Table of Contents
With over 35% of shoppers shopping in online marketplaces for retail businesses, your platform is crucial to boosting your business’s growth. Since competition is getting more fierce and the necessity to reduce cost is the primary goal, knowing if you want to create your marketplace or purchase one is essential. Online service marketplace development allows you to modify everything about the system; in contrast, purchasing a pre-built system will enable you to enter the market sooner and with a lower upfront cost.
This blog examines the different elements impacting the cost of online service marketplace development and the various important aspects of the build or buy marketplace choice. Continue reading to find out more.
Additionally, it is referred to with various phrases, including the handyman market or gigs marketplace. It is also known as a freelancer marketplace online. An online marketplace for services is a platform that allows numerous service providers to join themselves and offer the services they offer online. They can offer blue-collar work, like electrician, plumbing, carpentry gardening, and plumbing, to white-collar or typical freelancing jobs like graphic design, digital marketing branding, content writing, and branding.
The benefits of registering on an online services marketplace for service providers are access to a larger market and a more prominent online presence, security of payments, and the flexibility of setting your own prices and timetables. Specific marketplaces for services also offer reverse search features, which let users upload a task, and service providers submit their bids to get the task. These marketplaces provide greater autonomy for service providers, who have more flexibility when it comes to job selection.
Different online marketplaces exist, each with its features and business model. They include:
These platforms allow businesses to offer their products and services to consumers. A good example is Amazon, with many companies selling their goods to customers. Amazon gets a share of every sale as a commission.
These platforms let users sell their goods to one another. eBay, for instance, allows users to sell their items at auction to the bidder with the best price. These marketplaces usually profit with a listing charge or a small portion of every transaction.
These platforms allow businesses to transact with each other. For instance, Alibaba, where both manufacturers and wholesalers sell their goods in bulk to companies around the globe. They typically generate revenue through charging transaction or membership fees.
The platforms link service suppliers to clients who require those services. Examples include Uber, which connects passengers and drivers, and Upwork, which connects freelancers and customers. These platforms usually profit from every transaction.
They specialize in a specific type of service or product. For instance, Etsy focuses on handmade and vintage products, whereas Zillow concentrates on the US real estate market. Their revenue models vary. However, they usually involve fees for listing or transactions.
These platforms offer a wide range of products and services in various sectors. Amazon and eBay are excellent examples because they provide a broad selection of product categories. They typically earn money through commissions charged to sellers on every sale.
These platforms permit the rental of products between friends. Airbnb is a good example, allowing people to lease their houses to tourists. The majority of them earn revenue by charging a service fee per reservation.
This is a more recent market that uses blockchain technology to allow peer-to-peer transactions that do not require a central authority. Some examples include OpenBazaar and Origin Protocol. These markets typically don’t charge transaction costs but could earn money using other avenues, such as selling proprietary tokens.
They are platforms that mix various kinds of marketplaces. For instance, Amazon is primarily a B2C market but also includes B2B (Amazon Business) and C2C (Amazon Marketplace for Used Items) components.
These marketplaces of different kinds show how the marketplace model can be adapted to other types of interactions and transactions between various types of users. Companies should be proactive in selecting the best marketplace model for their needs to take advantage of this flexibility, depending on their specific strengths and target market.
After we’ve discussed the advantages and disadvantages of both strategies, what should you consider when deciding whether you want online service marketplace development or purchase your marketplace platform? Here are some of the most important aspects to take into consideration:
If you’re working with a small budget, purchasing an already-built platform could be the best option. However, if you’re ready to invest in growth over the long term and can pay the initial cost, creating your platform could be a good investment in the near future.
How fast do you want to start your new platform? Purchasing an already-built solution can save you time if you plan to be on the market quickly. However, when you can build your own time, building gives you greater flexibility and control.
Does your business model need special functions or workflows that are unavailable on pre-built platforms? If yes, creating your own from scratch may be the best way to get your desired results.
If you don’t have any experience with software or have a competent tech team, purchasing an existing online service marketplace development solutions may help you avoid technical problems. But, if you have a skilled team of developers, a building can provide more opportunities for innovation.
The platform you choose must be able to expand with your business. Consider whether a pre-built system can meet the demands of your market’s future or if an entirely custom solution gives you the opportunity to expand.
When creating a marketplace, you have two options: build a customized marketplace platform or purchase marketplace software. Each choice has distinct advantages.
The purchase of marketplace software is based on technology set to go and place. This is usually ideal for businesses that must be launched quickly and don’t want to devote years to custom online service marketplace development. The most effective marketplace software is dependent on your particular requirements. Whatever your goals, The advantages of the standard software include regular updates and assistance. If you buy it, you’ll have an established platform that allows you to concentrate on expanding your business while improving customer service. This method is suitable for the majority of companies.
