How to Build a Marketplace Website and make it successful

In the near future, we are expecting to witness an enormous increase in the number of marketplaces, especially since the eCommerce sphere is becoming even more profitable year over year. A recent Statista report shows us that Amazon’s annual income grows annually, and even more people want to take a bite of this cake, since owning an eCommerce marketplace is a very profitable business.

 

Even with developed technologies, however, building a marketplace website is not a simple task. To be a successful two-sided platform entrepreneur you need something more than just building a marketplace website. In this article, you will find great tips from our eCommerce team on how to make a marketplace and the cost to develop a custom two-sided platform.

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What You Need to Know Before Hiring a Team for Marketplace Development

First of all, let’s clarify what, in fact, a marketplace is. A marketplace is a two-sided platform, where shoppers can buy goods from different retailers. A platform is a mediator between buyers and sellers. So, why they are so popular among customers? Because they provides shoppers with countless products together with convenient payment methods. We can say the same about retailers. They place goods in one place, and there is no need to spend marketing budget on ads because two-sided platforms already have their customers. For that, marketplaces help new businesses to grow and enhance an even wider target audience.

We can divide marketplaces into:

  • Products and goods (Etsy, eBay, AliExpress, Amazon)
  • Services (Couchsurfing, Airbnb, Uber)
  • Media (TravMedia IMM)
  • Crowdfunding (Indiegogo, Kickstarter)
  • And other marketplaces, like social networks.

 

Related story: How to Create a Successful Two-Sided Marketplace

Now, when you understand the main definition and main marketplace categories, you begin to realize what type of marketplace you need to build. Now, it’s time to learn more about the most important eCommerce marketplace features.

Top Features to Include in a Marketplace Website Development Process

Many people do not even know some of the hidden steps when it comes to the process of marketplace development; however, some of them are vital for providing the platform with appropriate work.

When developing a website or an online shop, the Dinarys team uses the MVP approach, which we find useful, especially in terms of two-sided platform development. At this stage, you should think about the main features of your platform.

 

Below, you can find a list of the most common eCommerce marketplace features that you should consider and add to your future feature list. We also emphasize that development cost is based on the number of features you want to implement.

User account

When answering the question of how to set up a marketplace platform, the first thing you should think about is the role of user. For instance, most marketplaces have both merchants and shoppers. For that, their accounts should be different because they perform different actions under each. The retailer cabinet should include a product catalog to add new products and manage them, more information about the company, payment methods, delivery terms and other fields to make the sales funnel more seamless. At the same time, the shopper account should be convenient to use. At this stage, you can include such features as quick log in via social networks, shopping cart, payment details, shipping address and other information that could be helpful during the checkout process.

 

Messages

When customers are interested in products, they often want to receive more information. Therefore, the platform should provide users with messaging options for seamless communication.

Bookings and wish lists

These features give shoppers additional comfort and the ability to book products or services, or to add them to a wish list, enabling retailers to plan for future product supply. That way, both retailers and customers will receive benefit from it.

Payment gateway

When retailers look for information about creating a platform, they often see how important a safe payment process is. To gain the marketplace users’ trust, your payment system should be both convenient and transparent. Take into account that most customers like to see their previous purchases and transaction history. To make your marketplace even more popular, you can add several options to pay for goods and services, like PayPal, Stripe, bank transfer or others.

 

Related story: How to Integrate a Payment Gateway in Your eCommerce Website

Product catalog

The product catalog in the marketplace should include such perks as categories, search, filters, sizes and more, to make the search process more convenient. If it is hard for customers to find the right product, they will never use your marketplace platform.

Customer reviews

Another useful feature for a two-sided marketplace is a customer review field, where shoppers can share their experience with a particular product from a particular seller.

 

Related story: What is the best eCommerce platform for wholesale?

 

With this in mind, let’s move towards searching for the answer on how to build a marketplace website. Below you will find even more useful information on:

  • How to create a marketplace website,
  • The cost of marketplace development, and
  • Alternative, budget-saving methods for creating your personal marketplace platform.

Step by Step Marketplace Website Design Process

There is no single answer on how to make a marketplace website, because the development milestones and the budget are always business specific. Still, there are common steps that every marketplace development process consists of, including the process of searching for the best platform and creating a marketplace MVP (minimum variable product).

1.    Market research

If you want to own a successful and relevant marketplace, the first thing to do is to conduct market research. Here, at Dinarys, we understand how busy retailers are, so we offer a free industry and competitor analysis to create a vision of the project for our customers. We analyze the best two-sided platform features of industry-relevant competitors and have come up with a feature list to estimate the project scope.

 

Price: Some eCommerce development agencies want this stage to be paid but, for some clients, the Dinarys team provide this service for free. To receive a quote, simply fill in our contact form.

2.    Choosing the right business model

For this step, future e-commerce platform owners should gather information about business models of current marketplaces and choose the one that fits the best. Remember, if your commission is too high, online retailers will never use your platform.  

3.    Selecting the right eCommerce platform

This is the most important stage, because it will influence the development total and your eCommerce business. We recommend finding the best platform on the base of particular business needs. You can choose from a number of current eCommerce platforms, like Magento. This allows you to start your business quickly, reduce implementation times, increase the efficiency and reduce operation costs. If no platforms satisfy your business needs, your choice is to move ahead with custom marketplace development, which is a costly option.

