The Booking.com Marketplace Playbook

Good take on marketplaces and take rates:

tl;dr Marketplaces extract value when they generate demand. The Booking.com low rake plus bidded auction model is the playbook modern marketplaces should follow.

The difficulty with a high rake model is that you introduce a selection bias. Good suppliers that can sell well independently don’t need to participate in the market and cannibalize organic sales. This bias results in a poor consumer experience with only bad suppliers. You can see this effect in markets like Groupon, where participation is a signal for supplier quality in itself.

via The Booking.com Marketplace Playbook – Correlated Causation.

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