Yonder resources · By Colin Gardiner
Marketplace terminology gets confusing fast. Here's what these terms mean, with examples of how they show up in a real business.
I've grouped closely related terms together so you can see the differences without jumping between entries.
47 terms · A–Z
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Bringing scattered buyers or suppliers into one place. Buyers can compare options without contacting every supplier separately. Suppliers can reach customers they would otherwise have to find themselves.
Example. Faire brings independent brands into one wholesale catalog where retailers can discover products and place orders. Each brand gains access to shops it would otherwise have to find and sell to individually.
Also called: Minimum viable network
The smallest network where buyers and suppliers can reliably get what they need and have a reason to come back. Start with a narrow category, location, or group of customers. Get that working before expanding.
Example. Uber tested its service in January 2010 with three cars and a small group of riders in Manhattan. Its subsequent San Francisco launch also began in one city. These early markets illustrate starting with a narrow network before broad expansion.
Also called: AOV, Average transaction value, ATV, Basket size
The average value of an order during a stated period. For a marketplace, use order GMV on a consistent basis, not platform fee revenue. AOV can rise because customers buy more items or choose more expensive items. Those are different growth drivers.
AOV = qualifying order value ÷ corresponding order count
Example. Etsy's Shop Stats separates order count from sales revenue and counts a purchase as one order even when it contains several items. Dividing that order value by the corresponding orders gives the seller's AOV, not Etsy's fee revenue.
These labels describe who trades. B2B connects businesses with businesses. B2C connects businesses with consumers. P2P, also called C2C, connects individuals. The distinction affects acquisition, trust, order size, and how much help each transaction needs.
Example. Faire connects brands with retailers buying wholesale: B2B. An independent merchant selling to a shopper on Amazon is B2C, while an individual selling a used item to another individual on eBay is P2P.
How many members of an original buyer or seller cohort return to transact in a later period. Measure the sides separately. New users do not count toward retention of an older cohort, and the return window should fit the category’s purchase cycle.
Example. On Airbnb, a guest booking another stay demonstrates buyer retention; a host receiving another completed stay demonstrates seller retention. New guests and new hosts do not show whether the original participants came back.
Also called: Chicken-and-egg problem, Chicken or egg problem, Chicken and egg problem
Buyers won't come if there's nothing to buy. Suppliers won't stay if there are no customers. You have to get the first transactions happening, usually in a small enough category or location that you can help both sides yourself.
Example. Airbnb began in 2007 when Brian Chesky and Joe Gebbia hosted three guests in their own San Francisco home. The founders supplied the first accommodation themselves, making a real transaction possible before a wider host network existed.
Also called: Supply concentration, Demand concentration, GMV concentration
How much marketplace activity depends on a small group of buyers or sellers. Measure each side separately and specify the activity base. A big customer or supplier can help you grow, but what happens if they leave?
Top-N concentration = activity from the largest N participants ÷ total activity × 100%
Example. Etsy reported that habitual buyers were about 7% of active buyers but generated about 40% of its 2025 GMS. A small buyer group drove a large share of activity.
Also called: Leakage
Buyers and sellers meet through the marketplace and then transact directly. Once the introduction is made, the platform has to keep earning its fee through demand, payments, protection, workflow, or another continuing service.
Example. Upwork has a contract-conversion process for clients and freelancers who want to move their relationship off the platform. Its conversion fee addresses the point where an introduction could become an ongoing direct relationship.
Escrow means a third party holds funds under an escrow agreement until the agreed release conditions are met. A delayed payout means the supplier receives funds later under the platform's payment schedule. Holding a balance or delaying a transfer does not, by itself, make the arrangement escrow.
Example. Upwork clients fund fixed-price milestones before work begins; money is held under escrow instructions and released through the milestone review process. Airbnb generally initiates home-host payouts after scheduled check-in under its payout rules. Airbnb describes its role as a payment collection agent.
Also called: Fragmented market
A market with many independent buyers or suppliers, rather than a few that control most of the business. Check each side separately. When suppliers are scattered and hard to compare, a marketplace can save buyers the work of finding them one by one.
Example. Faire serves independent retailers buying from independent brands. The marketplace organizes business between many separate shops and producers, each with its own assortment and buying needs.
Also called: Dollar retention, Spend retention, Demand GMV retention, Supply GMV retention
Transaction value generated by an original buyer or seller cohort in a later period, divided by that cohort’s starting-period GMV. Include expansion and contraction within that cohort, but exclude new members. It can exceed 100% even if some participants leave.
GMV retention = later-period GMV from the original cohort ÷ starting-period GMV from that cohort × 100%
Example. Upwork's 2018 annual report compared the same clients' spending across consecutive years, excluding new clients. That historical client-spend retention measure illustrates cohort expansion and contraction, using an annual client base rather than a first-purchase-month cohort.
