How to create a marketplace?

Online commerce can be divided into three main sectors: online stores, various management, and data distribution services such as SaaS, PaaS, and large trading platforms — marketplaces. The latter can combine in one place both online stores and various consumer services.

Today, thousands of marketplaces are already operating around the world, and experts in the field of online commerce predict that the market for sites will only grow due to the continually increasing demand for online shopping, the globalization of Internet technologies, and other factors.

This article shares Sannacode’s experience: how much does it cost to create your marketplace and how to go from idea to implementation without nerves and loss of money.

What is the marketplace?

Without going into theory, we can say that a marketplace is a trading platform that sells goods from other sellers.

There are two main models for building marketplaces: selling on behalf of the marketplace or a platform with attracted sellers when each store sells goods on its behalf but adheres to the site’s creators’ general rules.

The main features of a marketplace are:

1. availability of attracted sellers;
2. monetization through commissions, subscription fees, or a percentage of sellers’ sales;
3. the ability to sell the same goods by different sellers;
4. hawking not only goods but also services: for example, ordering food, selling air tickets, etc .;
5. transparent and regulated rules of payment, delivery of goods, dispute resolution.
6. in other words, marketplaces are civilized online trading platforms with their own rules of the game that clearly regulate and protect the activity of sellers and buyers.

Marketplace implementation models

1. Price aggregator provides a platform for manufacturers, ranking them by filters, with a further transition to the partner’s website. A classic example is Yandex Market, although recently, it wants to move to the second category.
2. Online Hypermarket provides a platform for manufacturers under the parent site brand. The order of goods is made without going to third-party sites. Classic example — Amazon.com
3. B2B Marketplace (closed) is a closed marketplace where large wholesalers post their prices and availability, and retail stores and small wholesale buyers place orders for subsequent resale. As a rule, such marketplaces cover one product niche.
4. B2B Marketplace (open) is a project available to all wholesale buyers that covers any product sections. First of all, manufacturers of goods are exhibited there. A classic example of this type is Alibaba.com.
5. В2С MarketPlace is a retail marketplace for end customers, the most classic example of such a project. The core of such a project, not a large part, is the products of the marketplace itself, and most of the products are products of small, medium, and large wholesalers and manufacturers. Amazon.com invented this scheme. It is also the largest classic marketplace.

Marketplace features

Each marketplace will have its own features depending on the business model, audience, and goals. However, there are standard modules that characterize all marketplaces:

1. authorization and registration module,
2. data and role management module,
3. administration module,
4. search module,
5. product or service management module,
6. social interaction module,
7. notification module,
8. payment module.

Authorization and registration module

Usually, it has standard authorization via email and password. It can be extended by authorization via social networks or two-factor authentication via SMS or other sources. When registering, the mail is usually confirmed with a verification code to the specified email. Accordingly, there is a page where the sent code is checked — password recovery page and functionality.

Data and role management module

Creation and editing of personal and company data, validation of entered data, uploading files and images, creating roles, and restricting access rights.

Administration module

You manage all data in the system, viewing transactions, resolving disputes, analytics, and statistics.

Search module

Search by fields, filtering, and sorting data, limiting data output, optimization, and acceleration.

Product or service management module

Adding, editing, and deleting goods and services with a different set of fields. Data categorization. Management of the state of goods and services.

Social interaction module

Create chats for communication between suppliers and consumers, the ability to like or dislike, leave reviews and comments, and create ratings.

Notification module

Creation of both instant notifications and sending email or SMS, creating push notifications.

Payment module

Card binding and integration with payment systems, viewing and managing transactions, payment history, payment cancellation.

Conclusion

If you decide to create a marketplace, then the first thing to do and what you shouldn’t spare money on is to conduct analytics, choose the right tools and choose a team interested in improving your business. This will help save a decent amount because you don’t have to redo the project several times.

You can contact the Sannacode team, and we will help you with the implementation of your idea, from analytics and business model building to development and marketing.

The cost of developing a marketplace is quite high, but you need to know that at least the same amount, or even more, you will need to spend on marketing, advertising, and customer acquisition. No matter how cool and convenient a trading platform you make, it doesn’t make sense without clients.