How To Create a Marketplace App – A Sequential Tutorial

Nowadays, marketplace applications are a rising trend, mainly with the supremacy of leading companies (Uber, eBay, Amazon). These businesses with a high income have developed unprecedentedly. It cleared up such e-commerce concepts as B2B, B2C, and C2C. An increasing number of users make purchases through the Internet since they may quickly access the necessary product online. The wide use of mobile commerce implies that more marketers have begun putting money in marketplace applications. The majority of large enterprises have transferred their businesses to mobile platforms because mobile devices have enabled them to reach their clients more quickly. According to Statista research, in 2019 the users stored over 200 billion mobile applications to their gadgets. Also, the demand for marketplace mobile apps will grow. 

By reading this article you will get to know the strategies and approaches to create marketplace software and the estimated cost for the project. Also, our specialists can offer solutions to the challenges that you are going to encounter in the process of developing an app.

Reasons to Create a Marketplace App: Global Statistics

Marketplace apps are booming in popularity and are set to keep growing in the future. Right now, they’re super popular because they’re convenient, offer a wide range of stuff to buy, and are easy to use. More and more people are shopping on their phones, which has made marketplace apps even more in-demand.

According to a new analysis, global sales from marketplace apps are set to top $7 trillion in 2024, showing how crucial they’ve become in how we shop. Mobile marketplace apps lead the charge, handling over 60% of online transactions, thanks to their convenience. People love shopping straight from their phones or tablets, and this trend is only growing.

In the future, these apps will keep getting better. They’ll offer more personalized suggestions, easier ways to pay, and better customer service. As more businesses see how useful digital marketplaces are, we’ll probably see more apps popping up for different industries and special interests.

For businesses, making your own marketplace app opens doors to a massive global audience seeking easier shopping experiences. Whether you’re in B2B or B2C, a well-made app can boost sales and keep customers coming back. To succeed, focus on a strong marketplace business plan. Do your research to understand what customers want, and add features that make your app stand out. With a skilled team and a clear idea of your basic product, you can shine in the competitive app market, making your brand a leader in online shopping.

Types of marketplaces

When you’re looking to build a marketplace app, it’s crucial to understand the different types of marketplaces and how they align with your business model and target audience. The main are:

Based on Target Audience

Marketplaces can be categorized into B2B, B2C, or C2C. Each type requires different features and strategies, which you need to consider when planning how to build an app marketplace.

1. B2B marketplaces cater to businesses buying from other businesses
2. B2C marketplaces focus on direct sales to consumers.

3. C2C marketplaces facilitate peer-to-peer transactions, which are becoming increasingly popular in mobile marketplace apps.

Based on Product Offerings

When you build a marketplace app, you need to decide whether it will be a horizontal or vertical marketplace. 

1. Horizontal marketplaces offer a wide variety of products across different categories, appealing to a broad audience. 
2. Vertical marketplaces specialize in a particular product category, providing in-depth options and expertise. 

Based on Specialization

When it comes to the types of marketplaces based on specialization, here it’s important to understand how focusing on specific niches can enhance user experience and cater to targeted audiences effectively.

1. Niche Marketplaces cater to specific interests, offering unique products that appeal to enthusiasts, fostering deep user engagement and loyalty. 
2. Professional Service Marketplaces connect users with professionals like freelancers and consultants, ensuring reliability through detailed profiles and user reviews. 
3. Industry-Specific Marketplaces focus on sectors like healthcare or real estate, enhancing user experience by tailoring products to industry needs. 
4. Luxury Marketplaces target affluent consumers with premium goods, emphasizing exclusivity and high standards in user experience and security. 
5. Local Marketplaces connect users within a geographic area, supporting community engagement and local businesses, integral to the marketplace business model.

Key Features of Successful Marketplaces

In online commerce, key features distinguish successful marketplaces from the rest. This section explores essential components like shopping cart management, secure payment systems, real-time notifications, and some others. Understanding these elements helps you develop marketplace apps that attract users and foster long-term loyalty and growth.

User Registration and Sign-Up

This feature is the gateway to your marketplace, allowing users to create accounts and begin their journey. A smooth and secure registration process is critical when building a marketplace app, as it sets the tone for user engagement and retention.