Also called: GMV
The total value transacted through the marketplace during a period. GMV measures the size of the activity flowing through the platform. Revenue is what the platform earns. State how refunds, taxes, shipping, and fees are treated.
GMV = sum of qualifying transaction values in the stated period
Example. Etsy reports gross merchandise sales separately from revenue. GMS excludes shipping fees and is net of refunds.
Homogeneous supply is largely interchangeable for the buyer’s needs. Heterogeneous supply has differences that matter. Commoditization is the shift toward treating offers as interchangeable, often through standardization. It simplifies comparison but can make it harder for sellers to compete on their differences.
Example. For a standard Uber ride, the rider selects a service type and receives a driver match rather than choosing a particular driver. On Airbnb, guests compare individual homes by location, amenities and other characteristics that make one listing a better fit than another.
A lead generation marketplace connects a buyer with potential suppliers and may charge for that introduction. A transaction marketplace supports the purchase or booking and typically earns a fee when it happens. The model determines what the platform can measure and monetize.
Example. Thumbtack charges professionals for customer leads that match their preferences, before the professional wins the job. Airbnb's booking flow carries the guest from choosing accommodation through a confirmed reservation and payment.
How reliably participants can get the transaction they came for within an acceptable time. Buyer liquidity means finding a suitable offer. Seller liquidity means getting worthwhile business. Check both sides. A buyer finding plenty of options doesn't mean each seller is getting enough business to stay.
Example. Airbnb searches depend on the destination, travel dates and guest count. A large worldwide catalog does not fill a particular trip unless a suitable home is available for those dates and can actually be booked.
The structured offer or request people discover on a marketplace. A listing describes what is available, who is offering it, and the terms. In a reverse marketplace, it can describe a buyer's need instead of a seller's inventory.
Example. An Etsy seller creates a product listing with photos, a description, price, and delivery details. On Upwork, a client's job post is a demand-side listing that invites freelancers to respond.
In a local marketplace, participants create most of their value within a particular location. A global marketplace can match participants across locations and international borders. The same distinction applies to network effects: does new supply help nearby buyers, or buyers across the broader network?
Example. Uber matches a rider with drivers who can reach the pickup location, so useful supply is local. Upwork lets a business hire remote talent across borders, allowing a suitable professional to serve demand in another country.
Also called: Long tail
The many niche or less frequently requested offers outside the most popular choices. Each may generate little activity, but together they can serve substantial and varied demand. The catch is discovery: can a buyer find the specific thing they came for?
Example. Etsy's vintage sellers can specialize in narrow categories such as milk glass, old eyewear or art deco pieces. Those specialist assortments give shoppers options well beyond a store's most popular products.
A managed marketplace takes responsibility for more of the transaction, such as verifying quality or coordinating fulfillment. A curated marketplace selects which suppliers or offers can appear. Curation controls admission; management controls more of the experience after the match. A marketplace can do both. Full-stack models take on especially extensive operational responsibility.
Example. eBay's Authenticity Guarantee routes eligible items through authentication before delivery to the buyer, adding management to that transaction. 1stDibs vets prospective sellers and their inventory before admitting them, illustrating curation.
A model combining transactions with professional identity, relationships, and shared workflows. It helps people work together across projects. The identity and track record of the professional remain central to choosing a partner and doing the work.
Example. HoneyBook combines client projects, contracts and payments with collaboration among independent professionals. A shared project workspace keeps client and collaborator communication attached to the work and the business relationship.
Also called: Online marketplace, Multivendor marketplace, Multi vendor commerce, Digital marketplace, Marketplace business model
A business that helps independent parties find each other and transact. A two-sided marketplace connects buyers and sellers. A multisided marketplace coordinates additional groups whose participation is needed to make the transaction work. The marketplace operator, also called the admin or administrator, runs the platform and its rules. The operator is distinct from the buyers and suppliers.
Example. Uber Eats connects customers choosing meals, restaurants preparing them and couriers delivering them. Its delivery flow coordinates all three groups around the same order. Uber operates the platform; restaurants and couriers supply the food and delivery service.
The infrastructure that collects money and gets it to the right parties. A payment service provider (PSP) supplies payment services. A payment gateway securely passes payment details for authorization; one provider may bundle both functions. Split payments allocate the customer's payment among sellers, the platform, or other recipients. Allocation and bank payout timing are separate decisions.
Example. Stripe Payments bundles gateway and payment-processing capabilities. Airbnb illustrates splitting transaction proceeds: eligible hosts can share booking earnings with co-hosts using a percentage, fixed amount, or cleaning-fee arrangement.
How I describe a marketplace that also provides the software or services needed to complete the transaction. That might mean scheduling, delivery, financing, or insurance. The question is what buyers and suppliers need beyond an introduction, and why they would keep paying you for it.
