The global coronavirus pandemic has attracted several people to online shopping. Nowadays, approximately 40% of consumers are interested in shopping online. The good thing about online marketplace development platforms is that anyone, even you, can enter them and establish a thriving business. You don’t need to own any goods to build an online marketplace.
All you have to do is offer the goods of others to your users and make the transactions. The sharing economy market, which is the talk of peer-to-peer marketplaces, is projected to reach a whopping $355 billion by 2025. Doesn’t that sound enticing enough to give your idea a kickstart?
Steps to Building an Online Marketplace
Whether you wish to build an online marketplace to attract new customers or make more money, this guide follows a step-by-step approach that will help you throughout the entire process of creating an online marketplace.
Research: gathering data and validating your idea
Before choosing the right type of marketplace, technologies, or platforms, conduct research to analyze whether the product or software you want to build has demand.
The first step is defining the value proposition for your prospective users/buyers. For marketplaces, the first step usually involves solving a problem. While representing a problem worth solving, view the market leaders and competitors.
In a broad sense, all the possible niches might already be covered, so to create an online marketplace, you must think narrowly, find your interest, focus on a favorable niche, and create a unique virtual marketplace.
The next step requires knowing your target audience, which requires careful research and analysis. Consequently, you will find your segmented audience, proof of demand, and a list of expectations that you can quickly turn into features.
How to validate your marketplace idea?
Once you have an idea of a particular type of online marketplace, you need to validate your vision to ensure you are moving in the right direction.
This step can be incredibly time-consuming but pays off in the long run and prevents you from making silly common mistakes. Here is an example of the questions you need to answer before moving to the planning phase.
- Will you use this product, and how frequently?
- What is the total addressable market size?
- What is the opinion of the group of prospective customers you interviewed?
- How much do you depend on external resources?
- How well did they comprehend the product’s purpose?
Hence, you need to brainstorm to answer these questions and obtain feedback from prospective customers via interviews or surveys and research.
Planning Stage
The planning is the foundation behind every project’s winning performance and delivery. It requires paying considerable attention to planning the complete development process to offer a tangible result to your customers.
Skilled business analysts should examine your functional, technical, and usability requirements and business needs. After reviewing the input data, you will get a comprehensive project specification with a specific development action plan. It details all the peculiarities of the project, such as tech stack, features, API integration, etc.
You will also need to hire UI/UX designers to get the wireframes created for each web page. You will then get a detailed estimate along with every feature execution time.
Creating a marketplace: development stage
There are 2 ways of developing a marketplace.
- From scratch
- Using one of the current marketplace platforms
If there is a limit on your budget, you can go with platform-based development. The tailored software will respond to all your business requirements, logic, design, and features. If you choose a marketplace from scratch, here is what you need to do:
1. Make a product prototype and test-run your idea
The first step requires creating a simple visual model (prototype) of the marketplace you have envisioned. You may begin with a standard pen-and-paper sketch or design an engaging, interactive HTML model.
This time-consuming process takes skills to master. Hence, you can work with a reliable online marketplace development firm to develop a top-notch marketplace site and visual model.
This is the best way to validate your idea, gain startup investments, and attract potential first-users. You must also prepare a project specification consisting of your product’s details such as design, number of features, the complexity of features, number of third-party integrations, etc.
However, since a prototype is not functional, you need to create the basic features in the MVP phase, which is the next step.
2. Develop a Marketplace MVP
A minimum viable product (MVP) allows you to validate your marketplace idea and minimize time to the market with the least amount of investments.
The primary concept behind the MVP is to add as much functionality to your marketplace as possible to engage first-time users and gather initial feedback. Here are some must-have features for your marketplace:
- User account, profiles, and settings
- Real-time chats
- Search and filters (such as price range, location, etc.) and relevant suggestions.
- Ratings and reviews
- A trustful and transparent payment systems integration.
When your product starts generating a profit, you can reinvest in your business by providing additional functionality in the form of more sophisticated and advanced features.
The list of advanced features for buyers includes:
- Advanced sorting and search (to show details based on the filters applied and sorts results by color, product type, price, etc.)
- Price comparisons
- Sharing options in social networks
- Wishlist (includes products buyers aren’t ready to buy yet but may want to buy later)
- Push notifications
Also, here is the list of advanced features for sellers:
- Advanced product management (allows vendors to add, edit, duplicate, and save descriptions of numerous products on one page.)
- Buyers’ behavior analysis.
3. Grow your online marketplace client base
After the product release, you expect a ton of buyers and sellers to approach you. Still, it can take effort and time to convert your online marketplace into a lead generation machine. This is why it is crucial to increase the user base way earlier before starting your marketplace.
On the launch day, your site mustn’t be a blank slate without users; otherwise, it’ll become challenging to attract new users. It also diminishes your trust in the marketplace.
Key Factors to Building an Online Marketplace
- A Domain name (short, brand-associated, SEO-friendly, and mustn’t include hyphens or numbers)
- SSL certificate for securing payments and protecting your privacy
- Web hosting account for storing your website’s files
- Content Management System (CMS) creates, edits, and publishes digital content without coding
- Payment solutions (direct, aggregated, and parallel payments)
The Team Required to Build a Marketplace
Undoubtedly, it takes an entire team of people to build a marketplace. The project team that will help you create your marketplace includes:
- A Project manager who has the expertise in all the details of creating an online marketplace and supervises the team members and processes.
- Quality Assurance (QA) engineers
- UI/UX designer
- Web developers.