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Start a Rental Marketplace like Airbnb with a right model

By Akshat Bansal 17th July 2018

“Choosing the right marketplace business model for its operation is the key for the sustainable and successful marketplace”

The scenario is changing fast with a shift from owning to renting. Today, everything we need is available on rent that creates more value for money compared to owning. Currently, the market is tilted toward the purchase-oriented online service marketplace. Rental oriented online service marketplace is a little complex as compared to purchase-oriented online service marketplace. Rental  Marketplace business involves three phase of the order lifecycle :

  1. Booking product and services
  2. Services during the booking period
  3. Getting back the product or services

Usually, the rental marketplaces involve the renting of goods with the high percentage of net worth such as vehicles and homes. It is a one-to-many transaction type. Renting makes sense when the frequency of usage is less and owning involves a huge investment. It’s a game of supply and demand. The relation between supply and demand is not one-to-one. One to many relationships creates trouble at the supplier end. Since the demand for one is created by many. The best example of this is Car Renting, one car can be rented by multiple consumers with the different time frame.

Why Online Rental Marketplace?

Want camera for vacation, need homestay in different cities, need a vehicle to travel, there are multiple online rental marketplaces available to rent out such products and services. Online rental marketplace connects multiple business and individuals together to provide a wide range of products onto the consumer who needs it. Today’s generation is more mobile, shifting to new cities for the job, renting the good is the most viable solution for them. With businesses jumping into providing goods on rent, consumers are able to get goods in no time spending only a small fraction of ownership cost. Start a Rental Marketplace like Airbnb with a right model

Sharing economy is getting popular these days, and the rental marketplace is a part of the sharing economy. Rental equipment industry is experiencing growth of around 5% YOY growth. 2018 is the right time to enter into the rental marketplace. Even if there are many big players in the rental marketplace, but still many industries are untapped with huge growth potential.

Major challenges in the Online Rental Marketplace

Challenges in an online rental marketplace aren’t few. With growing fame in an online rental marketplace, the challenges become big. Major challenges in the online rental marketplace depend on the industry you are focussing on. To list a few common challenges despite industry are:

  • Analytics

Online rental marketplace depends upon the analytics to understand the customer needs and expectations. According to business insights, you can understand the customer buying behavior and customer expectations. Understanding the customer needs and delivering products & services as per customer requirements make you retain most of the customers. Analytics helps to enhance the service provided to the customers. According to Marketing Metrics, 34% of customers switch to a different platform because of dissatisfaction with services.

  • Logistics

As discusses, the online rental marketplace works on the one-to-many model. Many consumers rent the same good for a particular period of time. Managing the logistics in the online rental marketplace is based on optimizing supply and demand. If you have the number of good in your inventory as compared to the demand for rent, the inventory carrying cost applies. In case the supply is less than the demand, you lose the customers. Analytics comes into the picture to optimize the supply-demand that generates more profit and less cost to the business.

  • Focussing on Quantity

In the online rental marketplace, quantity is a necessity, but the optimized quantity is essential. To cater to consumer demands, enterprises either increases the quantity or decline the quality. Since the same good or product is used or rented by multiple consumers, quality of good must be consistent. 66% of customers said that the features and quality of the product or service were the most leading factors in determining brand loyalty.

Online Rental Marketplace Revenue Model

The online rental marketplace has a huge potential to rise in developed and developing countries. If you are planning to launch your business in the online rental marketplace or have an existing business. Your business model must have the following revenue sources:

  • Commission 

In the multi-vendor online rental marketplace, manage the commission based on fixed or percentage of the transaction value to be cut from the amount paid by the renter to rentee. Online rental marketplace platform must have a feature to generate reports of commission and to cut the commission on each transaction.

  • Listing

In the online rental marketplace involving goods or products from multiple vendors, the revenue can be extracted from the listing of products or services on the platform. The listing revenue model is used by leading e-commerce marketplace ETSY. The vendors have to pay the fees to list their offering on the rental marketplace.

  • Subscription

Let consumers subscribe to your rental services for week/month/year and earn a periodic subscription fee. Subscription is one of the best strategy used by enterprises for customer retention. Postmate is the best example to learn the importance of subscription as a source of revenue stream. Not to mention, it is one of the most common revenue sources in the online rental marketplace.

  • Affiliation

Affiliate marketing is a process of earning commision for promoting products and services. Earn a large percentage of commission using affiliation marketing on an online rental marketplace. Offer vendors to promote their product or service on your online rental marketplace through an affiliate program, that will show the listing of product/services on the top and attract a greater percentage of commission.


The online rental marketplace has a huge potential and online rental marketplaces like Airbnb and Revv are well recognized around the world. Starting a new business of online rental marketplace is a great initiative as an online rental marketplace have very few competitors to compete with. This creates a good opportunity for entrepreneurs to enter and start their business in the online rental marketplace. In fact, customer retention must be on the priority in the online rental marketplace followed by customer satisfaction and customer acquisition.

Get in Touch with us if you want to build the next big rental marketplace! And let’s begin your journey to success.

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