July 10, 2019

Stripe Connect and Spree Commerce for marketplace development projects: how to build vendor trust and incentivize them to join?

Two-sided or multi-vendor marketplaces face an early chicken and egg problem. Without vendors, suppliers, or service providers, there’s no value for the customers. But without the customers, vendors don’t see a point in joining the marketplace. This problem is usually solved by building vendor trust and incentivizing the vendors to join the marketplace, which is the first step to getting market traction. And what do the vendors really want? Stripe says: confidence in getting paid asap. Spree Commerce support that vision with a Stripe Connect integration.

Stripe offers several services which make up a nice ecosystem for building a marketplace that inspires vendor trust but also gives the marketplace operator a lot of control and safety measures:

quick vendor onboarding and verification – get recipients set up using Stripe Connect which helps you collect bank information, verify IDs, and offers underwriting and KYC support,
vendor payouts dashboard for greater transparency – recipients can access Stripe’s pre-built dashboard to view their payout information, or you can create a customized experience for them
quick vendor payouts – allowing vendors to transfer earnings to their bank account

This way, sellers, service providers, or any other payment recipients may feel confident in the marketplace to make the payouts as expected and hopefully faster than any competitor. Spree Commerce works well with Stripe Connect for vendor payouts.

Stripe Connect marketplace success stories include:

Turo uses Stripe to collect payments from car renters and pay out hosts.
Universe helps event planners sell tickets and accept payments online and in-person.
DoorDash works with Stripe to accept payments, split funds, and pay out to couriers and restaurants.

Perhaps the biggest success story of all is Lyft which worked with Stripe to build their Express Pay, allowing their drivers to decide when they want to get paid—typically within a few hours instead of weekly. As a result, in 6 months, over 40% of all payouts on Lyft were done over Express Pay and Lyft was able to attract more drivers onto their marketplace.

Among other complementary Stripe services, which integrate with Spree well, are:

Stripe Billing – for adding a subscriptions model to build loyalty and recurring revenue streams
Stripe Terminal – for accepting in-person payments with a customized point-of-sale system
Stripe Radar – for fraud prevention and instant seller identity verification
Stripe Issuing – for providing your drivers, couriers, or other recipients with programmatically controlled cards to purchase supplies or pay for expenses

Getting traction for your marketplace usually starts with offering great value to end-customers but for that you need a motivated vendor base. It’s worth exploring how Stripe and Spree Commerce can help you achive just that.

Feel free to drop us a line and discuss your marketplace requirements.