Example. Faire adds payment terms and opening-order returns to wholesale discovery and ordering. These services help independent retailers try a new brand and manage the cash tied up in stocking its products.
Match rate tracks eligible attempts that reach an agreed matching milestone. Fill rate tracks demand that gets fulfilled. They can be the same in some businesses, but accepting a booking and completing the job are different events. Define success and the time window.
Rate = successful eligible units ÷ total eligible units × 100%
Example. On Instawork, an eligible worker can book an open shift, creating a match. The business still needs that worker to arrive and complete the shift, so a booked shift and fulfilled work are separate milestones.
How supply and demand get paired. In demand-side pick, the buyer chooses available supply. In supply-side pick, the supplier chooses among posted requests. Double-commit requires both sides to approve the specific match. With marketplace pick, also called prescribed pairing, the platform selects the pairing; participants may still accept or decline.
Example. Airbnb Request to Book requires guest selection and host approval. Instant Book lets the guest choose without separate host approval. On Instawork, eligible workers choose open shifts. In standard Uber dispatch, the platform selects a driver to receive the trip request.
Monogamous relationships involve repeat purchases from the same provider. Polygamous relationships involve different providers across purchases. The distinction matters because repeat discovery gives buyers a reason to return, while a settled relationship makes the platform’s continuing service more important.
Example. Upwork's rehire feature lets a client return to the same freelancer for another project. Airbnb guests can choose a different host for each destination, so repeated trips can create repeated discovery rather than one permanent provider relationship.
Also called: Multi-tenanting, Multitenanting
Buyers or sellers use competing marketplaces at the same time. Their presence on your platform does not mean you own the relationship or have exclusive inventory. Single-homing means using only one platform for that activity.
Example. Airbnb lets hosts synchronize their calendars with sites such as Vrbo and Booking.com. The same home can therefore appear on competing marketplaces while calendar updates help prevent conflicting bookings.
Also called: Density
In graph analysis, the share of possible connections that actually exist. Marketplace operators also use density for concentrated supply, demand, and activity within a relevant market. State which meaning you are measuring.
Example. Uber's matching system considers riders and available drivers near one another. A driver on the other side of a country adds little to the immediate pickup options in a busy neighborhood.
When participation changes the value other participants receive. Cross-side, or two-sided, effects connect supply and demand: more useful supply attracts buyers, and more demand attracts suppliers. Same-side effects happen within a group. Effects can turn negative when congestion or competition makes participation less valuable.
Example. OpenTable brings restaurants into a searchable reservation network and brings diners to those restaurants. Adding relevant restaurants can give diners more useful choices, while additional dining demand can make participation more valuable to restaurants.
These labels describe what changes hands. Product marketplaces sell goods and transfer ownership. Service marketplaces sell work or an outcome. Rental marketplaces sell temporary use of an asset, with availability and return conditions built into the transaction.
Example. Etsy connects buyers with sellers of physical goods. Taskrabbit connects customers with people who do jobs like furniture assembly. Turo connects guests with hosts who make cars available for a trip.
Also called: Demand-driven marketplace
A marketplace where buyers post what they need and suppliers respond. This reverses the familiar pattern of sellers publishing inventory for buyers to browse. It is useful when demand is specific enough that a static catalog does not capture the job.
Example. On Upwork, a client can post a job describing the work and review proposals from interested freelancers. The need is published first; suppliers respond to that particular project.
Also called: Software-enabled marketplace
A marketplace paired with software its customers use to run their business. The software might manage inventory or scheduling; the marketplace brings customers who can buy that inventory or book those hours. The connection matters. Selling software and running an unrelated listing site is a different proposition.
Example. OpenTable gives restaurants software to manage reservations, tables, and guest relationships. Its diner-facing marketplace helps people discover those restaurants and book the availability managed in that software.
Also called: Search friction
The time, effort and expense of finding and comparing acceptable options. A marketplace can create value by reducing that work. Adding supply without helping buyers evaluate it can make search more expensive even as the catalog grows.
Example. Airbnb lets guests narrow their search by dates, price and amenities. Those filters reduce the number of listings a guest has to inspect to find a home that fits the trip.
Also called: STR
The share of a defined inventory or listing pool sold within a specified window. Use the same pool in the numerator and denominator. For one-off goods, listing cohorts are often useful. Rental nights and service hours need their own capacity-based definitions.
Cohort sell-through = listings sold within the defined window ÷ eligible listings in the original cohort × 100%
Example. eBay's Product Research includes sell-through information alongside sold prices and seller counts. Sellers can narrow the research by product, condition, location and time window to judge whether particular inventory is moving.
Also called: Standalone utility, Network-independent value
Someone can use the product and get value from it without waiting for anyone else to join the network.
Example. A restaurant can use OpenTable's reservation book to manage its own phone bookings and walk-ins. That operational value exists even when the guest did not discover the restaurant through OpenTable's marketplace.
