Published: November 19, 2020
18 min read
Last updated: May 2, 2022
In this article, you'll learn:
📚 Types of marketplace websites
📈 How Do You Know Your Idea Has Potential?
✅ Top Features of a Marketplace Website (For Sellers)
🔝 Top Features of a Marketplace Website (For Byers)
⚙️ Tech Stack
Let’s think back a couple of centuries ago.
To buy something from another person you most likely had to travel miles to meet them. Then, you offered a fair price or accepted the terms of the seller. Either way, it wasn’t guaranteed that you would get to buy whatever it is you needed.
Nowadays though, there’s a countless number of marketplaces where sellers and buyers from the whole world can arrange deals in a matter of minutes.
Website market place business (image by Anastacia)
As Oberlo stated in their research, more than 2B people (which is more than ⅓ of the world’s population and 700M more than it was 5 years ago) will make an online purchase by the end of the current year.
It shows us that the demand increases every year and will be in the nearest future.
The marketplace business model has transformed world trade. If you want to be a part of this great globalization process and create an online marketplace — stay with us, we’ll show you how :)
Marketplaces can be different in several ways — in the number and types of products and the people who trade on the platform.
Thus, defining what and how you sell might be the first thing you’d want to tackle when building a marketplace website.
When it comes to the definition of trade, “goods and services” is what you’ll see at every turn. This entails these two types of marketplaces:
Let’s start with goods — the first thing that comes to mind when hearing the expression “website marketplace.”
Basically, the name speaks for itself. It’s a place where people trade goods (clothes, furniture, jewelry, food, and so on).
Marketplace platform for selling sneakers (image by Shah Alam)
A great example of such a marketplace can be Amazon.
Amazon Case Study
It’s one of the most famous and used marketplace websites in the whole world.
The company started as an online marketplace for books but now sells electronics, video games, apparel, food, jewelry, and many other goods.
When building a marketplace for goods, there are two main things worth attention.
#1: Product Screen is the showcase. HD images, a full description of the product (dimensions, price, location, availability) should be there.
#2: Live Support should be quick and accessible 24/7. Customers will often have questions about shipping, refunding & return, account problems, etc.
An online marketplace website for services is a trade space where people and companies can offer their services — whether it’s something that can be done remotely (like platform development, SMM, SEO, etc.) or services that require physical presence (cleaning, transporting, etc.)
To create an online marketplace you should look at marketplaces like Aliespress, Upwork, Etsy, and see what they offer (image by Afterglow)
Many of us have heard about Upwork which is a perfect example of a marketplace website for services.
Upwork Case Study
It’s a freelancing platform where companies and individuals cooperate to conduct business.
The variety of services is enormously diverse. You can find anything from wedding cameramen to dog walkers, from Facebook promotion to website development, from translating two pages of text for a game to interpreting business negotiations, etc.
The monetization model is also worth attention. Users have to buy Proposals (points for freelancers to submit their candidacy) and take a 20% commission from each deal regardless of the budget.
Sounds beneficial, doesn’t it?
To start an online marketplace for services you might want to pay attention to these moments:
# 1: You should properly check your potential contractors’ background and their identity to protect your website from frauds as much as possible.
#2: Geolocation plays quite a role here. Since some services might imply “not remotely,” people may look for such services nearby.
This is an interesting one since most people never really think about it.
There are two ways to create online marketplace platforms: vertical and horizontal.
The first one implies a platform where customers can buy goods and services of the same category but from different providers.
Let’s look at Airbnb as an example. They help to rent out properties around the whole world from multiple owners and landlords.
Airbnb as an example of multi vendor marketplace platforms for services (shots from Airbnb)
See? The service is similar, the resources are different.
Horizontal ones aren’t the complete opposite of verticals. The products there are of different categories but with similar characteristics (like help around the house, luxurious clothes, electronic appliances).
Handy can be a perfect example of such marketplaces. They offer house cleaning and handyman services which can be generalized as help around the houses.
Depending on customers that cooperate on your marketplace, the website can be:
Let’s be more precise. There’s a B2B marketplace called chembid. They offer chemicals and plastics worldwide.
The Facebook Marketplace is one of the most famous B2C marketplaces.
The most known C2C platform on the Internet is eBay. Here every customer is a peer to another which is why this platform is also called P2P (peer-to-peer)
Before starting to grow a business, you really need to plan your strategy and find out many things about your potential product.
These things can include:
Let’s follow the list and start by discussing the first aspect.
To successfully develop a new product you should understand what problems you can solve with its help.
You should also be able to state the problem in 1-2 sentences. For instance, “My idea helps people reach point B from point A fastly”.
And finally, you should be able to answer the following two questions:
These principles were derived by Michael Seibel, the CEO of Y Combinator. The answers should be “Yes” to both questions. Then it signals that you’re on the right path.
Let’s think of Booking as an example. It’s an online travel agency for reserving hotels and other places to stay at while traveling.
Do people often need places to stay while traveling? Of course they do. Is this need essential? Sure thing, otherwise they’d have to sleep under the stars.
