability for mobile devices makes your site accessible not only in comfortable home conditions, the user has the opportunity to log in at any time and clarify the order details.
• Loyalty programs. Developed loyalty programs help retain customers. At the same time, it should provide additional opportunities, be attractive and easy to use, and create a positive emotional response.

They can be conditionally divided into 3 groups:

1. Cumulative. The simplest and most understandable program. The client receives cashback in the form of points for using the services and can spend them on any material benefit.
2. Affiliate. Customers receive points for using not only your services, but also the services of partners. Accordingly, they can spend points on both your services and the services of partners.
3. Multilevel. The client is assigned a different loyalty status, which implies different “freebies”. The more he uses your services, the higher his status and more “freebies”.  

• Visual content. If you use images and content correctly, then random visitors will become customers. According to Forbes, 91% of people prefer visual information to plain text. High-quality images and photos help the audience understand your product faster, directly affect the emotions and desire to purchase the service, and help remember your product.

Payment Methods. If possible, diversify and customize payment solutions on the site. If your booking service involves working not only in your country, you should focus on popular payment systems in the countries of presence. Also, don’t forget to monitor and add new payment methods. By linking payment information to a client’s account, you save the client from filling it out again. Provide a FAQ section at the payment stage to remove all payment questions. A customized form of payment for the site creates the continuity of the site with payment and increases the credibility of the service.

Conclusion

So, to launch a marketplace for rental services, you need to:

1. Decide who your services will be aimed at and who will generate income: B2B, B2C, C2C. You can immediately think of ideas for scaling the business to other models.

2. Choose ways to monetize services, how the partnership will be implemented.

3. Think over the functionality and choose a developer to implement the project or MVP version with minimum viable features.

4. Monitor news and trends in the niche, add functionality and content that sets you apart from your competitors.