How to Calculate CAC for Two-Sided Marketplaces
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- Опубліковано 2 жов 2024
- I teach you how to correctly calculate CAC for two-sided marketplaces incorporating acquisition costs from buyers & sellers.
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We learn about how to calculate customer acquisition costs for two-sided marketplaces.
People very commonly make mistakes with this calculation because they use the CAC of just buyers or just sellers, but don't know how to combine them both into one inclusive CAC.
I'll show you how to correctly calculate marketplace CAC in this short case study tutorial.
Sections:
0:23 marketplaces have acquisition costs for buyers & sellers
0:56 common incorrect marketplace cac calculations
2:03 how to combine buyers and sellers into overall marketplace cac
3:58 calculating buyers needed / seller & sellers needed / buyer
4:57 combining buyer & seller CAC into overall fully-loaded marketplace CAC
By the end of this video, you will feel very comfortable calculating CAC for marketplaces - I guarantee it.
If you have questions - leave a comment below and I'll try to help. Cheers!
#marketplace #cac
Questions? Let me know in the comments happy to discuss.
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Hey Eric.
On the 'seller CAC (per buyer)' calculation, I grasp that the 459 CAC is for all 85 sellers combined:
I need you to please breakdown how you get to individual figures (seller CAC per buyer); what figures did you calculate in order to get to '32'?
Yes, I can help. So let's just zoom out for a second.
So for every transaction, you need a buyer and a seller, and the acquisition costs associated with both of them. So for a seller, we are saying that over their typical lifetime they sell 85 orders each. However on the buyer side, the typical buyer only buys 6 orders over their lifetime. So for one seller to sell 85 orders, you will need to acquire 85/6 = 14.1 buyers to buy those 85 orders. So s *ell* er CAC is the CAC to acquire one single seller $459 + 14.1 * the CAC to acquire each of those buyers (14.1 x $31 = $436).
Now if we instead try to think about the business CAC from the buyer perspective, each buyer only buys 6 orders. So you actually only need one seller selling 85 orders for every 14.1 buyers. So the seller CAC from the buyer perspective is only a tiny fraction of the 85 orders, it is the acquisition of one seller spread over 14.1 buyers. So it is the inverse of 14.1 buyers per seller, it is 1/14 = 0.07 sellers needed per buyer. So 0.07 * $459 gets you to the $32 you asked about.
@@eric_andrews Got it.
you're the man ...
Super
Do you plan on running cohort6 anytime soon? Looks great. Thanks
Yes! Launching in about a month. If you're on the waitlist I will send out an email
@@eric_andrews perfect. I am already on the waitlist.
@@ksoonsoon awesome I'll see you there!