 

Price: Since there are many options, we will share the price of the most popular platforms used for marketplace development.

Magento

The Magento Community Edition is free but, to turn a website into a marketplace, you will need Multi Vendor Marketplace ($349.00) or Marketplace Multi Vendor ($459.00) modules. Plus, you will need a development team to install and maintain modules.

WordPress

Despite the fact that some agencies recommend the free WordPress platform as a solution for two-sided platform, we actually think that this is a very bad idea.

Sharetribe

This platform offers flexible pricing, from $79.00 to $239.00 per month, providing users with the necessary tool set for successful e-commerce platform businesses.

CS-Cart

CS-Cart Multi Vendor Marketplace is an add-on cost of about $399.00, but let’s not forget about installation fees and the cost of website maintenance by their eCommerce team, which may vary.

4.    Minimum variable product for marketplace project

When working with a development team on a custom marketplace project, you should discuss what features an MVP should include. In terms of working on such a massive project as custom marketplace, an MVP is the best option to demonstrate your platform idea to potential customers and to collect their feedback. Then, the development team will analyze it and adjust the development process according to the new data.

Price: The price of your marketplace MVP depends on your eCommerce solution, your team and the number of features you want to implement.

Related story: How Much Does an eCommerce Website Cost in 2018?

 

Now you know the main stages of designing a marketplace. Since the team has experience with Magneto, we also have decided to add a simple guide on how to create a marketplace platform using this eCommerce solution.

 

Related story: How to Create an Ecommerce Website in Magento?

Five steps toward creating a marketplace on the Magento platform

An eCommerce marketplace can be developed applying different CMS; however, Dinarys prefer Magneto. Let us tell you why.

  • First, this is the most widely used eCommerce platform.
  • Then, Magento has numerous third-party tools and modules, together with regular updates.
  • CMS is also easy to use and customize.

1.    Decide on a Magento plan

The platform has several plans for different businesses. On the base of your business needs and future volume of marketplace traffic, you can choose the Community Edition, which is totally free, or Magento Enterprise Edition which costs about $16,000 per year.

 

2.    Professional development team

At this stage, you need to hire an eCommerce team with great experience in both Magento and marketplace development, to make your own marketplace website. You can find a local agency, or hire an outsourcing team.

3.    Feature list and Magento extensions

As we said before, your future multi-vendor platform should have at least some basic marketplace features. You can discuss the feature list with the development team so they can find and set up necessary modules from the Magento Marketplace.

If you have not found the right solution for you, you can discuss the custom Magento module or extension development with the team.

 

Related story: The Benefits of Magento Custom Module Development

4.    Magento Marketplace performance

Most website shoppers hate slow websites. For this reason, your future Magento marketplace should load in two seconds and be glitch-free. Emphasize on these important factors when working with your development team, so they can find the right solution for your marketplace.

5.    Launching your marketplace

Once the team has done all their tests and configured all modules, your eCommerce marketplace will be ready to launch. The Dinarys team recommends future online retailers double-check their customer journey from start to finish, to avoid sloppy errors. Now you can start your marketing campaign and attract retailers and buyers to your platform.  

Related story: How Ecommerce Business Can Increase Customer Lifetime Value?

Marketplace website costs

If you decided to hire an eCommerce team for custom marketplace platform development, consider that it is a hard task to calculate the total price of the project.

Related story: 7 B2B eCommerce Payment Systems

Dinarys offers an estimate for custom marketplace development that includes basic features without bells and whistles. In the table below, you will get a better understanding of how much it costs to develop a marketplace.

 

Features

Amount of Story Points

Time

Cost

User Experience & User Interface

4 Story Points

34 hours

$1,071

Database

Web Application Design

Deployment Scripts

3 Story Points

25.5 hours

$803

Authorization and Security

8 Story Points

68 hours

$2,142

User Profiles

5 Story Points

42.5 hours

$1,339

Functionality for Publishers

4 Story Points

34 hours

$1,071

Managing Listings

19 Story Points

161.5 hours

$5,087

Booking Process

8 Story Points

68 hours

$2,142

Payments

5 Story Points

42.5 hours

$1,339

Payout

5 story points

42.5 hours

$1,339

Bookings

5 story points

42.5 hours

$1,339

Reviews & Ratings

8 Story Points

68 hours

$2,142

Notifications

3 Story Points

25.5 hours

$803

Browser Сontent

10 Story Points

85 hours

$2,677

 

 

To answer the question “what is the cost to develop a custom marketplace?”, we should know more about your business, your target audience, industry and your budget.

As we said above, there are several options for marketplace development that include ready-made CMS or a custom developed platform. The price also depends on the feature list you want to implement, though custom marketplace development is not always cheap or quick.

When estimating the budget for your custom developed project, also take into account such expenditures as:

  • Hosting costs
  • UI/UX design development
  • Front and backend development
  • QA – manual and automation tests
  • Marketplace technical support

If you need more information about the development of a marketplace, the best CMS, custom marketplace development or other eCommerce related questions, do not hesitate to fill in our contact form. The Dinarys team is always glad to help online retailers achieve success in this sphere.  

 

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