19 Aug How to create a subscription product or service based marketplace?
One of the key metrics in measuring the efficacy of an online marketplace is AOV (Average Order Value). The AOV is the total sales divided by the number of transactions – or the average basket size of a customer. The total basket size and recurring purchase frequency of your customers are critical to driving up your AOV. So how can you do both in one go – that is, increase the number of recurring purchases that a customer makes without resulting in dropoff, while also creating consistent sales flow for your marketplace vendors?
A very effective method of capturing and retaining marketplace sales is by offering your customers to create a “Subscription” or a “Recurring Purchase” for products or services that they require at regular intervals or those that require restocking. Subscription models are used extensively for services, but more and more, the subscription business model is being applied to product purchases as well.
Subscription services such as Dollar Shave Club , and Quip allow customers to subscribe and receive regular monthly packs of top-up shaving material or toothbrush heads and paste. Meundies famously transformed the dull-task of purchasing new underwear into a subscription business. There are over 2000 subscription box services which has sprouted review sites such as My Subscription Addiction which are dedicated to reviewing subscription services. This model is now proven in single-brand eCommerce businesses. However as we know, a marketplace is much more than a one-off eCommerce business.
So how do you take this concept and apply it to your next Marketplace idea. Well, you need the ability to do the following:
- As a marketplace owner you need the ability to support recurring purchases for products and services, so that your vendors can create offerings where customers can subscribe and receive regular deliveries of products or services
- The marketplace platform must support the ability for your vendors to customise the subscription or recurring purchase component to their needs and their customers purchase cycles (weekly, fortnightly, monthly or specific intervals)
- The marketplace must be integrated with a payments system that supports vaulted payments so that they stored payment information can be used to process the purchases
- Your vendors need the ability to track subscriptions and view orders placed under a specific subscription
- The marketplace platform must support the ability to monitor purchases, failed billings and suspend subscriptions if the billing attempts fail a certain number of times
- Your customers require the ability to manage their subscriptions and cancel their subscriptions if required
- Customers need to be able to view orders placed under a subscription
Omnymart has done the thinking for you and has developed a fully integrated Recurring Purchase Module that is available as an add-on for the Omnymart Multi-vendor Marketplace Platform. Learn more about this module’s capabilities and be inspired to create a subscription based marketplace.