Why do businesses need online marketplaces?

Does every business need an online presence?

Yes.

Based on Digital Commerce 360 statistics, buyers spent $2.67 trillion in top 100 online marketplaces worldwide in 2020.

Every business needs an online marketplace website. Even small local businesses. Omnichannel sales are crucial for both B2B and B2C. Their marketplace presence is an essential part of sales strategy.

Stores continue to be closed. Customers have become accustomed to shopping online when there was no other option. Many prefer the convenience even after official lockdown orders have ceased.

Home sales drive businesses.

How do businesses display their products for sale? They need a simple set of tools to:

• Create digital storefronts.
• Start selling almost immediately.
• Keep or even increase sales.
• Remain upfront and visible to clientele with little effort.
• Keep lines of communication open.

This is especially true for small, local businesses. No need to hire a marketing team or retain a large support team.

Why do customers need online marketplaces?

Customers want:

1) a trusted space for safe purchases

2) timely updates from their favorite businesses

• open all the time – 24/7/365
• customer-friendly delivery terms
• new catalogs and seasonal discounts

Marketplace website development helps connect buyer and seller.

Unlike brick-and-mortar stores, marketplace websites are always open – 24/7/365.

What type of online marketplace website do businesses need?

Users can be divided into three groups:

Users:

• Sellers – want a place to find the right customer for their offer.
• Buyers – want a secure place for purchases from trusted sellers.

Administrators – maintain and make requested changes to the marketplace.

Users. It is crucial to determine your target audience, their roles in the system (buyers, sellers), and what drives them to start using a new service.

There are different types of online marketplace websites. There is no universal platform where everyone sells everything.

Several types of online marketplace websites are possible:

• Based on business type:

  B2B – businesses buy from and sell to other businesses.

  B2C – businesses sell to customers.

  P2P (peer-to-peer) – users can be buyers and sellers at the same time.

• Based on the type of purchase:

  Goods and products – websites offer a variety of products or are niched down and specialize in certain items (e.g., paintings, leather goods).

  Services – sellers offer their expertise in certain professional activities (e.g., language tutoring, wood carving).

• Based on user location, online marketplaces can be divided into:

  Global – solutions target the entire world.

  Regional – marketplace websites serve users from one region (e.g., EU, NA).

  Local – websites operating within a single country, administrative region, city.

• Based on level of sellers:

  Amateur – sporadic sales to get rid of unneeded things.

  Professional – selling as a business.

• Based on marketplace specialization:

  Vertical – serving a specific niche audience within a certain industry.

  Horizontal – catering to the needs of different businesses, products/services from several categories.

  Can different types be mixed?

  Yes, as long as customers can buy what they want from a business they trust. For example, users who want to buy from a local farmer should not end up buying from a big corporation.

  The product owner must be aware that all users have equal, competitive opportunities.

  Hence, the type of online marketplace website depends on the seller/buyer archetypes, their needs, and amount of time they have on learning new features.

IT Craft’s expertise in development of marketplace websites

• 
  

  XPERTyme

  Web platform

  XPERTyme provides a marketplace where users can book video consultations with experts. Users can search among professionals and bill calls from the system.

  Professionals are assured they are paid for their services. Only authorized users or those who have an invitation link can join the conversation. Moreover, professionals can launch their own platform for billable consultations using XPERTyme as a white-label solution.

  Cooperation between XPERTyme and IT Craft started when the startup was looking for a team to enhance source code, complete, and launch an MVP for them. The team focused on core functionality to meet the deadline. Later, its functionality was expanded.

  • JavaScript
  • Docker
  • Websockets
  • Node.js
  • Angular
• 
  

  MyCarrier

  Web platform

  MyCarrier is a Web solution for the logistics industry where users can book and manage less-than-a-truck shipments. They can track, manage, and review—all using one service.

  On one hand, the portal makes it possible for clients to cut shipping costs of small deliveries by choosing the best shipment rate. On the other, logistics companies can optimize their expenses with more effective truckloads.

  The Web development team started working on the project from scratch. The team used the Agile approach to ensure a consistent software development process. App architecture was designed keeping software maintenance in mind. Using third-party services made meeting the tight deadline possible.

