Middlemen Must Adapt to Shifting E-Marketplace

With services like eBay and Craigslist connecting buyers with sellers, the internet age has been very kind to "middleman" marketplaces. Yet as with all forms of exponential technology, intermediates must adapt if they wish to survive.

With services like eBay and Craigslist connecting buyers with sellers, the internet age has been very kind to "middleman" marketplaces. But as Rafi Syed and Jeremy Levine write over at VentureBeat, intermediates must adapt if they wish to survive long-term. This is because the exponential advancement of e-marketplace technology appears to be leading to a future in which buyers and sellers forgo middleman marketplaces altogether:

"One key risk facing the operators of transactional and end-to-end marketplaces, however, is the threat of disintermediation, which happens when a buyer chooses to work directly with a seller instead of using the marketplace platform (i.e., finding a host on Airbnb and then arranging a stay with them directly). It’s difficult to disintermediate a simple listing site like Craigslist because Craigslist charges for listings and, therefore, monetizes the instant a listing is posted. Listings on a transactional marketplace, on the other hand, are typically free to post, so a marketplace like Airbnb doesn’t get paid until a transaction is completed. If a buyer and seller are able to conduct their transaction 'off the marketplace,' they can avoid marketplace fees altogether."

This phenomenon sort of reminds me of the "showroom effect," which is when consumers visit stores like Best Buy to inspect and test out merchandise before going home to order it off Amazon. Yet in this case, buyers and sellers harness the marketplace to find each other and then travel outside the marketplace to fulfill their transaction. For companies like Airbnb, this presents a now-minor, potentially major obstacle. 

Syed and Levine offer several key pieces of advice for intermediates in order to maintain a sustainable business. They range from the simple, such as keeping your surcharge at a reasonable rate, to the clever: encouraging users to stay onsite by providing ratings, rewards, and other appealing social media features. A good example is OpenTable, the restaurant reservation intermediary, which offers rewards to its users who make reservations onsite. This keeps people invested in the service. The user-submitted reviews also make it a trusted source for information with regard to finding a place to eat that night.

Take a look at the full piece below for more information about the lasting survival of transactional and end-to-end marketplaces.

Read more at VentureBeat.

Photo credit: 6kor3dos / Shutterstock

Why a federal judge ordered White House to restore Jim Acosta's press badge

A federal judge ruled that the Trump administration likely violated the reporter's Fifth Amendment rights when it stripped his press credentials earlier this month.

WASHINGTON, DC - NOVEMBER 16: CNN chief White House correspondent Jim Acosta (R) returns to the White House with CNN Washington bureau chief Sam Feist after Federal judge Timothy J. Kelly ordered the White House to reinstate his press pass November 16, 2018 in Washington, DC. CNN has filed a lawsuit against the White House after Acosta's press pass was revoked after a dispute involving a news conference last week. (Photo by Alex Wong/Getty Images)
Politics & Current Affairs
  • Acosta will be allowed to return to the White House on Friday.
  • The judge described the ruling as narrow, and didn't rule one way or the other on violations of the First Amendment.
  • The case is still open, and the administration may choose to appeal the ruling.
Keep reading Show less

How to split the USA into two countries: Red and Blue

Progressive America would be half as big, but twice as populated as its conservative twin.

Image: Dicken Schrader
Strange Maps
  • America's two political tribes have consolidated into 'red' and 'blue' nations, with seemingly irreconcilable differences.
  • Perhaps the best way to stop the infighting is to go for a divorce and give the two nations a country each
  • Based on the UN's partition plan for Israel/Palestine, this proposal provides territorial contiguity and sea access to both 'red' and 'blue' America
Keep reading Show less

Scientists just voted to change the definition of a kilogram

The definition of a kilogram will now be fixed to Planck's constant, a fundamental part of quantum physics.

Greg L via Wikipedia
Surprising Science
  • The new definition of a kilogram is based on a physical constant in quantum physics.
  • Unlike the current definition of a kilogram, this measurement will never change.
  • Scientists also voted to update the definitions of several other measurements in physics.
Keep reading Show less