User profile

User profiles personalize the shopping experience, enabling users to manage their information, track orders, and receive tailored recommendations. This feature is a cornerstone of any marketplace business model, fostering a deeper connection between the app and its users.

Product Search Functionality

A robust search feature is indispensable in online marketplace app development. It helps users quickly find what they’re looking for, driving higher e-commerce sales and improving overall user satisfaction.

Product Details Page

Detailed and informative product pages are crucial for convincing users to make a purchase. They build trust and provide all necessary information, making them a key element in the marketplace application development process.

Shopping Cart Management

Efficient shopping cart management is essential for a smooth checkout experience. This feature plays a significant role in the development process, ensuring that users can easily manage their selections and complete their purchases without hassle.

Secure Payment Gateway Integration

Security is paramount in marketplace mobile app development. Integrating a secure payment gateway ensures that transactions are safe and reliable, which is vital for user trust and the overall success of your marketplace business model.

Real-Time Notifications

Keeping users informed with real-time notifications about their orders, promotions, and updates is crucial for maintaining engagement. This feature enhances the mobile shopping experience by ensuring users are always in the loop.

Admin panel

A powerful admin panel is essential for managing the marketplace efficiently. It provides the tools needed for oversight and administration, which are critical for the smooth operation and scalability of your marketplace app.

Essential Technology Stack for Marketplace Development

At Mangosoft, we know that building a marketplace app requires a solid technology stack to ensure a seamless and scalable platform. The right stack forms the backbone of your marketplace business model, enabling you to create a successful marketplace app that can handle high traffic, secure transactions, and provide an excellent user experience. Let’s dive into the essential technologies you’ll need.

First, let’s talk about the front-end. For a sleek, responsive user interface, we often recommend using React or Angular. These frameworks are perfect for developing dynamic, mobile-friendly interfaces that keep users engaged. Paired with a robust back-end, such as Node.js or Django, you ensure that your app can manage data efficiently and offer fast loading times. This combination is key to creating a marketplace app that not only looks good but performs exceptionally well, driving e-commerce sales and user satisfaction.

On the back-end, you’ll need a reliable database like PostgreSQL or MongoDB to store user data, product listings, and transaction histories securely. Integrating a payment gateway such as Stripe or PayPal is crucial for processing payments safely and efficiently. Additionally, conducting market research and implementing new features often requires flexibility and scalability, which is why cloud services like AWS or Google Cloud are indispensable. These tools not only support the development process but also help in scaling your app as your user base grows, ensuring your marketplace remains robust and responsive.

By choosing the right technology stack, you’re setting the foundation for a successful marketplace app. At Mangosoft, our experienced development team ensures that every aspect, from initial market research to delivering a minimum viable product, is handled with precision and expertise. With the right tech stack, your marketplace can thrive in the competitive app development marketplace, delivering outstanding performance and user satisfaction.

How To Make a Marketplace App In 7 Steps

Creating a marketplace app might seem challenging, but breaking it down into manageable steps makes it much easier. In this guide, we’ll walk you through the seven essential steps to build a marketplace app that can boost your e-commerce sales.

Step 1. Identify What Type of Marketplace Your Business Needs

At present many humans are aware of the concept of the mobile marketplace. These are the applications created particularly for smooth, handy shopping through an electronic device. The essence of the marketplace lies in accommodating many shoppers and sellers, whereas the Internet stores provide a single seller. Here are 3 accessible categories of marketplaces:

1. B2B (Business-to-business) platform suits the product exchange between businesses on profitable terms.
2. B2C (Business-to-consumer) platform suits for delivering the product from business to the individual. Its primary benefit lies in the wide selection of commercial proposals in a single site. It is a universal webshop where you may find whatever you wish.
3. C2C (Consumer to consumer) platform suits the product exchange between consumers, where both sides are even. It helps the individuals to reach agreement on profitable terms – today you make a purchase, tomorrow you will market your goods or services.

Moreover, there is another classification of marketplaces, where they are divided into the following 2 types:

• Vertical platforms provide similar products from various manufacturers (e.g., Uber, Airbnb).
• Horizontal platforms provide different goods and services with similar features (e.g., Etsy, Handy).

