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How to Create a Marketplace From a Scratch

Online commerce can be divided into three main sectors: online stores, various data management and 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 we can meet a huge number of marketplaces in each industry, and experts in the field of Ecommerce predict that the market will only increase due to the ever-growing demand for online purchases, the globalization of Internet technology, and other factors, including the pandemic of 2020.

Therefore, large domestic and foreign companies recognize the value of marketplaces and are actively creating and promoting their own platforms. Thaizzle is an example of such a marketplace, offering direct communication between sellers and buyers, as well as providing a platform for jobseekers and employers to connect.

What is a marketplace?

Without going into theory or looking up Wikipedia, we can say that a marketplace is an online store that sells products from other sellers.

There are two basic models for building marketplaces: sales on behalf of a marketplace, as Ozon does, or a platform with engaged sellers, where each store sells goods on its own but adheres to the general rules established by the platform creators.

How to launch a marketplace?

Creating a marketplace, as any other business, begins with setting goals and objectives. To research this topic in detail we’ve interviewed several successful startup marketplaces, including SourceMe (industrial components marketplace), Outschool (educational marketplace), Flubit (B2C marketplace for branded goods), Festicket (marketplace that lets consumers find and book festival experiences including tickets and accommodation online). We’ve collected lots of valuable information and ready to share it with our readers.

At the very beginning of the journey the creators of a marketplace must answer three basic questions:

  • Why am I making this particular type of marketplace?
  • What I am going to sell;
  • Who I am going to sell to.

Then it is worth determining the type of marketplace. The table below shows the types that exist.

  • Type of participants: B2C, B2B, C2C
  • Type of products: goods, services, coupons, etc.
  • Type of monetization: sell traffic, leads, advertisement, additional services, margin from goods, etc.
  • Type of structure: vertical – sell only one type of goods; horizontal – sell various categories of goods.

The business model and structure depend on the type of marketplace. It also focuses on the target group of buyers.

The target audience of a marketplace

The target audience is your potential customers who can order goods and bring in profits for the merchants and the marketplace as a whole. Since marketplaces almost always have a very broad target audience (this is particularly typical of horizontally structured marketplaces), the definition of the target audience will be a bit different than for an online store.

To begin with, the marketplace has two target audiences: those who sell products and those who buy them, and they must be dealt with separately. We will talk about this below, but for now, let’s highlight the main parameters by which you can determine your potential partners.

The target audience of a marketplace

Given the parameters of the target audience, you can choose a strategy for developing the marketplace. A marketplace created without reference to target audiences is doomed to failure.

Technology platforms for creating a marketplace

When you have decided on all the basic parameters and target audiences, you can proceed directly to the creation of the platform itself. For this purpose, it is recommended to choose one of the existing platforms or modern software technologies for creating a marketplace.

Consider the most popular platforms.

CS-Cart Multi-Vendor – one of the most popular platforms for creating large marketplaces.

  • Pros: Confirmation of the processing of personal data 152-FZ. Without this function, the marketplace may be fined.
  • Login via social networks. Buyers will be able to sign in to the Marketplace via popular social networks. With such authorization, there is no need to register on the marketplace, which saves shoppers time.
  • Analytics on the marketplace is especially important as it is necessary to monitor activity not only amongst buyers but also sellers.
  • A complete database of cities worldwide, and integration with maps. The function makes it easier for the buyer to fill in the fields and speeds up the order placement process.
  • Delivery methods and delivery cost calculators.
  • Payment systems integration.

SAP Hybris

  • E-commerce master data management. This includes a suite of online commerce master data management software – content, promotions, and other important e-commerce items.
  • Web storefront.
  • Business processes and workflow.
  • The mobile app comes with a working prototype and a set of APIs. Kiosk version and mobile version are additional versions of the web store, using almost the same functionality and data as the main website, but in a different “wrapper”.
  • Special functionality. This includes such important topics as returns, defective goods, partial payments, loyalty systems, calculation of terms, cost and delivery possibilities, triggers, and mass mailings.
  • Search feature inside the e-commerce is one of the most important components of the system because it directly affects the conversion of visitors into buyers.

See the full list of platforms that are rated and suitable for building a custom e-commerce marketplace here.

Payment Services

There are more than a hundred different services for online payments on the market, which allow you to accept money, convert currencies and perform other actions. When choosing, proceed from the needs of customers and the capabilities of the technological platform on which the marketplace was created. Check and consider the most popular services for accepting payments online in your region.

Timeline and Budget for Launching a Marketplace

Once you have decided on the technical, strategic, and payment matters, you should pay attention to the secondary but no less important aspects of creating a marketplace.

Technical support for users

Many technical questions may arise while using a marketplace: from both sellers and buyers. Therefore, for the convenience of both, it is necessary to create a professional support service. There are two options for organizing the work of technical support: in-house and outsourced support services. So, you can choose any of the proposed options, depending on your budget.

