Business and Revenue Model Of On-demand Service Marketplace

Business and Revenue Model Of On-demand Service Marketplace

Views - 8209
Comments - 11

Post Updated On: 27th December, 2023

Technology companies have been busy lately developing software to hire professionals online. Cab booking services and food ordering portals are some of the popular examples. Most recent are online marketplaces to hire local professionals for jobs like house painting, home cleaning, plumbing, and more. These marketplaces are referred to as on-demand services marketplaces.

In no time, these on-demand service marketplaces with unique features have made their mark by gaining huge popularity and building a reasonably good customer base. Seeing its rising popularity, FATbit’s team of analysts conducted thorough research of the growing industry and gathered critical business insights for entrepreneurs planning to launch a similar portal.

Business Flow of an On-demand Services Marketplace

An on-demand service platform connects service seekers and providers. The flow of such a marketplace is illustrated below:

Business Flow - On-demand Services Marketplace

Possible Revenue Streams of an On-demand Services Business

There are several revenue streams of an on-demand services business. However, zeroing in on a couple of them which are sustainable and help businesses scale is essential. Some of the possible revenue streams are explained below:

• Commission from Each Transaction
• Lead Based
• Subscription for the Users to Use Marketplace Services
• Sponsored Profiles for Promotion and More Visibility on the Page
• 3rd Party Ads Once There is Enough Traffic & User Base on the Marketplace

Potential Niches in the On-demand Services Industry

The on-demand services industry is further divided into various niches. On a marketplace platform, you can aggregate services from each of these niches. Alternatively, depending on the market demand in your targeted geographic region, you can launch a dedicated on-demand service platform for a particular niche as well.


Electricians can increase their sales by listing their services on an on-demand electrical services platform and delivering their services to customer homes and business locations.

Plumbing Services

To save clients running around a plumber in their neighborhood, an on-demand plumbing services platform helps them find and book a plumber in minutes.


As with other on-demand services, an HVAC services platform connects HVAC services providers to customers looking for them. Customers can find as well as book a visit from HVAC services providers. 

Pest Control Services

Every homeowner takes regular pesticide control as pests pose real threats to health and damage property. An on-demand pest control services platform acts as a one-stop destination for homeowners to find all sorts of pest control services.

Cleaning Services

On-demand cleaning services for the ones who struggle hard to keep their house clean and hire maids or housekeepers for the same. 

Appliance Repair Services

Customers prefer booking and delivery of services at their doorstep which has brought a lot of popularity to on-demand appliance repair services. 

Landscaping Services

Keeping the yard, lawn, and landscaping maintained has never been so easy with the fleet of local and professional on-demand landscaping services. 

Locksmith Services

On-demand professional locksmith services are in great demand due to residential locks, commercial locks, key duplication, automotive key programming, and lock for security surveillance.

Roofing Services

On-demand roofing services are getting popular for a variety of uses like emergency services, snow removal, small scope construction projects, warranty program, etc.

Top On-demand Services Marketplaces

Company Location Founded In Funding
The HomeDepot Atlanta, GA 1978 NA
HomeAdvisor Denver, CO 1998 NA
AirTasker Sydney, Australia 2012 $26.5M
Task Easy United States 2013 $46.2M
Handy New York, NY 2012 $110.7M
TaskRabbit San Francisco, California 2008 $13M

Things to Consider While Starting an On-demand Services Business

While the glaring success of the on-demand market worked for many businesses, the businesses that failed are also extremely huge in number. Below given are a few factors to consider when building your on-demand business and making it a success.

Market Expansion

On-demand businesses today refrain from expanding their market reach and end up being limited to a pool of loyal customers. The problem arises as soon as a new competitor with huge capital enters the market and starts expanding. The chances of them getting out of the business increase with the increasing number of competitors.

Alternate Financing Options in Place

It is extremely unwise to be dependent on funding to launch and sustain your on-demand business. No matter how well-propositioned your business model is, there is no guarantee of your on-demand business getting funded. It is better if the entrepreneurs look into alternative financing options like partner financing, invoice advances, crowdfunding, marketplace lending, revenue-based financing, etc., and not remain limited to venture capital.

