Recently, people have become more and more familiar with the idea of a marketplace. The main reason for marketplaces is the ability to purchase the required product or service in a more convenient way. First of all, it takes only minutes to find what you are looking for on the internet. Secondly, marketplaces provide the possibility to find the required item, close to your location at an affordable price. Lastly, the option to get your item delivered to your door is a great deal, especially for large products like furniture or electronic products. However, building a marketplace startup is not an easy task and requires quite a lot of knowledge as well as resources. To start with, we are going to look at what Marketplaces are and how they are different from online stores.
What is a Marketplace Platform?
The main difference between a marketplace and an online store is the ability of independent sellers to list their products or services. There are multiple variations of the platforms available. They differ by the size, the strategy, the products provided, and the way they market themselves. Depending on the purpose and the location, the pricing and technology used are also different. The online stores only provide their own services and goods. They are in charge of the prices, the products themselves, the payment, and the delivery.
A marketplace, on the other hand, only provides a platform for listing the services and a payment platform. Marketplaces can help trade or exchange multiple things. Those can go from physical objects like clothes, furniture, electronic devices, and so on to online services as apps, coupons and more.
How to Create a Marketplace App
Marketplace app development includes tons of investigation and material gathering. It is extremely important to evaluate all the possible risks before starting a project. Contrary to popular belief, a perfect development process doesn’t start with coding. The understanding of the process is an essential part of creating your very own successful application.
- Make a concept of your idea and write it down. First of all, think about what kind of demand is present in your field. It would be great to know what your target group is lacking in their day-to-day life. In order to get this information, you might go through your competitors' reviews, or launch your own survey. There are specialized websites that gather reviews and complaints about various companies.
- As soon as you have all your ideas written down, you can start shaping them into something clearer. Write down everything that comes to your mind, even the craziest things, you never know what can come from them. The next step is to split all your ideas into must-haves, would-likes, and non-essential. This will give you a clear idea of what should be implemented first and what can be added to the app at a later time.
- Now that you have your ideas lined up, it’s time to think about the visual part. Perhaps you have stumbled upon an app that you really liked. Or a few apps, which possess different features you want to have in your application. Write them down as well, as the reference might be really useful for the developers and designers at a later stage. Another thing you might want to do is to write down all the pros and cons of each of these apps. These can later serve as do's and don'ts for the platform.
- Decide on the financial model of your app. This includes both charging your sellers and the buyers. You might want to see which payment methods are the best fit for your location and target group. Mainly, in eCommerce, those would be online payments such as credit cards, PayPal, online wallets, or bank transfers.
- Another thing to develop beforehand is a plan for the refund policy for the end customers. You will need to distinguish your level of responsibility for any misconduct or accidents appearing. Part of the process will also include setting up a fraud control system in order to filter out any fake sellers or scam attempts.
- The next stage is to decide on the company for developing your product. Surf through the web to find companies with good reviews or reliable platforms where you can find a developer or a team. The choice will depend on what kind of technology you have in mind as well as your budget.
The technology which can be used includes some readymade solutions for building a Marketplace, like Drupal, Magento, OpenCart, etc. However, these platforms were initially created for developing online stores and will require special extensions to set up a marketplace. Another option is to use a Software as a Service (SaaS) solution like Sharetribe, Marketplacer, or Near Me. The advantage of this option is the speed in setting everything up. The disadvantage is the lack of the ability to customize features and the looks of your marketplace. The cost of marketplace app development will come to around $30,000 - $100,000+ per month, depending on the platform.
- If you want to create a unique customizable product, you will need to build the application from scratch. The advantages of this option are, of course, having your very own platform with unique features and design. The update of such a product will also be easier, as there is less probability of changes in one part affecting any other. The disadvantages include higher costs and the time required to develop the app.
What Happens After You Settle With a Development Company?
So, you’ve come so far as to find a company that meets your needs. What happens next, where do things go from here? Basically, the first thing you will do with the development company is plan on how to create an online marketplace. There are a few advantages of doing the planning and risk evaluation in advance:
- You can get a professional point of view from the team on the features you have chosen. Perhaps they can point out some inconsistencies or gaps in your planning and advise on better solutions.
- A highly skilled team will advise on how to take care of the security of your product. This includes both the integrity of the idea and code before the release, and a proper fraud management solution after the product is online.
- They can support your platform after the launch date and help you adjust anything that is needed. As they are the ones creating the code, it will be easier for them to modify it.
The cost to create a marketplace app will include the cost of the technology you decide to go with, the payment platform costs, and marketing costs. These are not all parts which distinguish the final pricing of the project, but they influence your budget the most. Another important thing is the location of the development team. A team from Eastern Europe could charge you between $20,000 for a readymade platform app to $40,000 for an app built from scratch. The European and U.S. teams are more expensive and cost around $45,000 - $65,000 (Europe) and $70,000 - $100,000+ (U.S. teams).
Read also: How to Reduce App Development Cost
Success Stories Of Existing Companies
The idea of a marketplace is not really new and there are plenty of companies who have entered the market. Some of them were more successful than the others and managed to find a great pool of customers as well as develop their products with a high level of service.
- Amazon is probably the most popular marketplace platform in existence. They sell almost anything you can imagine and operate in multiple countries across North America, Europe, and Asia.
- Aliexpress is an Asian platform that is very similar to Amazon. They started initially as a B2B project and later developed a P2P platform as well. The products sold on Aliexpress come mainly from China and most of them are of a not extremely good quality. But, the prices are generally cheaper.
- Etsy is an example worth mentioning as their field of operation is different to Amazon or Aliexpress. They operate with handmade and vintage stuff, as well as some uniquely manufactured products.
- Another Etsy-like platform called ArtFire gained popularity among crafty people not so long ago. But, it has quite a few useful options, like searching by categories or listing a wanted item.
- The list wouldn't be complete without mentioning eBay. Since the mid-90s, the platform has been a great option for those who want to shop online. Started as a regular marketplace, eBay later added options for selling personal used items, holding auctions, and renting accommodation.
All in all, the creation of a successful marketplace requires a lot of planning and investigation. Yet, nothing is impossible if you know that what you want to create will have a demand among customers. It is definitely becoming harder to find a sweet spot in the market as so many ideas are popping up in different parts of the world every day. Still, there are fields to be covered and services that can be created. And, once you have an established idea you can use our tips to develop a remarkable product. If you would like to receive some additional information or any assistance with the development, our team is always ready to help! Contact us to get an estimate for your project idea.