"In order to capture this dynamic, marketplaces need a metric to indicate what proportion of their suppliers are heavy users or rely on it as a primary source of salary."

"Given that most marketplaces are two-sided, an accurate representation of liquidity should usually capture both buyer liquidity and supplier liquidity."

"Buyer liquidity represents the likelihood that a request or a search leads to a transaction."

"We can call this metric the Search to Fill Rate."

"Supplier liquidity is best captured by measuring the Utilization Rate of the supply side."

"Most marketplaces fall into one of three categories"

"Double-commit marketplaces"

"Buyer-picks marketplaces"

"Marketplace-picks marketplaces"

"Double-commit marketplaces tend to have the lowest liquidity since substantial time and effort is required from both sides (searching for the supply, chatting on the platform, negotiation a price) resulting in lower conversion rates."

"the number one priority should be to streamline the transaction experience as much as possible so as to increase the search to fill."

"Airbnb shifted from double-commit to a buyer-pick model for precisely this reason."

"For buyer-picks marketplaces to work, the supply side must input additional data (availability and types of products or services offered) so that a buyer can instantly transact on the platform."

"Marketplace-picks marketplaces tend to have the highest fill rate since the buyer is automatically matched to the supplier resulting in a friction-free experience."

"Since these marketplaces take on the responsibility of matching both sides, focusing on the quality and consistency of the service will be key as any poor results will be blamed on the platform as opposed to the supplier."

"Buyer to Supplier Ratio. This represents the number of buyers that one supplier can serve within a given time frame."