Should Depop prioritize increasing seller listings or improving buyer search functionality?

Introduction

The trade-off between increasing seller listings and improving buyer search functionality is a critical decision for Depop's product strategy. This scenario highlights the tension between supply-side growth and demand-side user experience. I'll analyze this trade-off by examining its impact on Depop's ecosystem, proposing experiments, and providing a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming Depop is facing challenges with marketplace liquidity. Could you share more about the current ratio of buyers to sellers and the average time to sell an item?

Why it matters: Helps understand the urgency of each option Expected answer: Imbalance favoring buyers, with longer sell times Impact: Would lean towards increasing seller listings if severe

• Business Context: Based on Depop's revenue model, I'm thinking commissions are a key driver. How does our take rate compare to competitors, and are we considering any changes?

Why it matters: Aligns solution with revenue strategy Expected answer: Competitive take rate, no immediate plans to change Impact: Would focus on volume growth rather than margin optimization

• User Impact: Looking at user behavior, I'm curious about our buyer retention rates. Can you share how often buyers return to make purchases, and if there's a correlation with search satisfaction?

Why it matters: Identifies potential growth levers Expected answer: Room for improvement in repeat purchases Impact: Would prioritize search functionality if retention is low

• Technical: Considering our current architecture, I'm wondering about the scalability of our search infrastructure. What's our current search response time, and how much headroom do we have?

Why it matters: Assesses feasibility of search improvements Expected answer: Some latency issues, but room for optimization Impact: Would influence the complexity and timeline of search improvements

• Resource: Given the potential scope of these initiatives, I'm thinking about team capacity. How are our product and engineering teams currently allocated between supply and demand-side projects?

Why it matters: Determines feasibility of parallel efforts Expected answer: Roughly even split, with some flexibility Impact: Would inform whether we can pursue both options simultaneously or need to choose