Peer-to-peer marketplaces like Etsy, Fiverr, and UpWork are some of the fastest growing businesses in the world. These vertically integrated markets where a single actor is responsible for both creating and selling the item are projected to be worth $355 billion by 2025, according to a study by PricewaterhouseCoopers.
Compared to more traditional marketplaces, long-established signals of quality such as brand name are less relevant in the peer-to-peer space. Instead, sellers in these marketplaces directly tell potential buyers about themselves and the production processes behind their goods and services.
What should these sellers say in their bios and product descriptions? In a new Journal of Marketing study, we find that one of the best things they can mention is that they enjoy their work.
We suspect that many people who choose to sell things through peer-to-peer marketplaces enjoy making their products, yet sellers rarely mention this. For example, in the profiles of 30,000 sellers across various peer-to-peer marketplaces, only about 1% of sellers mentioned production enjoyment. Over 15 experiments, we find consistent evidence that buyers are more interested in, are more likely to choose, and are willing to pay more for products or services that the seller enjoys producing.
We find consistent evidence that buyers are more interested in, are more likely to choose, and are willing to pay more for products or services that the seller enjoys producing.
We also explore how production enjoyment influences the sellers’ decision to price products and services. Ironically, sellers are willing to accept a lower price—and do indeed charge less—for the products and services they enjoy producing. Although sellers also generally associate production enjoyment with higher quality, they do not rely on this inference in their pricing decisions.
In a field study, we test two ads on Facebook for a search engine optimization (SEO) specialist, one that mentioned production enjoyment (“I really enjoy SEO”) and one that was otherwise identical but did not contain these words. We find that small business owners were more likely to click on the ad that mentioned production enjoyment. The positive reactions that buyers have to sellers’ signals of production enjoyment occur over a broad range of jobs. Across our studies, we examine over 100 different jobs and, in all cases, signaling enjoyment increases buyers’ willingness to pay.
Enjoyment vs. Quality
We find that this positive impact occurs because buyers interpret production enjoyment as a signal of a high-quality product or service. After all, someone who really enjoys making jewelry or loves painting probably spends more time and focus on it than others. When buyers learn of this enjoyment, they then presume the product/service is of high quality and are therefore more likely to buy it.
Notably, signaling production enjoyment works best when the production process requires a lot of skill. Automation has made many production processes much easier. In situations where buyers assume the production process is largely automated (or assume the offering does not require much skill overall), production enjoyment does not impact buyers nearly as much.
But even in high-skill contexts, why do sellers charge less for products and services they enjoy producing? Like buyers, sellers also associate production enjoyment with high quality products and services, which should increase prices. We think sellers instead charge lower prices because the joy that they experience during the production process already compensates them for their work. In any case, it seems that production enjoyment carries signals for sellers that lead to different pricing decisions.
Taken together, these findings are somewhat contradictory: sellers charge less money for products and services they enjoy producing, even though buyers are willing to pay more for them.
Lessons for Sellers
- When sellers mention production enjoyment in their profiles and marketing, buyers are more interested in their products and services.
- By comparing production enjoyment to a variety of other established cues of product quality (e.g., production effort) and identifying several moderators that determine the impact of this signal (e.g., required skill), we give sellers a useful framework for when and how to signal production enjoyment.
- Sellers should reconsider their willingness to charge for different products/services. This knowledge can also benefit buyers, who can recognize production enjoyment as a signal of a potential discount, because sellers charge less when they enjoy the production process.
Overall, if you enjoy the work you do, make sure you tell people! They will think you do better work and should be willing to pay you more for it.
Read the Full Study for Complete Details
Source: Anna Paley, Robert W. Smith, Jacob D. Teeny, and Daniel M. Zane, “Production Enjoyment Asymmetrically Impacts Buyers’ Willingness to Pay and Sellers’ Willingness to Charge,” Journal of Marketing.
Go to the Journal of Marketing
Anna Paley is Assistant Professor of Marketing, Tilburg University, The Netherlands.
Robert W. Smith is Associate Professor of Marketing, Tilburg University, The Netherlands.
Jacob D. Teeny is Assistant Professor of Marketing, Northwestern University, USA.
Daniel M. Zane is Associate Professor of Marketing, Lehigh University, USA.