Why Marketplace Business Models Are So Hard to Build

Marketplace models can be incredibly rewarding—but they’re also notoriously hard to get off the ground.

Why? Because of the classic chicken-and-egg problem. You need supply to attract demand. And you need demand to attract supply.

On paper, marketplaces look amazing—low inventory risk, high margin potential, and scalable once mature. But getting there can take 10 to 20 years, and often requires a huge upfront investment.

To succeed, you either:

• Attract supply by promising immediate demand
• Or offer operational value like authentication, refurbishment, or logistics

If you’re bootstrapping, it usually makes sense to start local—where matchmaking between supply and demand is more manageable.

Marketplace playbooks aren’t shortcuts. They’re long games.

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