  • ASP.NET
  • MongoDB
  • MS SQL
  • AngularJS

How to build an online marketplace website: features and tech side

The idea of an online marketplace assumes there are buyer and seller roles. Plus, administrators responsible for the maintenance of user profiles.

Typical marketplace website development includes the following features:

Must-have features means it would be impossible to build a well-functioning marketplace website without them. They form the User Experience (UX) and make it possible to guide both user groups through the entire sales process.

Nice-to-have features help buyers fine tune their search and get extra bonuses. Sellers need extra options to get more visibility on the platform and increase sales.

Also, these technical parameters help a marketplace thrive. The following technical aspects are critical for building a decent marketplace website:

• Responsive design – all users can open it on desktops, tablets, and smartphones. The website must display equally well on different screens.
• Security – website owners must ensure enhanced security, so that there is no lost or hacked personal or financial data.
• Reliability– online marketplace must work equally well for every user. Hence, it requires regular comprehensive performance testing. Do it or risk losing customers.

These aspects might increase total marketplace website development costs. However, losses due to dissatisfied users cost more.

Possible technical stack for an online marketplace looks like this:

Why should product owners focus on building a marketplace MVP?

Building a marketplace MVP saves on costs—both time and money.

Remember, an MVP is a basic version of the product. It functions, but contains only the essential core feature set.

Amazon is an amazing example of an MVP. It started as an online marketplace for books. Amazon’s principal difference from its competitors? It offered the best choice and the best delivery.

Amazon’s idea proved to be correct and the business scaled fast. Amazon added new features and expanded to new categories. It started as a marketplace website development and gradually grew to be the leading retailer in the US.

An MVP marketplace makes it possible to verify a product idea on a relatively low budget. Product owners don’t order a fully featured solution, because they don’t want to pay for features their users might not actually want or need.

It is easier to turn an MVP into a fully-featured product after you get feedback from real buyers and sellers. You analyze their feedback. You add only what people unanimously want. End result? You save development costs.

Why would it make sense to opt for a Web-based MVP marketplace rather than a mobile app? A website is less expensive to develop and maintain. It can be accessed from all digital devices.

In its turn, a mobile app is the best option for an established marketplace business. In this case, mobile apps are the next step in product evolution. They help buyers and sellers who regularly access the online marketplace from smartphones.

How much does marketplace website development cost?

As noted above, an average marketplace website project takes 900 – 1,600 hours. Usually, it takes 1,520 hours for “standard” functionality. Multiply this number by the company’s hourly rate and you get a rough estimate of marketplace development costs needed to build and launch a specific solution.

Marketplace website development includes several steps with a median workload:

Apart from must-have features, you can have custom-developed killer features. What would you like?

Choose from the following—and more!

• Special algorithms for calculating the best price
• Cashback and discounts
• Location-based promos and notifications
• Detailed filters and ratings
• AI-based recommendations system
• An enhanced anti-fraud system

Developers estimate the above separately. Custom features always have a low degree of predictability.

Businesses should add 15% – 20% to the cost of marketplace development when planning their budget. This is the amount businesses ought to spend on website maintenance. Marketplaces need proper maintenance to remain secure and available 24/7/365 for everyone. Maintenance includes costs of servers, upgrades and updates, third-party subscriptions, and scalability.

Also, marketplace website development costs vary from project to project. Even more, estimates and total development costs might be different due to unexpected challenges. Be prepared for flexible budgeting.

Are you curious about costs to build an online marketplace similar to a well-known product? Below are estimates for renown marketplaces:

• 

  Etsy

  • Catalog
  • Messaging
  • Search and filters
  • Analytics
  • SEO optimization
  • Listings
  • Blogging

  ≈ 1,100 h.
• 

  Letgo

  • Photo editor
  • Posting
  • Payments
  • Geolocation
  • Messaging
  • Search

  ≈ 1,200 h.
• 

  italki

  • Search
  • Messaging
  • Video calls
  • Calendar and progress
  • Feedback
  • Payments
  • Ratings
  • History

  ≈ 1,900 h.
• 

  eBay

  • Catalog
  • Advanced search
  • Criteria refinement
  • Payments
  • Ratings
  • Wish list and favorites
  • eBay bucks

  ≈ 2,300 h.

