The ongoing digital transformation of our daily lives, the COVID-19 pandemic, transition to cashless payments — these and other factors make more and more people prefer shopping online instead of visiting brick-and-mortar stores. In 2021, top online marketplaces, such as Amazon, eBay, and Taobao, sold $3.23 trillion worth of goods, and the figure is forecasted to reach $27.15 trillion by 2027. Even in the face of fierce competition, such market size opens tremendous opportunities for new marketplace platforms to fill a niche and build a loyal customer base. If you wonder how to build a marketplace website, bear in mind that its usability, design, and scalability would largely determine its future success. With over 20 years of experience in creating UX, web & product design solutions, Vide Infra has extensive cross-industrial expertise in the spheres ofeCommerce , real estate, hospitality, and fintech. In the article, we’ll review the main steps of developing an online marketplace, its essential features and share tips on picking the right solution for your concept.
Online marketplaces can be grouped into two primary categories: horizontal ones, such as Amazon or Alibaba, that offer a wide range of goods from multiple vendors, and vertical ones, such as Airbnb or Etsy, focused on specific products or services. The concept of an online marketplace — connecting customers with various sellers — is surely beneficial for buyers who can pick the best offer, and sellers who increase the exposure of their goods and attract new buyers, but it also can be very profitable for the platform’ s owner.
The marketplace owner needs to monitor content, work on attracting users, make sure the platform runs smoothly and that products meet quality requirements, but they don’ t have to do inventory management, rent warehouses, and hire couriers (unless it is a hybrid marketplace). All of this greatly reduces financial risks and improves business flexibility.
There are plenty of revenue streams that can be tapped into by a marketplace owner. Just to name a few, there can be a fixed commission on every sold item, subscription fees, various advertising services, premium features for regular buyers, access to advanced analytics, or extensive customization of product cards for sellers. By combining several of these monetization models, a marketplace owner can effectively increase the platform’s revenue and achieve their business goals.
In general, the building of every marketplace consists of four main stages: research and business analysis; choosing suitable technologies; designing UI and prototypes; development itself; post-release maintenance. Let’ s take a close look at each of them.
First of all, every business idea requires validation. This step involves business analysts and a product manager who thoroughly research the current market situation and competitors, define their product’ s value proposition, and establish target audience and use case scenarios. As a result of this preliminary stage, your team should be able to clearly identify the future marketplace’ s purpose, the size of the potential market, and the audience. For example, when we at Vide Infra took up developing Follow.Art marketplace, the client’ s concept was clear: create a platform for direct interaction between the buyer and the seller. The goal of Follow.Art was to give freedom to artists by becoming a digital intermediary that attracts potential buyers, artists, and galleries for direct business — when the platform receives a payment, the funds are transferred directly to the artist's or gallery’ s account.
When the business research confirms the potential of the marketplace’ s concept, the next task is picking suitable technologies for its implementation. The tech stack for marketplace website development consists of the client-side part, which is what users see when interacting with the platform, and the server-side part, which includes the logic the marketplace operates on and a database to store data and users’ content.
Today, there are plenty of technologies to choose from for building an online marketplace. It is always a good practice to base your choice of technologies on several factors, including:
Today, there are plenty of technologies to choose from for building an online marketplace. It is always a good practice to base your choice of technologies on several factors, including:
Whether the customers would be able to shop your marketplace via a browser, a mobile app, or both defines what technologies should be used for its development. While a website and mobile apps can be built using different frameworks, it is also possible to use a cross-platform approach with such technologies as Flutter to create a marketplace for several platforms from a single codebase.
By using open-source software you get the ability to modify and enhance every aspect of the marketplace architecture, logic, and appearance. However, such freedom comes at the cost of a lengthier and pricier development process, so if a paid ready-made solution satisfies your business goals it can be an optimal choice.
To make the right decision regarding technologies, it always helps to consult skilled and experienced developers. For example, the client behind Follow.Art marketplace initially planned to build the platform using Magento eCommerce platform, a popular but not really flexible or performant solution. Our team suggested using a Symfony PHP framework and built a fully-customized platform that was launched in under 9 months — the end result completely satisfied the client and showed great performance.
The user experience of a marketplace platform plays a decisive role in whether users will have a hard time making a purchase or listing an item, or they will enjoy a simple intuitive process and become your long-term customers. Unique and quality design solutions also help build a brand’s identity and image. This is why an attempt to save budget by using pre-existing templates or hiring inexperienced UX/UI designers can misfire and hurt a project at the launch stage, just when a strong first impression about the product is so important for acquiring initial customers.
TDuring the UX/UI design phase, the development team creates the platform’ s prototype, which ranges from a low-fidelity static one to a hi-fidelity clickable prototype (as Vide Infra’s team did for Follow.Art by designing and programming every interface element in its prototype). The final and most elaborate stage of the initial product ideation phase, an MVP (minimally viable product — a working platform with only essential functions), can be used to conduct research with focus groups and refine the marketplace concept and logic before commencing the full-scale development.
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