In case you own a young marketplace company, select a suitable type, sort out the marketplace matter in detail and launch a project. Now let’s review the necessary strategies of creating an app for your marketplace enterprise.

Step 2.  Follow an Effective Strategy for a Marketplace Start-up

There are different effective strategies for various marketplaces. We have chosen the essential ones for successful businesses globally. Let’s examine them:

1. Define your focus group. Begin with making a perception of who your software fits the most. You must distinctly understand your audience and direct marketing toward it. Be aware of their age, way of life, habits, and whatever enables you to comprehend who is your buyer. Consider not to cover a wide audience or please everyone.
2. Make a profitable offer. Determine the cause of why users must purchase your product. It must be unique, necessary, and pithy. Consider escaping hype since excessive extravagant claims can harm your business. Your proposition must indicate which issue your product fixes and what value will the user receive when he gets your product.
3. Grow steadily. Although your software has a strong technical side, do not rush to grow. Here is when it is best to start scaling:

• You have a ready-made PoC. It means you are aware of your clients’ specific problems and your solution can weaken them.
• You have the necessary amount of money. Do not invest in growing without preparing a backup plan, ensure you have some financing.
• You have a ready-made technical base. Growing implies accessing more people and, as a result, collecting bigger data volume and processing more financial transactions.
• Make sure you have a qualified team. Humans are an essential resource, employ more people to solve the tasks and innovate.

Most startups do not accommodate SWOT analysis to their business plans or do it wrong. Thus, these companies risk to exceed the expected budget and fail to complete the project.

Step 3. Define Your Product with SWOT Analysis

The advantage your software brings to users affects if they will order your product. Ask yourself the following questions to get your value proposition ready:

1. Which items or services do I market?
2. Which ultimate benefit will the user receive?
3. Who is my target audience?
4. What helps my product to stand out on the market?

As far as mobile commerce is concerned, it seems challenging to be unique since all main functions of the product are almost the same in the applications. Yet, you may succeed by submitting another value to specific customers. It may be chargeless delivery, discounts on the next purchase, an exchange/return option, etc.

Step 4. Select What Features You Want to Add to Your Marketplace App 

Proper app features enable you to encourage a booming group of consumers and marketers, contribute to product diversity, and manage sales.

Here is an overview of the most primary marketplace app features for a seller :

1. The payment system enables financial transactions between a consumer and a retailer. The system should offer an option to hold payments. It is beneficial for the buyer since the payment is held for the seller unless it is delivered and approved by the consumer.
2. Personalized search. Some users browse the online store catalogs without knowing what they need until they examine the options. Others know for sure what they need. Consequently, they wish to find the necessary item sooner and make a purchase. A successful marketplace app design can combine both types of users.
3. Marketer pages and item catalogs. They allow sellers to submit comprehensive product details and better visualize the desired product as if they shop in a traditional store. We assist sellers to develop the catalog templates that comprise several images of the product, comprehensive details, and geolocation if necessary.
4. Social media connection. Users have always loved to shop, and social media connection will help them share experiences. So, the buyers will be able to show their acquisitions, consult on the account of the next purchase, or discuss different products.

Here is an overview of the most primary marketplace app features for a seller:

1. The payment system should offer an option to divide payments. It is essential if the cart holds items from several sellers. Thus, you can subtract your fee and taxes on sales.
2. The admin interface is beneficial for marketers for the following reasons. It helps to track the activity on the website and to alert if some terms of the platform have been broken. Overall, it is a toolkit for the regular implementation of changes and adapting to a fast-growing market.
3. An order system. The purpose of any seller lies in making a checkout option so simple as possible. Simplify the process of checkout, it will help you to escape upsetting your potential buyers. Yet, you should offer a clear structure to reduce the risk of cheating.
4. Currency and languages. To be competitive, it is necessary to offer several currency options. Such convenience will increase your customers’ loyalty. Also, suggest several language options. If your users won’t have to spend time translating your texts, they will come back to you again and again.

Step 5. Consider These Key Challenges & Solutions While Developing a Marketplace App

In addition to secure payment methods and pain-free shipping, clients want more. Mainly, a pleasant shopping experience using all devices is essential for them. Everyone hopes to get a customized approach. As far as the marketplace is concerned, both parties (shoppers and retailers) are clients, and you should accommodate each one. Let’s review the main challenges you are about to encounter and the ways how you can handle them.