Recruiting staff

Half of the success of any project depends on the team that implements it. Therefore, the selection of personnel is worth a responsible approach. First of all, decide whether you create your own team or hire specialists on a contract or freelance basis. many businesses choose their own team, and here’s why.

The main advantages of having your own team are the following:

In-house professionals are part of the team. They are accountable and trainable. Problems with such specialists are solved much faster. In addition, you can always monitor the quality of service provided to customers in real-time, without waiting for feedback from users.

Employees who work on the staff feel their personal responsibility and interest in the development of the project.

If an emergency arises, your own employees can be quickly brought in to solve it, even if their working hours are already over.

The main disadvantages of creating your own team, I would say, are the time and money spent on recruiting and training new specialists. In addition, during the mentoring period and a few months after, attention must be paid to quality control of tasks until all employees are up to speed.

Testing and Beta Launch of the Marketplace

When the marketplace is technically ready, you can move on to the beta testing phase, that is, launching a test version to identify problems and improve functionality. The launch of the beta version can be divided into several stages:

Stage 1. Delivering an audience of potential partners. Existing businesses that are interested in expanding their products can become such partners.

Stage 2. Sending out invitations to test the beta version of the marketplace. You must collect a database of potential partners and send out a personal email with the terms of participation in testing.

Step 3. Define the testing term and provide a link to the beta version. After clicking the link the partner is able to use all the features of the marketplace.

Stage 4. Gathering feedback from users with the help of a survey form or direct communication. After the results of testing, it is necessary to collect feedback from partners in order to identify weak points and correct errors.

Step 5. Measure site conversion, search convenience, etc. At this stage, one should work with the interface and conversion factors of visits into sales.

Stage 6: Adjusting the marketplace, fixing bugs, and launching the main version.

The cost of development

The cost of developing the marketplace will directly depend on its type. There are two types: box solutions and custom development.

If you do not have the goal of becoming the most popular marketplace in the world and are attempting to create a vertical marketplace (trading in only one category of goods), then box solutions are suitable for you. By buying a ready-made package, you save time and money on deploying a full-scale marketplace. It will take 1-2 months to develop a ready-to-use boxed service and costs are also acceptable.

For custom or individual development, you need to engage a whole group of specialists, who can create an online site with lots of additional functions and pages. Custom development is rather expensive and can take from 3 to 6 months.

Here are the main stages and approximate development terms:

Registration and authorization functionality: 40-80 hours

Roles management functionality: 60-120 hours

Admin panel: 150-300 hours

Search functionality: 80-200 hours

Products and services management functionality: 80-200 hours

Social communication, other communicational functionality: 150-300 hours

Notifications: 80-160 hours

Payment integration: 80-120 hours

This calculation is relevant, provided that you attract a professional development team, rather than using the services of freelancers, which you found on the Internet.


Developing a marketplace – a complex and responsible process that can take up to six months and cost a lot. Therefore, before starting the development, carefully analyze the niche, determine the strategy of the marketplace, as well as the means of monetization. With the right calculation, the right marketing, and PR activities, the payback marketplace will be from 1 to 3 years, and then the platform will be profitable

To avoid difficulties in the process of developing and launching a marketplace, you need to pay attention to the following aspects:

  1. Think as clearly as possible about the composition of the team, its hierarchy, and the model of interaction between employees of different departments. Determine exactly which specialists will work with you in the team, and which you will outsource.
  1. Make a detailed plan showing all the business processes and stages of interaction with users within the service.
  1. Remember the 2 principles of selecting a team. First, the specialists must be of a high level, have knowledge of launching new projects, and experience with large online stores or trading platforms. Secondly, monetary motivation should not be the key. Already at the beginning, it is necessary to clearly understand, whether this employee will be part of the team or not? Will he be ready to develop together with the project and be involved from the very beginning?
  1. The internal interface and structure of the platform should be intuitive and user-friendly. There should be no complicated algorithms that can discourage customers who come to the resource for the first time.
  1. The product catalog should be created on the basis of generally accepted and known techniques. You don’t need to invent your own, just analyze competing marketplaces in detail. In the future, listen to the requests of users, upgrade existing categories of products or create new ones.
  1. Develop a detailed marketing strategy that includes online and offline promotion of the project. All channels and sources of communication with each target audience should be considered from the very beginning.

We’d like to highlight the main problems that almost everyone who has ever been involved in the development of a marketplace faces.

  1. Always allow more time for the development of the platform itself. Creating the perfect product hardly ever works from the first time. There will always be refinements and changes needed.
  2. Choose efficient staff, even if it takes a lot of time and effort.
  3. Make sure that no information is leaked before you launch the project. First, this threatens to increase competition from other market participants. Secondly, information about the project may end up in the hands of the media before the site is fully ready to launch, and this threatens a potential reputational risk.
He is a Blogger, Tech Geek, SEO Expert, and Designer. Loves to buy books online, read and write about Technology, Gadgets and Gaming. you can connect with him on Facebook | Linkedin | mail:


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