Two speakers debate whether marketplace sellers should use one platform or many. Speaker B argues financial incentives like discounts don't work, pointing to Uber and Lyft's failed price wars, and suggests instead boosting sellers who stay loyal through better search rankings and recommendations.
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So another point on there that you also mentioned as far as, you know, asking how difficult it is to kind of switch platforms or a multi-home or, you know, sometimes referred to as like multi-teneting.
Yeah, so the multi-homing question, I'm sure many of you can relate to this. So I mean, obviously what you want if you're a marketplace, it's like I want buyers and sellers to be exclusive to me ideally. Unfortunately, that's not always possible. So you always have to think about, okay, well imagine there's another marketplace or other marketplaces What can I do to provide incentives for people to, if not just be solely participate on my marketplace, let's say spend most of their activity on my marketplace. And I would say, I mean, again, you can think of lots of ways to provide those incentives. The one thing I want to mention here, which I, it's something that I feel very strongly about, I see a lot of marketplaces default to financial incentives. So it's basically, yeah, you can basically, honestly, it's, you can always pay people and they'll be exclusive, but I think we all realize that's not sustainable. So a good example of this is Uber and Lyft burning through billions of dollars to basically just steal customers from each other back and forth. I don't think that was a very constructive way of doing it because you offer loyalty, you offer discounts, and then once you stop the discounts, you're back to basically, well, I still have to compete for those customers. So in general, giving discounts is kind of financial incentives. I don't think it works very well. Ideally, what you want to do is to provide incentives that are non-monetary. So for example, let's say you tell sellers, you make it very clear to sellers that the more transactions they spend on your— they have on your marketplace, they appear higher in search results. So they get more business from buyers, right? They get recommended to buyers more or something along those lines. That's, by the way, that's costless for the marketplace to do. It's just like tweaking, like using the algorithm to tweak in to favor people that spend more on your marketplace or having the ratings and review. Like if the ratings and reviews are very good and really matter, well obviously like, so think about Airbnb, there's Airbnb, there's VRBO, there are many others. If I'm a host, sure, you can post your, many hosts have their property on all of these marketplaces, but a lot of them actually just prefer to be on Airbnb Not because, I mean, of course they can manage across different marketplaces, a little bit inconvenient, but you can manage it. The issue is you'd rather have all your transactions on Airbnb because there's significant advantages to your reputation and to the business that you get in having all those transactions and all those positive reviews on one platform as opposed to splitting them across multiple platforms.