Creating a custom marketplace will give you complete control over your products. This is an excellent choice for large businesses with particular requirements that the software can’t fulfill. However, it takes more time and will require a larger budget for online service marketplace development and ongoing maintenance. Additionally, you’ll need a highly skilled team to develop and oversee the technology. Custom-built builds allow for greater flexibility but require more resources and come with greater risk.
Think about the complexity of your business timeframe, budget, and timeline. Marketplace software allows you to start faster based on proven infrastructure. Building is a way to have more freedom, but it requires a firm commitment. For many users, “buy” is the best option. It offers the most efficient balance of cost, speed, and functionality. In addition, most market-based technology listed here provides a wide range of customization.
If you’ve got a vision for your website and do not want your platform to hold you back, it’s logical to develop. Many traditional eCommerce platforms have limitations on the kinds of integrations that can be built or the type of content that may be offered. If a business has distinctive ideas for the design of its website, the restrictions could prevent it from maximizing the potential of its investments.
Imagine being happy with your eCommerce system only to be notified of a significant update that demands new features and updates you don’t need or want. (Alternatively, you could need the update and wait for the platform’s developers to make the necessary changes.)
This is a normal worry for businesses running tightly controlled eCommerce sites. Setting up your platform allows you the ability and freedom to control the operation of your eCommerce presence entirely. It ensures that you’re the final choice-maker in the operation of your platform.
Controlling your platform is a common aspect of ownership of a platform. When you design your platform, you can determine what features should be added and how you’d like them used for your company’s needs.
You also have your existing assets worth considering. Many companies love their CMS and choose not to give them away. If that’s the case, developing your platform could be the best option as it’s simple to create an individual build that allows you to integrate essential applications and software for business and other software that will enable you to sell precisely the way you’d like.
That’s right, there’s no need to be in the hands of your platform’s specs when you decide to create your own.
Be aware that the platform you choose to use will not only impact the customers you serve but also affect how your team handles your online experience. On the back end, you’ll find individuals from every department using the platform’s integrations, including marketing, inventory management, accounting, and more. Custom eCommerce builds to make it simple for you to control these connections among all users, ensuring that they have the information required to make informed business-related decision-making.
Due to the complexity of building a platform, you’ll have to outsource the online service marketplace development process to a team specializing in eCommerce platforms.
This is a huge source of relief for those who already have a lot of work. There’s no need to perform any laborious work; communicate alongside your team of developers, explain your requirements, and let them get to work. A good development team will help you throughout the design process, including launch, testing, and deployment. If you do need additional features, you’ll have a reliable source to rely on.
They have a deep understanding of your business and will help you make your eCommerce website work as effectively as possible.
There are many benefits to creating your platform. However, certain businesses can be successful with a less invasive purchasing strategy.
If your business isn’t large and is primarily focused on selling essential items, it is sensible that you keep the platform as simple as well. There could be an already-existing platform suitable for your requirements, but there is no need to purchase elaborate integrations or an additional CMS. In these instances, buying a platform is an affordable, simple alternative.
In addition, if you operate an organization that doesn’t require complex transactions or many clients, you’ll need the most extensive, customized back-end capabilities. If this is the case, acquiring an eCommerce platform is the fastest way to get your company online and running.
If your company has an insufficient development budget, it’s probably better not to build the platform yourself. Since your platform is the core of your eCommerce operation, it’s a risk to compromise on the development process. While customizing your online service marketplace development is definitely less expensive than it was in the past, it’s usually cheaper to choose a purchased platform.
If you develop your platform for your business, you’re accountable for not just building and maintaining the platform throughout its existence. If your company does not have a competent service marketplace development company or the skills required to manage this type of work over the long term, it might struggle to meet its ever-changing goals. As we’ve said before, starting this task without being wholly prepared can expose your business to risks. Therefore, purchasing might be the best option unless you’re willing to take charge of the project.
After we’ve given you all the basics and why people want to set up an online marketplace, let’s look at the specifics. We’ll go deeper into the development process of the marketplace platform and the features it will require to succeed in launching and growing your marketplace online.
Conducting research in the hopes of assessing the need is among the most essential steps in the online service marketplace development. It is necessary to understand your industry sufficiently to know customers’ needs and design a market that can satisfy their requirements. It is a good idea to reach out to potential buyers directly. If you cannot do this, consider taking an in-depth look at how your competitors conduct business when you study your competition to determine your strengths and weaknesses. You can then use that knowledge to help set your company apart by offering a unique value.
In general, market research should be carried out by senior business executives; however, if you lack sufficient experience, you may employ experts from the outside to analyze you. Naturally, the main objective here is to identify an untapped area, and that’s an area where forums on independent websites and sites such as Reddit that allow users to be free to share their thoughts and opinions could be helpful.