Top tips on successful development of online marketplace websites

There is plenty of advice on how to build a successful online marketplace.

Follow these points to help you along a smooth path from idea to software release.

• Start small

  You definitely have many options. There are myriad ways to help people start selling on your platform. However, it would be too expensive to implement them all at once. Therefore, it is best to start with an MVP:

  • Focus on your core idea.
  • Launch as soon as possible.
  • Get user feedback.
  • Tailor V2 based on user feedback.

• Find a reliable team

  Marketplace website development costs might look too expensive. However, you should not opt for the cheapest price on the market. There is a reason when nine out of ten other companies quote higher than you. If you hire an inexperienced team incapable of implementing your idea, you end up with a pile of non-functional scrappy source code.

  There is no future for you in doing that.

  Check out our tips and tricks on finding a reliable development team.

• Invest in communication

  Unfortunately, no team can guarantee you results if you do not give them a clear picture of what you want. Success is in the details. Also, you must invest time in regular communication with your team. Explain your ideas and expectations. This helps your team build THE marketplace website you want.

  From IT Craft’s experience, product owners receive the best results when they: 1) participate in both planning and introspection, and 2) give their feedback throughout the software development stage.

• Keep pace with your plans

  It takes time to launch an online marketplace website. It takes time and effort to build a place where people want to buy and sell. A place they are excited to recommend to their colleagues and friends. Do you want such a marketplace? The best time to start is today. Keep doing it regularly until you get the result you dreamed of.

• Be flexible

  It might happen that you launch, get feedback, and it turns out that this is not exactly what users want. Learn from their feedback and introduce new features. Keep trying until you figure it out. If you choose a team of professionals, this will be straightforward. Experienced software development teams build solutions that are easy to extend and easy to manage.

  To sum up, online marketplaces are popular. Their popularity is skyrocketing now. Soon they will be the go-to choice for shoppers. Small and micro businesses need online marketplaces to meet customers who cannot visit their stores. They need a platform where they can easily launch a home page, a catalog, and start promotional activities quickly.

  You can help them make it happen.

Popular questions on marketplace website development:

• How much does it cost to build a marketplace website in 2021?

  Short answer: an online marketplace costs between $13,500 and $176,000.

  Costs for software development keep increasing. The reason is simple. Supply and demand. Large businesses and enterprises hire a huge proportion of developers with the best talents. This heats up the market. Many companies keep raising salaries to retain their top-notch developers. And when salaries go up, hourly rates tend to increase.

  But not everywhere and not with every company.

  IT Craft manages to consistently deliver high quality and still keep marketplace development costs down. How? We are an outsourcing software development provider located in a cost-effective region.

  Top quality, keen minds—for less.

• How do I create an online marketplace website?

  There are two possible ways to build an online marketplace website: you can either use an existing online platform or you can build a marketplace from scratch. The choice depends on your budget and goals. Using an online platform helps you save on design and development of basic features. However, if you want a website with custom functionality, we suggest you choose custom website development.

• How much does it cost to develop a marketplace app?

  The costs to develop a marketplace app depend on the type of app you choose (Web, hybrid, native, or cross-platform). It takes on average 1,520 hours to design and launch a marketplace app. If you already have an online marketplace and an API, you can save on back-end development.

  Please note: if you opt for native app development, you will need two separate apps for iOS and Android (read more about costs of mobile app development).

• How much would it cost to build a website like eBay?

  As above, it takes approximately 1,700 working hours to develop minimum functionality for an eBay-like website. Do the math: calculate developers’ hourly rates x hours needed and you get the amount.

  Pay heed: these numbers will skyrocket if you have custom features on your feature list, want an integration with a specific, less-common third-party service, or expect high load from the beginning.

  Here is a question for you: why do you want to build the next eBay? How will your audience want to use your online marketplace? How will they benefit?

  We suggest you build a marketplace website based on your own idea and design.