Focus on Customers’ Needs

As many successful on-demand businesses have set the benchmark high, the modern customers’ expectations have also risen. Some key traits are:

  • 24*7 availability
  • Personalized experience
  • Quick turnaround time
  • Cater to the exact customer needs

Take a look at these points and identify which of these relate to your business. These points can highlight where your business can improve the customer experience by focusing on the needs of your customers.

Ready to Launch your On-Demand Service Platform?

Trends Transforming the On-demand Services Industry

Here is a look at trends that are being formed and lay the foundation for the future of the on-demand services industry.

Adoption in a Wide Range of Industries

As people are getting used to on-demand service platform, they are also looking to take advantage of more on-demand services in other industries. Moreover, becoming more ubiquitous signifies branching out to serve new industries and sectors. As a result, the on-demand economy is going to see an increase in its workforce in the coming years.

Skilled and Qualified Service Providers

So far, most of the on-demand services like cleaning, ride-hailing, food delivery, etc. did not require a special skill set or expertise, However, the growing number of service providers and niches will also require skilled and qualified service providers with relevant experience to join the workforce. Some of the examples are medicine and health care services that are becoming popular and require service providers to be skilled and experienced.

Quality Services at Consumer’s Convenience

As the number of businesses and service providers is increasing in numbers and competition is rising every day, service providers need to offer quality services at reasonable prices. The hike in the number of service providers has forced them to offer the premium services at customers’ convenience or lose a potential customer.

Necessary Background Checks

As the penetration of on-demand services increases and more people face legal issues, there will be an increased demand for background checks. Customers are hesitant to use the services if there are no background checks for the service providers. On-demand business owners should consider this to build and maintain the trust of the customers.

Business Intelligence and Analytics

As the competition in the on-demand services industry is roaring high, businesses will not be able to thrive without Data Mining and Business Analytics. These can give valuable insights into the services which are in demand. Business intelligence and analytics will help to find out the demographics of the users, whether the marketing strategies are performing well or not, and what can be done in order to streamline the business.

Building an On-demand Services Marketplace

Launching an On-demand marketplace platform is an opportunity to tap into this growing industry, however, rushing to launch a platform as fast as possible with a vague idea about the target market and business model can sink your business before it even establishes. A well-thought business strategy is a solid foundation, not only for the business but for the technical aspect as well.

Here is what you need to do when building an on-demand services marketplace.

Choose a Niche

The untapped potential of your business can go far beyond the expectations with the niches we mentioned above. Keep multiple options open for your business and refrain from the niches where other players are already doing good. Find a unique niche that actually helps the users make their lives better.

Define Customers’ Needs

While exploring the market, find out answers to a couple of questions:

  • What is the audience’s age and social status?
  • What are their daily challenges?
  • How can your business help them solve their problems?
  • What are the expectations of service providers?

Build a user persona that can greatly help you define your potential customer’s needs and enable you to fulfill them.

Analyze Market Competitors

Prepare a list of your competitors, irrespective of the fact whether they work in a similar niche or have a slightly different market. Take a closer look at their business, and try to find out insights into their business, like:

  • Specialization
  • USPs
  • Weaknesses

Analyzing all these factors, you will be able to detect the elements their business is missing. You can then use this missing element to strengthen your business and make your business one of a kind.

Pick a Monetization Strategy

Finding the right pricing strategy is the top priority for any business. Your pricing strategy should not seem suspicious or disadvantageous for users. The most hazardous strategy is pricing the customers too high which can make you incapable of meeting the competition and undermine all the efforts taken to build the business. They should clearly realize what they are getting against their money. 

Decide on the Features

An on-demand app service delivery website will need to have different features for all the different users – admin, service provider, and customer. Have a thorough research of your market and audience and then decide on the features you will be needing in your website.

Build a Fully-featured On-demand Services Marketplace

Attracting Customers for Your On-demand Services Marketplace

Studies and reports clearly portray that the on-demand services market is expanding and there is an unconfined inclination towards this economy. However, not many businesses make it big in the market and their efforts go in vain. The primary reason is the lack of proper marketing.