To build any websites marketplace you should find a suitable idea (image by Emy Lascan)
Moreover, understanding your customers’ pain-points is a strong marketing tool. Let us explain.
Which one do you think will resonate with your customers’ needs the most?
# 1: We have an amazing offer for you today! You can order this non-stick pan for half the price! Don’t miss the chance for a clean kitchen.
# 2: Hello, Name! How are you doing?
We know that it feels a bit random :) But have you been cooking lately?
If the answer is yes, we get what it feels like when food sticks to your pan and you spend quite a while cleaning after...
In case this bothers you as well, you might want to check out this offer: it’s a non-stick pan at 50% off. Here’s the discount coupon if you need it!
Now let’s discuss.
The first thing we want to point out is that the main message should be help not sell.
You should show empathy towards and understanding of the problem you're trying to solve— it’s endearing.
Besides, asking how the customers are doing and using names instead of just “you” makes customers feel approached personally which greatly increases sales.
Offering your services to everyone probably isn’t the best strategy. Finding the audience that most likely will be interested in your product may work a lot better for your marketing strategy.
For this exact purpose, you can try to define your Buyer Persona — a description of a person who represents your target audience’s details.
You can include:
Buyer Persona (image by Valentin Salmon)
For example, if we wanted to start providing taxi services, our Buyer Persona could look like this:
Depending on the product you’re planning on offering, the set of characteristics may vary.
While understanding your clients’ personas and their needs helps to successfully run marketing campaigns, NOT paying attention to such details can cost you a pretty penny.
We can look at the Coca-Cola company as a great example of a failed Buyer Persona determination.
Early in the life of this company, the creators decided to change the classic formula and at pre-tests, consumers still preferred the old one. However, there was one thing that wasn’t taken into account and couldn’t be measured — clients’ feelings towards the brand.
The Coca-Cola’s target audience didn’t want any change, and the fact that the company couldn’t determine that is the result of a poor Buyer Persona understanding. Due to that, Coca-Cola’s sales fell dramatically.
Coca-Cola (image by Tima King)
Luckily, the company responded quickly and launched the classic formula again and marketed it as “Coca-Cola Classic”.
For sure, knowing your target audience is great, but the main question is where you can get this data. Well, there are several resources:
All that being said, defining your target audience is one of the most important steps of creating a marketplace website.
The competition in some markets is truly tough. So when choosing where to launch your idea, you definitely should consider that and do a little market research.
Thus, there are two most common ways to successfully enter the market:
That is, find a one where nobody brings value.
Let’s take Airbnb as an example. They created a new market using the C2C model.
They started to bring value that most people hadn't even thought existed in terms of business models — the value of living in a stranger’s place.
This implies using an existing idea but to a smaller or more specific market. It can be introducing the idea in an area where it’s not yet offered, a specific form of this idea that nobody uses, etc.
For example, think of CraftsVilla — a marketplace platform for traditional Indian clothes.
Of course, you could try to compete for the share of the existing market but there’s a problem here which impacts the global economy.
Big corporations usually have more money, they’re well known, they have strong marketing and the “word of mouth” which makes them the almost invulnerable leaders of the market they cover.
Thus, it’s really hard to become the new Amazon, Uber, Airbnb, and so on.
Sure thing, when you start running a business, you expect it to generate income. But here’s the real question: How will you monetize your idea?
Subscription plans (image by Vishnu Prasad)
There are several ways to do it:
💸 Monetization model
Users make a monthly/yearly payment to use your marketplace
The marketplace charges a percentage or fixed fee for every successful deal on the website
Listing fee (pay to sell)
Sellers have to pay for every listing they add to the marketplace.
If you have a marketplace for services, you may require contractors to pay a fee for offering their services — just like a listing fee for goods marketplaces.
Basic features are free, and the premium ones are paid
Normally, users don’t pay to use the service but you can advertise whatever it is you want or cooperate with other companies in terms of using your marketplace as the platform for promotion (on a paid basis, of course)
When building an online marketplace website, you should take into account that the different features should work differently for buyers and sellers.
To know how to make a marketplace website, you should take into account that there are two options for how you can organize it:
Sure thing, we can’t know what you’ll prefer. However, what we can do is separate features for sellers and buyers.
Thus, in this section, we’ll review the basic marketplace features for sellers (contractors) you might need to make your marketplace website.
This is an obligatory stage since you’re not going to sell and provide services anonymously.
Try to find balance here and don’t require too much information so that it’s not repellent for users.
Nevertheless, you can consider asking something more than name and email or phone number as and when required.
That is, to check out the functionality and how it all works, name and email should be enough. However, to actually start selling or providing services, users might need to somehow (via attaching ID or driver’s license, for example) confirm their identity and provide more detailed information.
Simple Sign Up to create a marketplace website (image by Natalia K)
Besides, depending on the type of services the Sign Up might be more or less strict.
Let’s say your marketplace is for selling clothes. Nothing special that requires a long identification process, right? You’ll still need to ask for details like first and last name, name of the company if there’s one, maybe simple identity confirmation like a video call, etc.
But if you want to create a website for domestic help — which implies physical contact of performers and customers — that is where you should be careful.
