Often, the marketplace does not generate a lot of income at first. During the first year, the marketplace requires investments. This time is a test of your idea. It is excellent if the income comes up so quickly. This means that you have successfully chosen a niche. Otherwise, be patient. It is realistic to estimate the payback period of the marketplace from 1 to 3 years. If the marketplace hasn't taken off in 3 years, something has gone wrong, and you should reconsider your business model.
In addition, you can influence the rate of return on investment in the marketplace. Let's consider how it is work.
Marketplace revenue depends on three factors:
- Traffic (how many visitors come to your website);
- Conversion (how many visitors makes a purchase);
- Order value (what is the average order value or customer lifetime value)
Thus, ROI depends on your income divided by your investment: capital costs and operating expenses.