What is unique about creating and operating a marketplace compared to similar eCommerce sites is that they have two groups of customers to be considered: the sellers who utilize the platform to advertise their products and the customers who purchase from individuals selling their goods. This is why there’s more work to be done when it comes to determining who will be the customers of the product, but it’s not something a seasoned business analyst can’t accomplish.
There are many methods to determine who your intended audience is and to determine who the marketing effort should be directed toward:
Since the market is overcrowded and highly saturated, creating a replica of a well-known marketplace will not succeed. Customers will require an adequate motive to move away from your competitors’ brand to yours, and a solid price point is an ideal approach. Along with a unique selling feature, it can help you draw the attention of potential customers away from competitors toward your brand’s product or service. There are a variety of routes you could go to discover your unique value proposition.
The primary objective of a commercial marketplace is to earn money, so establishing the most comprehensive strategy for monetization is among the first steps to consider once you have conceived the concept. There are many types of monetization options available for marketplaces. You may select one or many of them:
The function of your marketplace will have just as much of an impact on the use and acceptance of the product as its accessibility and pricing policy. You will get an accurate idea of what potential buyers want from the initial stages of creating your marketplace, specifically when conducting analyses of competitors and attempting to understand your target market better. Later in this post, we will look at the most sought-after features of your marketplace that sellers and buyers are looking for.
If you do not already have several software applications in your portfolio and a trusted team who can bring your ideas to fruition, the next step is to form a team to work on the concept. A typical team that is formed for the creation of an online marketplace will typically include:
Furthermore, the project might require the help of a DevOps specialist or developer with specialized knowledge, such as engineers with expertise in specific programming languages or full-stack programmers.
Various options are available to develop the team you need for your marketplace venture. You can employ your entire team in-house or work with freelancers, use the services of programmers from nearshore, and outsource all the processes to an offshore provider. A bit later in this article, we’ll review the most popular alternatives and how they fit into the price of establishing the marketplace.
As this is likely to be a lengthy collaboration lasting months or even years, it is essential to pay attention not only to the technical capabilities of team members but also to how their working culture and communication style are compatible with the other team members. This is why a thorough selection process that includes tests and interviews is the best way to create a dream team of experts.
If you’ve identified the ideal candidate for each job and the team members have a clear understanding of the objectives and goals of the initiative, it’s time to begin the development phase. Markets typically follow an established procedure, starting with business analysis, UI/UX design, development, and quality assurance.
Additionally, the online service marketplace development process is generally designed according to one of the available methodologies for project development, the most popular being Agile. In Agile, the project’s scope is divided into manageable chunks called sprints. A clear and precise plan and communication provide each team member with all the necessary information to do their job and provide product managers with an extensive understanding of where the work is and whether any intervention is required to change the direction.
Regarding quality assurance, the precise timeframe will depend on the model selected for the development. In the Waterfall model, testing and QA takes place towards the end of the development process, which could delay the time frame for software release as the team developing it will require extra time to resolve the problems. Agile testing and QA can be completed almost simultaneously with developing and providing rapid resolution of issues and better quality software overall.
Once the software has been created and tested, you can decide on the date for release, typically preceded by a marketing campaign, and then release the software for early users, whose opinions could be valuable for improving the product. Following the launch, you can reduce your team to two developers and a few testers to provide continuous maintenance and assistance.
Ultimately, excellent software is a work in progress, and customers will not be loyal to software that is not constantly evolving. Growth in the market in terms of sales and popularity directly relates to the frequency at which software is improved and updated. Design updates, new functionality, improved user experience, and the availability of new platforms -all these software elements require additional development and increase customer satisfaction and loyalty.
Here’s a look at the estimated cost of online marketplace development according to the project’s scope:
The decision to build or buy the platform for your online service marketplace will depend on many aspects, such as your budget, timeframe, technical know-how, and long-term business objectives. The building can provide more customization and control. However, it is also more expensive and has a longer development time. However, buying a pre-built system will allow you to start quickly and with less expense; however, it could limit your options to change your plans in the future.
Ultimately, it comes down to your company’s requirements and resources. If you decide to build or purchase a business, how successful your business will be determined by how you implement your plan and offer value to both clients and service providers.
An online service marketplace is a place that allows private individuals, experts, or companies to provide their services. Examples of online marketplaces for service include Upwork, Thumbtack, Uber, and Freelancer.
Although both purchasing and building options are accessible to founders, purchasing is the preferred option for the best time- and expense-effectiveness. This is due to three reasons:
Online marketplaces for services profit from subscription charges, listing fees, transaction fees, and advertisement placement.
Look at what you want for your company, like how much control you’d like over customer interaction and sales. If you want greater control and the ability to handle the set-up the way you want, a platform may be the best option. A marketplace may be ideal if you wish for a more ready crowd and a simpler setup.