It’s not excessive to ask for an ID photo, residency verification, and it shouldn’t concern performers only — customers should also prove that it’s safe for contractors to provide services to them.
Home Screen is a place on any website where users can access the features and information.
To build a marketplace website, such a Home Screen is a great example of what it can look like (image by UGEM)
For a marketplace website for sellers it can be:
Consider making the Home Screen changeable, especially, the part with detailed information.
Some may not want to have finished and new orders on their Home Screens, or maybe they’d prefer to have money-related statistics instead of number of orders.
Typically, this feature is divided into two parts: Open Orders and Completed Orders. But what exactly will be placed on the Orders Screen depends on the type of product(s) you offer.
Example of the Order Screen on a marketplace website (image by Andrey Turok)
Information about Open Orders may contain:
As soon as the order has been successfully delivered or service done, it should go to Completed Orders and all details can be later accessed from this section.
This screen is a place for sellers to manage their product range.
It should allow sellers to:
A great example of Product Screen to build an online marketplace (image by Liev Liakh)
This one can also contain sorting features in it. Since one seller can offer multiple items within one account, they might want to see statistics for a particular one.
Moreover, you can add the feature “New product” here as well.
Speaking of, we’d like to give you a general note here.
Normally, the term “New product” is used on marketplace websites for goods. However, it’s also possible to add it to service ones. It’s just that typically services aren’t "offered" but they’re "looked for".
What we mean is that if somebody needs a drive home, they don’t check the list of available taxi drivers. They call for service and providers answer, right?
Thus, it’s performers who offer their services in response to customers' calls — not customers answering to performers' offers in most cases.
To build a marketplace website with a great communication system between sellers and buyers, a chat function is worth adding.
Technically, chatting systems are mostly similar. You can calmly leave this one simple since a chat will serve here only as a place for communicating.
The chat example to build an online marketplace for services (image by Masudur Rahman)
It’s not necessary to make this feature entertaining, so you don’t have to worry about adding stickers, in-website emojis, gifs, etc.
However, we’d recommend you to make sure that it’s not possible to make an agreement outside of your app for your customers’ safety and since it can be a loss of revenue for you as well.
You can also add a chatbot — an artificial intelligence that’s intended to answer simple questions and deal with little technical problems. It’ll serve you as a Customer Support and definitely improve user experience.
Besides, via chat you can provide:
In this section, we’ll review the main marketplace features for buyers.
Since buyers have relatively less responsibility than sellers do, their Sign Up & Profiles features can be simplified.
First of all, you shouldn’t ask for too much information. Only for what’s really necessary to "seal the deal."
Besides, you should only do it when it comes to this deal. Before that, you can even renounce asking for information.
A simple Sign Up for a successful marketplace design (image by Dawid Pietrasiak)
The so-called “guest checkout” is also quite a popular option. It means that buyers don’t have to create an account to close the deal. But the rationality of such an option strongly depends on the type of products provided on your marketplace.
You can also enable Social Media Sign Up. It’ll not only improve the engagement of customers but also work as a marketing tool since they could share their purchases on their pages.
Since we’ve already discussed what it is in the previous section, let’s just stick to what it can consist of.
So, Home Screen for buyers can include:
Home Screen for buyers (image by JetUp Digital)
You can think of making this one changeable as well.
Additionally, you can use the buyers’ Home Screen as a place for promoting products if that’s your monetization form.
This feature is really important for an online store since most of the time customers either have a clear request or know approximately what they want on a marketplace app.
And most online marketplaces use it.
However, this feature may and most likely will vary depending on the type of marketplace you want to build. Thus, we’ve created lists for both goods and services marketplaces.
Filtering for services marketplaces (image by Dario)
So, for selling goods you might add filters by:
For services, you might want to add filters by:
However, we'd like to once again emphasize that depending on the products or services on your marketplace, these filters can be different.
Sometimes, you may need to add a whole lot of different filters to narrow down the search request as much as possible.
Let’s take any clothes marketplace as an example where the range of items is wide. The filters can be by category, price, brand, size, fabric, color, the purpose of use (business clothes, casual, beach, etc.), and so on.
This feature is intended to deliver information about the product or service to potential customers.
If you want a marketplace platform for goods, the Product Screen can contain:
For example, if we take a knife, it can be “Home-Kitchen-Tools,” as shown in the picture.
A great Product Screen to have as an example to create a marketplace for goods (image by Vishnu Prasad)
If you want to build one for services, it can consist of:
Every item and service has its price. Thus, to buy something, users should have a secure, reliable, and user-friendly Payment Gateway.
So when creating a marketplace website, try to make sure that it:
The chat for buyers isn’t that different from the one for sellers.
However, the list of FAQs might be different as they will most likely have different questions compared to sellers.
But as for the chat between customer and seller — it’s all the same.
To make your custom marketplace more functional and convenient to use, you can integrate various APIs and SDKs to your website.
So now that you know how to create a marketplace website let’s summarize the main steps you should take up to start an online marketplace:
Have any other questions on how to build a marketplace website? Feel free to drop us a line — we’ll find a way to help you!
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