So, you have decided to create your marketplace. Superb! Now, how do you decide on the best type of revenue model to use?
A membership plan and the commission models are the two most accepted and profitable revenue models for marketplace industry. The commission model for the marketplace is discussed in my previous blog post. So, I’ll be focusing on the membership plan the Magento 2 offers.
A membership plan or model is a form of revenue model where people pay a recurring fee to access the value generated by an organization. It offers the framework for various levels of membership, sources of income, marketing activities, events and conferences, and finance.
How does the membership plan work in Magento 2:
You can start a subscription-based service using the Membership Plan Feature. If the store admin requires membership plans to work, then all new vendors and current sellers will have to buy a membership plan from the owner of the store to add their goods to the Multi-vendor Marketplace.
According to the requirements, the admin may build different membership plans. The store administrator will give an alert to the vendor whose membership agreement is about to expire.
Membership plan and commission models attract sellers to your marketplace if your plans are not overcharged. Keep them affordable and do check the competitor marketplaces for the same. If you are having trouble attracting sellers to your marketplace then this article can help.
Benefits of a membership plan:
1. Stable Cash Flow:
It has probably been mentioned a thousand times, and it is true: you can create recurring revenue by running a membership marketplace. In return for access to add unlimited products, sellers pay a monthly (or annual) fee, which also ensures you can continuously build on your income every time you get more subscriptions.
2. Lower Marketing Costs:
A marketplace can provide you with a pre-qualified audience. Your sellers are likely to have higher interest rates, interaction, and conversion when it comes to selling new products and related services, not to mention that they have all sorts of valuable information that lets you determine what kinds of new products to add and to make!
3. Lower Costs of Business:
The cost of creating products or services is lower than other forms of business revenue models because the value you generate can be scaled for all the sellers (networking activities, online tools, etc.).
4. Additional Revenue Opportunities:
Sellers will also sell items (such as caps and shirts) on top of membership fees and can pay for product listing. You may also obtain support from companies and organizations wanting to advertise to brands if you have sufficient sellers.
While the above advantages are good for a marketplace, membership models often offer a simple way to increase the satisfaction of members by catering to their exact needs.
I hope this article was helpful and you now have a better understanding of the membership model and how it can help you make money. The Magento 2 Marketplace module offers much functionality which benefits all the related entities. You can read this article; it is focused on the top features of the Magento 2 marketplace extension.