Rather than going rounds across the problem, let’s discuss how on-demand businesses can attract more customers and increase their revenue.

Strategize Marketing Plan

Building an on-demand platform is not all; businesses need to have a proper strategized marketing funnel to create demand and entice customers. A lot of research is required keeping in mind the target audience and the services being offered before actually launching an on-demand services marketplace.

Gain Trust of Customers

Building a better bond with the audience is always recommended in a business. Organizing webinars, interacting with the audience through different mediums, and sharing sales videos can help businesses gain the trust of and build the authority of their on-demand business.

Conduct Research/Surveys

Proper knowledge of the market is vital in any business, and on-demand businesses need it more than any other. It is essential to know the difficulties faced by the potential customers, their requirements, and how can your services help them in solving their problems. On-demand businesses need to carry out these surveys to be on the right track, or else the competitors can grab their potential customers.

Showcase Client Testimonials

Every new customer has this psyche of being doubtful towards a new company. However, if they see another customer sharing positive feedback, they are easily convinced of the services/products. On-demand businesses need to make sure they allow their customers to share their experience (video, picture, written) which will serve as a testimony of their quality and attract new customers.

Offer Lucrative Discounts

Another effective strategy to gain more customers is to provide enticing offers and discounts which can attract existing as well as new customers. The only thing to consider while offering discounts is that these offers should be realistic and do not cost much, or else they can backfire.

Build an On-demand Services Marketplace with Yo!Gigs

For a remarkable amount of time, Yo!Gigs has been helping entrepreneurs to build an on-demand services marketplace. The software comes with a multitude of features to aid in the development of a rich services marketplace. The software is readymade and reasonably priced for building a services marketplace.

An on-demand services marketplace armed with the features Yo!Gigs offers is undoubtedly going to rule the market.


Q1. What is the best solution to start an on-demand service marketplace platform?

Ans: For on-demand marketplace operations, Yo!Gigs is a highly recommended solution. It comes with a wide range of essential features to simplify all types of on-demand service operations. Furthermore, it also supports direct hiring, job posting, and bidding to provide customers with diverse hiring options. 

To ensure quality services and establish trust in consumers, the marketplace owner gets the background checklist and verification badge features. For managing service providers, Yo!Gigs has modules such as user management, commission management, withdrawal settings, eWallet, advance deposit, etc.

To view Yo!Gigs in action, schedule a free personalized one-on-one demo session here.

Q2. What is the cost of developing an on-demand service marketplace platform?

Ans: The cost of developing an on-demand service marketplace varies on the development method. Via the custom development method, you would be paying between $25-100 per hour to develop your marketplace platform. If it takes 1000 hours to develop the marketplace, then your overall custom development cost will be somewhere between $25,000 – $100,000. On the other hand, by using a readymade solution, you can reduce the overall cost to $1000-$5000. This is possible as the solution has been already developed by the software provider and you are only purchasing a license for the software.

Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.

Leave a Comment

Reload Image
Comments (11)

Hey! Do you use Twitter? I’d like to follow you if that would
be ok. I’m undoubtedly enjoying your blog and look forward to new

FATbit Chef Post author


We are glad that you are enjoying our blog posts. You can follow us on twitter @FATbit_Tech


You need to take part in a contest for one of the finest blogs on the internet.

I am going to recommend this website!


I will right away clutch your rss feed as I can’t in finding your
email subscription link or newsletter service.
Do you have any? Please let me know so that I may subscribe.

FATbit Chef Post author

Thanks Marietta for appreciating this article and bookmarking. We will publish more interesting articles in the future.


Can you please decode the business plan or Zimmber (android base app) and Kind regards, kartik mishra

FATbit Chef Post author

Hello Garrett,

Our team will contact you soon regarding Housecall site/App.

Watch out for our mail.


chuyen nha tron goi ha noi

If you want to increase your familiarity just keep visiting
this web page and be updated with the most up-to-date news posted