December 7, 2023

How to Build Online Marketplace

According to Coresight Research, global revenues of online marketplaces will double by 2024 and reach $40.1 billion.

Written by
Anna Shults
CMO

eCommerce and other branches of sharing economy are one of the most growing markets that are constantly keeping track of new technology achievements. If you’re the representative you know the power that is driven your scope - customer expectations.

The efforts to meet them should be put in from day one and the first point in building long-term engagement is a smooth online experience created to provide a custom approach to every potential client.

That’s why simply building a marketplace platform and arranging it’s proper operation aren’t enough. Your online store should be easy to find, it should attract from the first glimpse and guide a customer to a required item on the intuitive level.

The trends transited from purchase-from-home to on-the-go because of the progress in mobile devices. That’s why another item on a checklist and looks like it’ll be the primary one in the future is to provide a seamless experience for smartphone and tablet users.

Such demands are significantly raising the pressure and making the choice of the development approach more difficult. Adding to that business specifics, budget, time limits and other requirements and even a deep investigation can lead to an impasse.

However, like any complex subject, it’ll appear simpler if to break it down to the blocks and replace assumptions with facts.

Building online store: what to think in advance

Whether you’re extending online your retail business or the online presence is your first step to enter the scope you need to build a marketplace website vision that should be based on required features, technology, load and growth forecast.

Start with outlining the customer path from the search to checkout. The goal is to make it as evident and straightforward as possible to lead even first-time customers without long considerations to the desired destination - a purchase.

Its line depends on the following factors:

Offer characteristics

What are you planning to sell? Digital or physical goods, media, initiatives to follow like crowdfunding or you desire to build service marketplace. Offering kinds affect the number of steps and factors they need to make a decision: similar products, reviews, content, etc.

Buyer type

Whom are you planning to sell? Customers, business or you just will get the opportunity to sell? In other words, you should define if you want to build B2B marketplace, B2C or C2C. That will also impact its orientation on suppliers or buyers.

Target audience

Preferences of potential customers will no less significantly affect the appearance and functionality of an online store than placed offers. You can’t satisfy everyone’s need that’s why you should prioritize.

Store focus

You need to find your niche on the market initially by defining the scope you plan to embrace. You can focus on only one group of offers/customers and ergo choosing a vertical model or its opposite (horizontal) by following the example of Amazon.

Review the pros and cons of both models to consider when you prepare for building a marketplace platform.

Vertical

Pros. Easier to ensure quality, bring value and personalize experience.

Cons. Smaller audience and difficulties concerning the field specifics.

Horizontal

Pros. Cheaper to maintain, simpler to raise the revenue (bigger customer group).

Cons. More difficult to define store identity and survive in the competition.

However, all of these factors can extremely vary within various niches.

Coverage area

What regions you’re planning to provide services to? Even if you don’t plan to build an international platform from the start you should think about it in advance. Each country or sometimes city should have diverse treatment not just language-wise.

Once you’re done with business aspects you can start thinking about implementation.

How to build a marketplace

As before any product development there are several crucial decisions that can't be spontaneously made:

Choice #1: custom marketplace or platform=based

The main dilemma when it comes to eCommerce development. You should pick between building a marketplace from scratch or use templates. In other words, the options are custom and customizable, independency or support-basis, expenses and limits. Etc. The choice should be based on the store specifics and intensity of traffic it should handle.

Choice #2: technology

If you select to run your business on the subscription basis you have a wide range of open-source platforms from Magento to Demandware. If you choose independent operating you have to define the technology stack that will ensure the appropriate web/mobile store performance.

The first decision is simpler since all platforms specifics are available online as well as reviews from actual business owners to answer the question that may appear. The second is hard to make without additional consultancy or even a discovery phase to find out how to build marketplace you have in mind. Better if it’s performed by a potential contractor.

Choice #3: development team

Depending on your resources you should consider building an IT department in-house or outsource the development to the agency or individual. The choice should be dependent on the project size and management possibilities.

The complexity of the project should obviously correlate with the team expertise. Especially when you decide for custom development specialists should not only be able to build eCommerce marketplace but also related solutions and have proven experience in the area. Otherwise, it’ll be hard to ensure that delivery time conforms to your needs.

Choice #4: final requirements

To avoid delays and complications during the implementation it’s better to determine functionality ultimately as well as other specifics like platforms (web/mobile/both). The common features include:

  • User/seller accounts and necessary authentication
  • Category/product search and navigation
  • Reservation/booking/buying procedure
  • Listings, notifications, content presentation
  • Payment and delivery options
  • Offer comparison and recommendations
  • Service evaluation and support systems
  • Security and business-fraud protection

If you decide for multiplatform you should think about the functional difference between the devices. You should also consider that service localization will also have an impact on the development process.

Choice #5: budget and deadlines

Your vision is an important factor but other conditions concerning finances, competition, demand, etc. can stand in the way of success. That’s why you should initially find the balance leastways between funding, available time and requirements.

If you’re building a marketplace startup you should consider MVP development to give your idea test run in a real-life environment without significant investments. Since such model implementation takes less time you can start building the client network faster.

All of your decisions should be based on thorough market research before and empowered by gathered analytics after the release to make timely adjustments. If you’re also launching PWA or mobile version ensure that users have clear access to.it through a website or app stores.

Springs is an awarded provider of eCommerce solutions. We use the latest technology to provide a unique experience for your customers. Contact us to find out development details and a marketplace cost to build your dream store and beneficial collaboration with our agency.

Customer retention is the key

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What are the most relevant factors to consider?

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Don’t overspend on growth marketing without good retention rates

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What’s the ideal customer retention rate?

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Next steps to increase your customer retention

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