, where you can find a babysitter, a supplier and a client can have just a single transaction over a few years, which can lead to a few years' cooperation. In this case, transaction frequency is the same for supply and demand side.
Take into account those differences when deciding how many clients you need to bring on a virtual mall website over a given time period.
To balance suppliers and customers, Uber and Airbnb grow their buyers' amount much more intensively than the seller base, while an ecommerce multi-seller platform like Care.com
is supposed to be building supply and demand at the same speed.
Besides, consider the extent to which you can use one supplier's time and if suppliers can process more transactions than they are currently processing.
While an eBay seller can easily extend transaction number, a babysitter can serve only one client at a time.
So, knowing your ecommerce multi-seller marketplace average transaction frequency, and the transaction amount that your ecommerce multi-seller mall sellers can process with no harm to quality, you can provide the optimum demand level for suppliers to be able to fulfill it without leaving customers unsatisfied.
Besides, knowing the highest transaction number an average seller can process, you can flawlessly define the moment when there are too many transactions for the current supply level and its time to acquire more sellers.
Transaction frequency is calculated as follows: Transaction Frequency = Total Number of Transactions / Unique Customers
If you have 800 transactions and 500 unique customers for over a year, your annual transaction frequency number is:Annual transaction frequency: 800 / 500 = 1.6
Besides that, you can measure an average transaction length if it's applicable to your online multi-store marketplace concept.
This will give you an additional lever to balance supply and demand.
Also, it can help to find the connection between transaction length and performance level, to further tweak the supply-demand balance. Airbnb booking lengths of Superhosts and Regular Hosts