eBiz Facts is reader-supported. When you buy through links on our site, we may earn a commission. Learn More

Online Marketplace Business – 5 Things To Know

Here's how much money you can make with a marketplace business...

online marketplace business

What is an online marketplace business?

Think of a marketplace business as the evolution of a referral business. You’d own an app or website that makes it easy for “buyers” and “sellers” to meet each other.

Many marketplaces monetize by taking a cut of each transaction or by charging for membership or listings.

Marketplace is one of 19 types of online business and considered a Level 5 online business, according to our framework.

How can you make money online with a marketplace?

Here are the legit ways I’ve found to make money online with a marketplace business…

Start a Physical Products Marketplace

John Sillings co-founded Art in Res, an online marketplace that connects artists with art buyers…

  • John Sillings

  • Co-founder of Art in Res
  • $16,000 Art in Res monthly revenue

Build a Digital Products Marketplace

Joe Magnotti co-founded Empire Flippers, a marketplace for people to buy and sell online businesses (mainly websites)… 

  • Joe Magnotti

  • Co-founder of Empire Flippers
  • $2.47 million Empire Flippers monthly revenue

Start a Services Marketplace

BJ Wright started Funnel Rolodex, a marketplace for freelancers who offer services related to building and optimizing funnels…

  • BJ Wright

  • Founder of Funnel Rolodex
  • $58,000 Funnel Rolodex monthly revenue

Pros and Cons of Marketplace Businesses

  • Quite scalable due to network effects: “the value of a product or service increases according to the number of others using it.”
  • Strong passive income potential. 
  • You don’t have to create any content (the users do that).
  • Easy to sell once successful.
  • Several monetization options.
  • Usually requires a complex set of skills.
  • Chicken and egg problem in the beginning: buyers won’t use it if there are few sellers, and sellers won’t use it if there are few buyers.
  • Quality control issues.
  • Very hard to compete with established players (again due to network effects).

Is a marketplace business a good way to earn a living online?

It’s an attractive business model but you’d need to bring your A-game and probably hire some A-players if you want to succeed. Don’t expect to get rich quick or easy.

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
About The Author