Dilemma...How do I keep people on my website?

[thegreatdanton]

Hi there,

I'm currently in the process of setting up a new business. Without giving too much away my website will essentially be a marketplace between buyers and sellers. It is a reverse auction where buyers can receive quotes from several suppliers for a service and the buyer then orders their preferred supplier by paying on our website.

However, we have a dilemma. How do we keep buyers from interacting with suppliers offline and trying to get a better deal in the process? We are charging commission for bringing the buyer to the supplier. So if the supplier charges €500 for their service then we will take a percentage commission (e.g. - 12%). However, the buyer will be able to see a list of all the suppliers that tendered. At the moment we don't really have a plan in place from preventing the buyer from going off our website and ringing the supplier directly in order to get a better deal.

Does anyone have any suggestions on how we can prevent (as much as possible) this from happening? Any advice or help would be greatly appreciated.

[briandaman]

Many years ago, I developed an online dating site. I doubt they are in business anymore, but one thing they wanted was to control the communication between the two individuals. It's kinda the same concept. You would need to hide each person's contact information and moderate exactly what they post to each other. It's pretty ugly and messy. Other than that level of control, I don't think you will have any way of ensuring they don't contact each other.

[ScriptMan]

Since both parties are potentially receiving a value from the service, I would suggest that you just charge a membership fee to both buyers and sellers. They do not have to be equal but they could be. They could be adjusted upwards as the demand for the service grew.

I happily pay my membership fee to Sam's Club every year because I know I will save way more than that fee each year.

[Tedel]

Originally Posted by ScriptMan

Since both parties are potentially receiving a value from the service, I would suggest that you just charge a membership fee to both buyers and sellers. They do not have to be equal but they could be. They could be adjusted upwards as the demand for the service grew.

I happily pay my membership fee to Sam's Club every year because I know I will save way more than that fee each year.

^Makes sense.

You could also follow Fiverr's model, forbit explicitly to exchange contact information, and just let set up stop rules for messages. That way you would just need to approve the suspicious ones.

[aeneas]

Forbidding to exchange contact information at all sounds impossible as you want them to contact eachother and make a deal (contract) between the two of them.

You also have to think if you want to start with a public/free trial to get people on your site (no-one will pay membership if it's a new site and no-one else is using it), and how you can limit things/get paid later when people are actively using it.

What you can do is hide contact information until the very end - someone can ask for offers, you show the price quotes but not the contact info. Only when he's interested and has paid a small fee (fixed amount/membership/..) you show contact info of whom has bid.

Other option is to just charge people to enter a request. Maybe refund them (a bit) if it gets no reactions from suppliers.

[thegreatdanton]

Thanks for the reply guys. Definitely some interesting comments there. We've slightly changed our model in the last few months to counteract any potential issues that might arise like people leaving our website. Thanks again for your valuable contributions.