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Metricsstandard
How would you measure the health of a two-sided marketplace like Etsy?
How to approach it
Measure both sides and the match between them. A healthy marketplace has buyers finding what they want and sellers making sales.
How a strong answer opens
“A healthy marketplace has buyers finding what they want and sellers making sales. So I'd measure both sides and how well they match.”
Outline of a strong answer
Try answering out loud for a few minutes before you open this.
- Buyer side: active buyers, repeat purchase rate
- Seller side: active sellers, share of sellers with a sale
- Matching: search to purchase conversion, time to first sale
- Overall: gross merchandise value and take rate
- Trust: disputes, review scores
- Pick a headline metric and the inputs below it
Where this question usually goes wrong
Measuring only gross merchandise value, which can grow while sellers churn or buyers stop finding what they want.
Learn the method
Metric trees: breaking a goal into parts in Module 2, Metrics and execution.
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