Marketability- Definition and Examples

August 25, 2021

Marketability may be applicable to people or things. It applies to people. This is how we make them more attractive to potential clients or employers. A degree can help people increase their marketable skills. They believe that a degree will increase their chances of landing a job or a better one.
It refers to the ability of things to be sold or marketed. Converting the loft into a living space can make your house more marketable. Converting the attic into a living area will make selling your home more accessible.

Factors that affect Marketability

Financial Performance

Financial performance is one of the most important factors that we take into consideration. While we always consider a multi-year trend in our valuations, what matters is the performance of the past 12 months. This performance is what guides our valuation approach, the most popular being the Income Approach.

Sales volume and concentration

Other factors that can affect Marketability include size and concentration of sales. These often go hand in hand. If all else is equal, larger brokerage firms will usually charge more than smaller ones. A more prominent firm has more sales associates, leading to more cash flow and a higher volume of transactions. You don’t have to worry about sales problems if you have a greater volume of transactions and a wider agent pool. Smaller brokerage firms are more likely to lose a top agent/team.

Location and Competition

Other factors to be considered when determining the value are location and competition. Larger metropolitan areas are more likely to receive a premium because they have more inventory and thus more market share. The greater the service area, the higher the competition. There are more buyers if there is more competition.

Available Buyers

It’s not surprising that broad marketability evaluations are affected by the availability of buyers. A firm’s marketable skill is affected by the availability of buyers. The fewer buyers a public company has, the harder it can be to discount its value. Remember that you only have value if someone is willing and able to pay. The most crucial factor is a willingness to pay. We can see buyers’ actual price to purchase brokerage firms by doing what we do in mergers and acquisitions. This information is valuable and helps us determine Fair Market Value.

Types of Marketability

Cost and price

Ability to charge a fair price and still make a profit. The commodity industry is set by the orderly market, so that a lower cost base can be a disadvantage. Premium products are priced relative to perceived quality.

Customers Needs

Customers would buy a product they feel satisfied with because it fulfills their needs.

Functionality and performance

Performance and competitive features compared to other products in the orderly market. Niche products may offer unique features. If customers’ needs and preferences can be met, it may benefit from fewer features.


Your offerings to customers are valued by factors such as reliability and durability, usability, user experience, design, and customer service.


Your ability to reach customers and sell your products and services.

Reputation and Recognition

The ability to build a reputation in a competitive job market.

Examples of Marketability

Cassette tapes, then and now

Cassette tapes were viral in the 1970s and 1980s. They were used to record their walkmans and hi-fi systems as well as to play in their cars.
They are not in demand today. No one wants cassettes. Even if they were only 10 cents each, they would not be sold.
Because CDs have replaced cassettes, Cassettes are no longer in demand. After streaming music from The Cloud, CDs began to disappear.
The Cloud or cloud computing is a computing system where files and other data exist remotely, i.e., in remote computers. The Cloud is the Internet. Today we store more data, including music.

<32>chewing gum, then and now

Other goods have been able to keep their Marketability over time. For example, chewing gum is still a popular product today.

Importance of Marketability

The importance of Marketability is often overlooked in the context of putting options on stocks or derivative instruments. One reason for this is that it can be challenging to determine a public company’s marketable skill, especially after it has been placed on a stock or other financial instrument. Another reason for this is that there is no universal definition for Marketability. One way to determine what is essential in this situation is to look at an appraisal for the underlying stock or another financial instrument.

A common approach to determining Marketability is to assess the liquidity of the underlying asset or financial instrument. This approach assumes that all of the variables involved in the transaction are known at the time of the trade and that the only thing that changes is the value of the underlying asset or instrument. However, it can be difficult to predict these changes, and therefore, some valuations are subjective.

To make matters worse, if the factors that affect liquidity are known at the time of the transaction but become unknown when the contract is made, then the valuation is considered subjective. This definition of Marketability is not consistent with a good purpose of liquidity. Some privately-held companies that are well known have been unable to find a market for their stock due to their inability to find a secondary market, or they have failed to effectively execute a transaction because of their lack of marketability discounts.

To illustrate how important it is to evaluate liquidity and Marketability evaluations, consider a scenario where a private company owns a minority interest in a business. The business could either expand in a profit-producing manner, or else it could fail. For the privately-held companies to succeed, it needs to find a third party to enter into a contract with to expand in a profit-producing way. The sole problem with this scenario is that there is no public relations market for the business.

There would have to be a private placement or exchange of securities for the industry to find a third party that will risk placing a contract with the business. Finding a willing buyer is unlikely that this transaction will ever happen because of the difficulty of finding a willing buyer.

Advantages of Marketability

The advantages of Marketability are many, and they are especially true when it comes to commercial property. You do not want your tenants walking into a building that feels like an unstable building or smells like urine because this is a surefire way to lose them as soon as they get on the property. An installation must be structurally sound and must be constructed per local code. These things can all be checked and verified before any tenant ever walks into the building, so there is no absolve when it comes to marketable skills.

The next advantage of Marketability is that you can quickly sell the property if you find that there is no potential there. The fact that the property has marketable skills is already a benefit to you because there is money in the business. This means that your expenses for advertising and marketing are lower than most properties would have. Also, there is less risk involved with a commercial property because you do not have to worry about building upkeep and pest control like you would with residential property.

This all interprets into more profit for you.
Yet another advantage of Marketability is that you do not have to deal with all of the extra insurance expenses that go along with other commercial property types. This can save a considerable amount of money in the long run, which is one of the primary considerations for running a business.

There is also the benefit factor of not dealing with all the paperwork and bureaucracy that often goes along with leasing a commercial property. You will have to complete the obligatory forms, pay the requisite fees, and you will be legally allowed to rent the property. All of these advantages of Marketability mean that there is absolutely no reason you should not take advantage of them and start looking at properties that have Marketability.

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