Challenge #1: Incomplete Comprehension of the Market Demand and Focus Group

Detailed business analysis is obligatory for businesses that are preliminary preparing for the product. The primary purpose is to confirm the following guesses about the clients. What are their specific problems and which solution could you offer are some of the assumptions. The respondents’ answers will set vectors to your further work. Thus, you will come to an understanding of what customers expect to get once you kick off your product.

Here are the steps which this solution comprises:

1. You make such an assumption – ‘My client has such a pain point…’ or ‘My client regards … as the most critical feature.’
2. Find several experimental persons who fit your target audience.
3. Conduct a survey that consists of matters which will confirm your assumptions.
4. Carry this out repeatedly unless you get a complete understanding of who is your potential client and what is his pain point. Also, think of what can you offer so that you get income from this solution further.

Challenge #2: Where to Get New Customers?

If you wish to create software that will accommodate both customers and retailers you should develop a flexible interaction approach. Customers will not use the application without retailers, while the latter ones will not present their product without having an interested party. Here are the essential tips on how to find the first customers:

1. Create a solid offer. It is best to come up with 2 separate propositions for different parties since each one has unique pain points.
2. Consider finding customers first. It is more challenging compared to finding sellers. At first, focus on building a customer base rather than getting a large income.
3. Adapt your marketplace mobile app for several operating systems. Thereby, you will increase the likelihood of finding the first retailers and clients.

Challenge #3: Aiming to Reach a Wide Audience and Suffering from a Lack of New Clients

Some startup companies tend to make marketplace applications and suppose they have enough strength to oppose major players in the market (Amazon, AliExpress, Alibaba). However, these companies have more experience, resources, and customer trust that makes them unparalleled in their field. So, consider developing a flexible value proposition by creating a new trend or finding your niche.

Step 6. Choose a Tech Approach to Develop an Application for Mobile

Tech characteristics play a crucial role in the favorable outcome of your software. Selecting an appropriate tech approach makes your project supported, growing, and covering the functional demands. Thus, it can contribute to reducing the expenses and hours spent on the development process. The technologies develop as the software building trends make headway towards mobility. Thus, Swift has become innovative for making apps in iOS, while Kotlin – in Android. We will examine the following approaches in this article – custom and non-custom app development.

Non-custom Approach to SaaS Enabled Marketplace Development

If you want to create a proof of concept quickly and if you require the features that SaaS provides, then the non-custom approach fits you. Most startup companies choose either SaaS or immediate solutions for making a marketplace application. Although the solutions are quite speedy and do not force you to be tech-savvy, do not hope to get many personalization options or top-notch quality.

Software as a service (SaaS) enables you to develop marketplace apps without possessing any programming skills. This is easy to install, though it provides limited opportunities to create a user experience and work out a solution that would be uncommon in your niche.

One more variant is to use application builders (WooCommerce, Shopify, OpenCart, etc). Although these platforms were not developed for making apps, they offer all the necessary add-ons for that.

Custom App Product Development

If you have submitted your idea to the investor or have the necessary sum of money for the MVP, then the custom approach fits you. It implies coding a project from the ground up, considering your business plan. Here, you may use either native product development or react native.

We use the former approach when we are looking to make apps for both operating systems (Android, iOS) considering their maintained technologies (Swift, Kotlin).

Meanwhile, we select the latter option when we want to create software using this framework. With its help, you can make one code base and apply it repeatedly to both applications.

Here are the essential tech stack required to build mobile applications for the marketplace – 

1. Swift. In case you are developing solutions for iOS, this language is the most suitable option. Swift offers features that do not require complex coding and, thus, can be easily supported.
2. Java. This programming language is tailored particularly for developing solutions for Android. Java is easy to use and provides libraries, thanks to the open-source of which, users can easily select any of them.
3. PHP. This programming language is suitable for application development (mobile and web-oriented). PHP provides the tools required for the creation of your software from scratch.

