Two-sided marketplaces bring together buyers and sellers, or customers and service providers, and give them a quick, safe, and worthwhile place to exchange value. This kind of platform succeeds when both sides show up together in a way that creates reliable, repeatable transactions. Some of the most successful multisided marketplaces include apps like Airbnb and Uber, which earned over $11 billion and $44 billion in 2024, respectively.

The interdependence, however, introduces challenges, which a two-sided marketplace strategy can directly address. This strategy outlines which side to build first, how to keep the system in balance, what infrastructure matters early on, and how the model needs to change as the network expands.

Below, we’ll explore how marketplaces address these issues. This includes advice on where meaningful trade-offs lie, how challenges manifest, and what makes a marketplace resilient over time.

What’s in this article?

• What is a two-sided marketplace strategy?
  
• How do marketplaces attract and balance both sides of the network?
  
• What tools help operate a two-sided platform effectively?
  
• What challenges should you prepare for as you scale a two-sided marketplace?
  
• What makes a two-sided marketplace strategy durable?
  
• How Stripe Payments can help
  

What is a two-sided marketplace strategy?

A two-sided marketplace connects two interdependent groups (typically buyers and sellers) and provides the infrastructure for them to transact. The platform isn’t the business; it’s the engine that matches participants, enables payments, and enables coordination. This type of multisided marketplace includes ride-sharing apps, short-term rental apps, and online ecommerce or reselling platforms.

Because neither side gets value without the other, the business depends on network effects. More high-quality sellers attract more buyers. More active buyers motivate more sellers to join. When the feedback loop repeats, growth compounds.

Network effects activate only when the platform maintains balance. Excess demand leads to empty shelves, while excess supply leads to idling, frustration, and churn. A marketplace strategy coordinates participation and creates liquidity so the right user meets the right counterpart at the right time.

How do marketplaces attract and balance both sides of the network?

A marketplace succeeds when it can align supply and demand in the same context, whether it’s the exact location, category, or time window. These sides grow unevenly so your strategy should start with intentional sequencing and ongoing calibration.

Here’s how businesses attract and balance both sides.

Start by operationalizing supply

Many marketplaces seed supply first. Providers have a direct incentive. They can earn, but they still need structure. They must create listings, capture availabilities, set pricing models, and support workflows. Early on, you need to make the platform ready for transactions by building internal tools, curating initial inventory, or manually helping providers support their offerings.

Concentrate activity to generate liquidity

Early marketplaces work best when they have a narrow focus. A single neighborhood, a niche category, or a high-intent audience creates density so buyers reliably find what they came for and providers see real demand. Liquidity is the result of demand finding an available supply.

Use incentives to nudge the system towards balance

The two sides of a marketplace rarely harmonize. One might be costlier to acquire, one might have higher churn, and one might convert slowly. Ongoing intervention balances these forces. Marketplaces subsidize demand to stimulate activity, offer bonuses to expand supply, or use dynamic pricing to stabilize flux. They might also adjust visibility by boosting new providers or highlighting inventory that’s more likely to convert.

Track interaction quality, as well as user counts

More users don’t guarantee better matches. Metrics such as search-to-booking rate, response time, and listings per search session reveal whether liquidity is really improving. Early signs of imbalance that signal the need to intervene might include longer wait times, declining engagement, or rising acquisition cost per transaction.

What tools help operate a two-sided platform effectively?

As volume grows, the complexity for your business increases quickly. Every step must scale across two user types with different needs.

These aspects help with operating a two-sided platform.

Search and discovery

Buyers must find relevant options quickly, even as inventory scales. This calls for a strong search infrastructure with structured metadata, filters, ranking, and thoughtful visibility rules. How listings surface is a contributor to economic outcomes for providers so search is both a technical system and growth factor.

Payments and payouts

Marketplaces depend on multiparty payment flows. Buyers need a straightforward checkout experience, while providers need reliable payouts across currencies and regions. Edge cases such as refunds, partial payments, tipping, and taxes must be predictably managed. Tools like Stripe Connect can handle identity verification, compliance, routing, and split payments so the platform doesn’t have to rebuild its financial system.

Onboarding and verification

Conversion depends on effective onboarding, while safety is ensured through thorough checks. Marketplaces must verify identities, collect tax and banking details, and assess risk, without introducing so much friction that providers give up. Stripe Identity and Connect handle Know Your Customer (KYC) and Know Your Business (KYB) workflows so sellers can get verified and start earning faster.

Risk and support infrastructure

As volume increases, so do disputes, fraud attempts, and edge cases. Manual support alone doesn’t scale. Marketplaces need systems for risk scoring, transaction monitoring, dispute handling, and internal tooling that empower support teams to resolve issues.

What challenges should you prepare for as you scale a two-sided marketplace?

The mechanics that helped the platform function at 10,000 users don’t always hold up at 10 million. Liquidity fragments, quality fluctuates, and regulatory pressure intensifies. These problems require precision.

Here are the challenges to watch for when you scale a two-sided marketplace.

Liquidity fragments as the network expands

Growth is uneven. A surge in one region might outpace supply, new categories might feel empty, or response rates might drop as users spread out. Liquidity varies by city, category, and even time of day. Scaling requires you to monitor where mismatches emerge and correct them quickly through targeted demand campaigns, supply activation, or incentive changes.

Quality becomes harder to enforce

Curation is hard to scale, and with every new provider comes variance. Left unchecked, quality degrades and the buyer’s experience suffers. Mature marketplaces use structured onboarding, eligibility requirements, performance thresholds, and ranking systems that automatically spotlight high-quality providers.

Disintermediation erodes transaction volume

As users build relationships, some will likely try to transact off the platform to avoid fees. Repeat or high-value transactions are especially vulnerable. Durable marketplaces counter this with value, which might be integrated messaging, scheduling, payouts, ratings, and financial protections. The harder it is to replicate your offering off the platform, the lower your churn will be.

Compliance and monetization get more difficult

Entering new markets brings new compliance obligations such as licensing, reporting, identity checks, tax reporting, and labor classification. These requirements scale with the business, not the user. Meanwhile, relying solely on transaction fees becomes risky, which pushes marketplaces to diversify their revenue streams in compliant ways.

What makes a two-sided marketplace strategy durable?

Sustained performance in a marketplace doesn’t come from sticking to what worked at launch. It arises from adapting to dynamics that emerge only after the network grows.

Here’s how to create a sustainable and durable two-sided marketplace strategy.

Liquidity plateaus as scale increases

Adding more users doesn’t always create more matches. A growing supply can introduce noise, while growing demand can reveal thin spots that used to look dense. Mature platforms refine for match relevance, not volume. That usually means making categories more specific, customizing filters, and tuning ranking for high-intent use cases.

Power users reshape network behavior

Over time, a small share of buyers and sellers will drive a large share of transactions. Their needs become more sophisticated. They might want analytics, pricing control, integration points, or preferential access. A general-purpose interface can’t serve them well without alienating others. Durable marketplaces build shared infrastructure with differentiated surfaces so power users get the depth without fragmenting the product.

Margins must expand beyond the take rate

Transaction fees rarely sustain a mature marketplace. Platforms eventually layer on financial tools, managed logistics, advertising, subscriptions, or workflow software. These products deepen engagement and make the marketplace harder to displace.

How Stripe Payments can help

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Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods and Link, a wallet built by Stripe.

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Learn more about how Stripe Payments can power your online and in-person payments or get started today.