How to Build Online Marketplace in 2022: Step by Step Guide
Since 2020 and the pandemic, the rapid development of online shopping and delivery has begun. Many sites have been transformed into online sales platforms. The popularity of such sites is growing, so business representatives are more likely to ask themselves: how to build marketplace on the Internet?
Image courtesy of Fauxels via Pexels
What is a marketplace?
The marketplace performs not just the functions of an online store with online payment and delivery options but also helps establish links between suppliers and buyers. Simply put, it is an online market with its characteristics and rules. Here are their features:
- Increasing profits due to high customer flow
- Extensive audience coverage due to the variety of goods and services
- Multiple monetization options
- Savings on the rent of retail and warehouse space
- Quick resolution of disputes between the seller and the buyer due to a strict regulatory framework
- Expansion of the trading opportunities of the company
The market of marketplaces
The most profitable marketplaces belong to well-known Internet giants like Amazon, Airbnb, and AliExpress. Their success attracts many entrepreneurs who also plan to create a marketplace.
The simple structure and relevance make marketplaces a godsend for anyone starting their journey in e-commerce. According to iBe forecasts, revenues from purchases through marketplace platforms will grow to $7 trillion in the next five years.
What’s your idea?
Before thinking about how to create marketplace, you need to figure out what type it will be. Many factors distinguish online trading platforms from each other.
By type of audience:
- Peer-to-peer: a type that connects product owners with the end customer
- Business-to-customer: in this model, retail companies are directly connected with consumers
- Business-to-business: a type that allows companies to provide goods and services to other companies
By the products:
- The product marketplace is basically the sale of physical goods (like on Amazon and Aliexpress)
- Service marketplace: here, customers are looking for various services (as in Uber, Fiverr, Airbnb)
- Hybrid: marketplaces offering a wide range of goods and services. The best example is Craigslist
You should also choose the type of monetization in advance, as this decision affects the further development process. Marketplace monetization methods:
- Commission for each transaction
- Subscription fee
- Fee for posting a new listing or additional fee for promoting a listing
You can also sell ad space to make money on your website or app.
Benefits of a marketplace for clients
Easy start. To create an average online store, you need considerable money and time. You will have to use the services of marketers, designers, and developers, and filling the catalog and promotion can take more than one month. The cost of creating a store based on a marketplace is significantly lower, and it is enough to allocate a day or two to place goods.
Simple service. Marketplaces guarantee the continuous operation of the service, quickly fix errors and help you understand its function, so it is not necessary to hire a team that will monitor the site around the clock.
Fast promotion. The trading platforms are at the TOPs of search engine results. Therefore, when investing in the development of a marketplace, you should be prepared to allocate an advertising budget for SEO, targeted and contextual advertising. However, as the experience of market players, which will be discussed further, shows, such investments quickly pay off.
Stream of ratings and reviews. Positive reviews are the primary tool that attracts customers, and user traffic helps get these reviews.
The start: research
The purpose of this stage is analytics, setting goals and tasks. This stage includes:
- Determining what the product will be like, what consumer problems it will solve, and its central idea and features
- Defining a niche. You can study the frequency of search queries using SEO tools to do this
- Target audience analysis. At the same time, it is essential to consider that the marketplace has two categories of target audience: sellers and buyers. You need to find out who is in your target audience and conduct research and surveys to understand what product they need
- Analysis of competitors: who they are, their features — which ones to borrow and which ones can be implemented better
Development of a marketplace
Important decisions are made at this step: how the site will look and what will happen when clicking or selecting sections. It is crucial to remember that the site’s design should be discreet, simple, and understandable for the user. And in the minimum functionality, there should be:
- For buyers: a well-thought-out system of filters and search, simple registration, and viewing information about sellers
- For sellers: convenient creation of new offers of goods and services, a system for managing private and public information
- For everyone: technical support service, real-time chats, rating and feedback system, profiles for buyers and sellers (two types of interface), convenient payment system
The design must be created deliberately, in detail, and functionally. But there are two approaches to developing a marketplace. Each is convenient, but you can choose depending on your goals.
You can save money and use a ready-made platform or templates, but this is not the most reliable option. Though it’s easier to implement. Also, you can create a trading platform website from scratch. To help at all stages of development, you will have to attract people from outside. You will need the following professionals:
- UX/UI designer will help ensure that the user has the best experience when working with the marketplace. It is essential to focus not only on beauty but also on convenience
- Frontend and backend or full-stack specialists for software development. Here, the duration depends on the required functionality, its complexity, and the team’s size
- A tester will be needed to fix bugs and ensure the quality of the product right during development
Becoming successful
The development process does not end when you place your product on the market. You still need to maintain and improve your app or website. During testing, you can analyze what your customers like and dislike about your product, which features are outdated, and which features you still need to add.
A good marketplace should reach a broad audience. You need to make your app available on multiple platforms, promote it on social media, and make sure your app is scalable and ready for a large audience.