Step 7. Estimate the Cost to Write a Mobile App for Your Marketplace

App development cost is contingent on the following demands – dynamic features, hours needed to build software. We have made an approximate estimate of building a single app both for a shopper and a seller. And we have considered 3 primary aspects:

1. Framework involves a sketch of the application that provides a basic concept about the functionality both to the programmer and the customer. The price can vary from $600 to $1.000
2. Design is answerable for drawing the users’ attention towards the software. The user interface and versatility which you offer affect its approval among customers. The price for an attractive and complicated design would range from $6.000 to $9.000
3. Development is the conclusive implementation of the approaches and design in creating an app using code. Depending on how many dynamic features and what resources you add, the value of this step varies from $35.000 to $70.000.

Examples of Highly Successful Marketplaces

Looking at examples of highly successful marketplaces can offer invaluable lessons for anyone looking to create a marketplace app. These leading platforms have set benchmarks in marketplace app development, demonstrating effective strategies for user acquisition, engagement, and growth. Let’s check out some prominent marketplaces like Amazon, eBay, and Fiverr!

Amazon

Amazon is a global e-commerce leader known for its extensive product selection and customer-centric services. Amazon’s innovative features and relentless focus on customer satisfaction make it a top destination for online shopping. Its key features include:

• Vast Product Range: From electronics to groceries, Amazon offers millions of products.
• Amazon Prime: Membership benefits like free shipping and streaming services.
• Customer Reviews and Ratings: Helps shoppers make informed decisions.
• Advanced Search and Recommendations: Personalized shopping experience.
• Efficient Logistics: Fast, reliable shipping through a sophisticated delivery network.

eBay

eBay stands out as a pioneering online marketplace known for its diverse product range and unique auction format. Its distinctive auction style and vast global community make it a dynamic and engaging platform for buyers and sellers alike. Its notable features encompass:

• Auction and Buy-It-Now Options: Allows users to bid on items or purchase instantly.
• Global Reach: Connects millions of buyers and sellers worldwide.
• User Ratings and Feedback: Enhances trust and transparency.
• Diverse Product Categories: Offers everything from collectibles to electronics.
• Seller Tools: Provides advanced tools for inventory management and sales analytics.

Fiverr

Fiverr is another leading online marketplace for freelance services, connecting freelancers with clients worldwide. This marketplace boasts several key features that set it apart and drive its success.

• Gig-Based Listings: Freelancers offer services (gigs) starting at $5.
• Wide Range of Services: Covers categories like graphic design, writing, programming, and more.
• User Reviews and Ratings: Builds trust and helps clients choose the right freelancer.
• Secure Payment System: Ensures safe and timely transactions.
• Seller Tools: Provides resources for freelancers to manage orders and track performance.

What is the Average Cost of Marketplace App Development?

When it comes to building a marketplace app, the costs can vary significantly based on several key factors. The complexity of the app, the features you want to include, the location and expertise of your development team, and the platform (iOS, Android, web) all play crucial roles in determining expenses. Generally, launching a basic marketplace app with essential functionalities might set you back between $20,000 to $50,000. However, for more intricate marketplace apps packed with advanced features, expect costs to start at $50,000 and can soar upwards to $250,000 or more.

Factors influencing these costs include the location of your development team—rates tend to be higher in North America and Western Europe compared to Eastern Europe or Asia. The breadth of features you integrate, such as user profiles, robust search capabilities, secure payment gateways, and comprehensive admin panels, also impacts your budget. 

For an accurate cost estimate tailored to your specific requirements, it’s essential to clearly outline your app’s needs and collaborate closely with a reputable development team or agency. They can provide a detailed breakdown of expenses and guide you through the development process to ensure you build a marketplace app that aligns with your vision and budget.

Takeaways

Undoubtedly, with the advent of marketplaces, the course of the global economy has changed. It occurs because such platforms are consuming many industries. Also, these businesses can change the existing state of affairs on the market.

Many modern marketplaces intend to engage autonomous marketers alternatively to traditional businesses. Consequently, they disrupt an industry, and startup companies can take the opportunity to build a unique marketplace application.

We assume that you are currently better aware of the marketplace application making than you were formerly. We attempted to embrace all the primary aspects, starting from the strategies for the marketplace to advising on how you may build an excellent user experience.

Yet, consider another essential aspect – meet a technical partner, who could assist you in going through the following stages – build a proof of concept, check out your business plan, improve your project.

If you are looking to build a unique marketplace app or scale an existing one, reach our team.