Also called: Providers and customers, Sellers and buyers
Supply is what people can buy or book. The supplier, provider, or seller offers it. Demand is the people who want it and can pay for it: customers or buyers. A marketplace has to serve both sides, even when one side pays all the fees.
Example. On Airbnb, a host's available home and dates are supply; guests searching for accommodation on those dates are demand. The booking brings together a specific place, party size and travel window.
Also called: Switching cost
The time, money, effort, or lost value involved in moving to another provider.
Example. An Upwork freelancer builds a work history and Job Success Score through contracts on the platform. Moving work elsewhere means leaving behind a marketplace profile whose record helps prospective clients evaluate them.
The degree to which the same people participate on both sides of a marketplace. A more symmetric marketplace has users who both buy and sell. A more asymmetric marketplace has distinct buyer and supplier groups. This describes role overlap, not whether there are equal numbers on each side.
Example. Etsy lets a person use the same account to run a shop and buy from other makers. The same participant can be a seller in one transaction and a buyer in another.
Also called: Rake
The share of transaction value the marketplace earns as transaction revenue. Commission or a transaction fee is the pricing rule: a percentage, a fixed amount, or both. Realized take rate reflects what the platform actually earns on the corresponding GMV after fee refunds and discounts. A blended take rate combines transaction types using their dollar values. Some companies report a broader revenue take rate that also includes advertising or services, so check the numerator.
Transaction take rate = corresponding transaction revenue ÷ GMV × 100%
Example. Etsy reports total revenue divided by GMS as its revenue take rate, which is broader than its transaction commission.
Also called: Matching latency
Elapsed time from a defined request or listing event to a successful match. Report the median and slower tail alongside the average. Looking only at completed matches hides participants who are still waiting or never find a match.
Example. An Airbnb Request to Book remains pending until the host accepts, declines or the request expires. The interval from request to acceptance is matching time; Instant Book removes that host-approval wait for eligible reservations.
The sequence that takes a buyer and supplier from discovery to a finished transaction. It includes choosing the match, agreeing to terms, payment, fulfillment, payout, and review. Cancellations, refunds, and disputes are branches of the same flow.
Example. On Taskrabbit, a customer chooses a Tasker and arranges the job. The Tasker completes the work and submits an invoice, after which the customer's payment method is charged. Booking, doing the work, and collecting payment are separate steps.
Also called: Purchase frequency, Order frequency
How often a defined participant group transacts within a stated period. Specify whether the denominator is all acquired buyers, active buyers, or another cohort. An average among remaining active buyers can rise even while many other buyers stop purchasing.
Transaction frequency = qualifying transactions ÷ participants in the defined group, over the stated window
Example. Etsy separates repeat and habitual buyers using purchase days and spending, distinguishing reduced activity from leaving the marketplace entirely.
Confidence that the other party will deliver, supported by evidence and marketplace rules. Reputation records past behavior through reviews and transaction history. Double-blind reviews stay hidden until both sides submit or a review deadline passes, reducing the chance that one review influences the other. Feedback extortion uses a promised or threatened review to pressure someone into a concession or favorable feedback.
Example. For Airbnb home stays, reviews appear after both host and guest submit, or after the 14-day window ends. Airbnb also prohibits threatening a negative review to obtain an unwarranted refund or other benefit.
Also called: Unbundling Craigslist, Marketplace unbundling
A focused business takes one category or customer job from a broad platform and serves it better.
Example. Reverb concentrates on the music-gear category found within broader resale sites, with tools for describing, pricing and shipping instruments. Its specialized transaction flow illustrates how a vertical marketplace can take one category further.
What the marketplace earns and spends for a transaction, buyer, seller, or local market. Start with platform revenue, subtract the costs required to serve the transaction, and then account for acquisition. Repeat behavior determines whether those acquisition costs can be recovered.
Example. Etsy earns fees while paying for processing and support. Its transaction contribution starts with those fees, not the item's full price.
Also called: Capacity utilization, Driver utilization
How much of the available capacity gets booked or used during a period. Specify whether the denominator is online time, scheduled time, bookable hours, or total capacity. High utilization can help sellers while leaving buyers with longer waits when no spare capacity remains.
Utilization = qualifying utilized capacity ÷ corresponding available capacity × 100%
Example. Airbnb's professional hosting tools report occupancy using booked nights and nights available to book. A home's listing can remain active while many of its available nights go unbooked, so an active listing alone does not demonstrate utilization.
A vertical marketplace focuses on a particular category or industry. A horizontal marketplace spans many. Going vertical lets the product solve the details of a transaction that a broad marketplace may leave to the buyer and seller.
Example. Reverb focuses on musical instruments and related gear, while eBay spans many product categories. Reverb's pricing and listing tools can therefore be built around the details of buying and selling music equipment.