“We may need to solve problems not by removing the cause but by designing the way forward even if the cause remains in place” -Edward de Bono

The modern-day service marketplaces emerge as the disorganized conventional on-demand service sector started falling apart. Being an antidote or a solution for this existed market condition, it brings together all the necessary services, organize them, thus allowing the consumers to find everything they want at a single point. Today, the global on-demand service market makes an annual turnover of $57 billion and is predicted to continue growing at a CAGR of 49%.

Recently, we have seen a noticeable hike in the frequency of businesses entering the on-demand industry. The growing demands, rise in the number of mobile users and the future possibilities can be the possible reasons for this sudden hype. This document focus on delivering valuable insights on proven strategies and business models of a service marketplace, which might aid you to set up an excelling on-demand service business.

Discovering the Demand of Service Marketplace

Determining the demand is finding the worth in other words. One should be able to define the demand of their future business, else there is no point at all. There are some predefined steps to search the demand of a market.

Understand the Issues Faced by Customers

This stage in business is often ignored by many organizations, but it does not devalue this concept. Knowing what your customers exactly need and providing the same is the right way to trade. Understanding your target customers, their demands and concerns are crucial as this can influence your business success. On the other hand, if you launch a product without enquiring its market-demand, it has a very less chance to succeed.

Customer Development is Crucial

Conducting customer development is an integral part of a business. Many of us believe that the aim of this approach is to ensure that people will buy your product. However, this is totally wrong. The fact is that you will get an idea of whether your product solves the problem or not. The fundamental rules of customer development are,

  • Make suppositions regarding your product
  • Develop hypothesis on the problem
  • Confirm hypothesis
  • Develop your ideas

Research on your Competitors

This is something you can’t ignore if you are so committed to starting a business. The purpose of this approach is learning. Understanding your competitor’s strategies and goals can help you redefine yours to a clear, better one. Moreover, having a grasp on your competitor’s strength and weaknesses allows you to take more logical decisions, ultimately it will put you at the top of your game. Look at the key aspects to set your mind on while analyzing the competitors.

  • Market share
  • Competitor’s position
  • Geolocation
  • Target customers
  • ustomers volume
  • Customer development approach
  • Business model and key attributes

Define a Solid Value Proposition

A value proposition is one of the most misunderstood and underrated factors in business. Unlike much other think, it is not about adding more features or even minimizing the same. It should focus on finding the core of the customer’s problem, something that really is a stumbling block. Providing an efficient and logical solution for this problem is the game. It is recommended to develop a conversation with your customers during the customer development phase. Ask them how they would like to see your product in future, what improvements they expect etc. This can develop a spark, an idea about your unique value proposition.

Set Product Goals

Goals are reality ahead. Set measurable and logical goals related to your product. Think where you want to be after 5 years? What improvements should be implemented in your product? What more you can offer your reliable customers? Set goals and work for it.

Measure the Rate of Scaling

There is a difference between growing and scaling. Your business can be growing but is not necessary to scale. Growing means adding resources at the same rate you add the revenue. But scaling is different. Successful businesses such as Google, Paypal etc follow this concept of scaling. They add customers at a quick pace while adding very few additional resources to service those customers. To be successful, it is important to make sure that you scale gradually.

Business Model for a Service Marketplace

A business model is a definite strategic plan that helps your organization perform well and succeed. However, the crucial element of any business model is customers. Now, we will discuss on some common aspects in a service marketplace business model.

Segmentize Customers as well as the Market

Usually, businesses function in more than one market. In fact, they may target different kind of customers, customers having different behaviors and traits. You can also segmentize them on the basis of

  • Their requests and needs
  • Marketing channels to reach them
  • Mode of business relationship
  • According to varying profitability

Besides, as an on-demand services marketplace business, you can categorize your customers as Service seekers and Service providers.This will help you plan and execute separate strategies for these two entities separately.

Choose the Right Distribution Channel

Distribution channels are basically partitioned into direct, indirect, own, and partner. It is basically the medium through which the sales happen. There are few familiar distribution channels for a typical on-demand service marketplace.

  • Direct sales
  • Through website
  • Via third party websites
  • Referrals

Experiment with different distribution channels. Check which one works and which one not. Keep a balance between different channels.

Clear-cut Grasp on Revenue Sources

Varied revenue streams are necessary for a business. One can’t rely on a single revenue source all the time.Some of the major revenue streams are,

  • Featured listing
  • Subscription
  • Advertisement
  • Commission from the sales

Examine distinct sources of revenue and implement the same for a stable income.

Read more: Build an On-demand Service Marketplace: Revenue Model & Critical Features

Miscellaneous Strategies and Approaches

One of the other familiar strategies include building MVP for your platform. Developing MVP is very popular as it allows you to test your product on the real market. It enables you to filter out the unwanted features and includes only the best ones your customer admires. Besides, you can examine the data regarding the service providers as well as marketplace owners.

Scaling your platform is another popular approach. It initiates growth and ensures you are growing gradually. Some of the known approaches include,

  • Optimize for multiplatform
  • Include additional functionalities
  • Third party integrations
  • Build a loyal community
  • Potential partnership with other businesses
  • Host events

On-demand Service Booking Solution

We have discussed the business strategies, approaches, and business models, but most often we stumble during the process of software development. And guess what! Without an efficient, simplified app or a web platform, nothing makes difference. Considering the challenges in the development process, with a vision to facilitate entry-level business, Agriya introduced its service booking solution, adequate to deploy a service marketplace from the get-go. Moreover, this excelling service booking software is fully packed with market-demanding features, which is been found out through intense research and analysis. Grab Agriya’s On-demand Service Booking Solution today- step into the world of on-demand service business.

Service Marketplace Solution Demo


Developing an efficacious service marketplace and excelling in the business can’t be achieved overnight. But, it is certainly possible by committing yourself to the goals, indulging in right practices and approaches. Most importantly, take chances, explore the unexplored, measure and make decisions that matter.

Online Demo