How do you build an online marketplace platform and how much does it cost?

The demand for online marketplace platforms is rapidly increasing. Although many people believe that marketplaces are only about e-commerce websites, they can comprise any business domain. The key idea is to connect product or service providers with customers in one place while enabling online payments.

E-learning, healthcare, insurance, online booking, freelancing, and other marketplaces have been witnessing fast growth over the past years, especially during the COVID-19 pandemic. According to Dealroom’s report for 2020, marketplaces have a combined value of $814 billion globally.

At Arateg, we have recently delivered several marketplaces to sectors such as food service and hospitality that now are helping companies generate revenues despite an economic crisis and lockdowns imposed by governments.

With in-depth expertise, we have prepared an ultimate guide on how to build an online marketplace, from the key functionality that should be implemented to a technology stack that should be used.

Furthermore, you will learn what budget you should have to create a marketplace. We have also indicated the average number of hours necessary to add each feature based on our experience in online marketplace development.

Creating UI/UX design of an online marketplace platform

After analyzing client requirements, a marketplace development company draws wireframes to visualize the structure of a future online marketplace platform. At this stage, it is crucial to work out an information architecture that includes content organization in such a way that users can easily find everything they may need. Then, a dynamic prototype is created to see an app or website in action.

When looking for a software engineering firm, it is important to take into account whether a potential partner has expertise in a user interface (UI) / user experience (UX) design. Following best design practices , UI/UX experts ensure a seamless UX, smooth navigation, and intuitiveness.

By making a responsive design, you will achieve consistency across all screens and devices. An IT service vendor also assists in implementing a unique branding style to make your product recognizable among competitors.

Time: 180 hours

The main features for online marketplace development

An online marketplace is a platform that serves different parties: vendors and consumers. Therefore, software engineers have to implement different functionality to meet the needs of all users. However, some features are required for both roles, for example, a user profile, registration, and authorization.

1. Registration and authorization

When building a marketplace platform, it is essential to enable customers to sign in and sign up in any convenient way, for instance, via e-mail, Google, and social networks (Instagram, Facebook, Twitter, etc.).

In addition, you should not oblige users to register on the marketplace in order to interact with it. This will disrupt user experience resulting in a decreased number of visitors and lower engagement.

Delivering this feature to vendors, you should allow them to submit their company details, including the required documents and certifications. It is not generally necessary for unmanaged marketplaces but is important for fully and lightly managed platforms.

Time: 60-80 hours

To learn more about the main types of marketplace apps and websites, read our article on this topic.

2. User and vendor profiles

A profile generally contains basic information about a customer such as a name, age, contacts, information about purchases that have been already made, as well as bonuses if an online marketplace platform implements a loyalty program. In case you incorporate a feature of adding goods to “Favorites”, a user should be able to view this list from a personal account. A vendor’s profile usually includes company details and relevant documents if needed.

Time: 100 hours

3. Search

The search for products, services, and vendors is an essential feature of an online marketplace platform. When creating a marketplace website or application, it is important to provide various filters, so that users can easily find everything they may ever need, from product description to supplier’s quality assurance certifications.

Time: 100-120 hours

4. Catalog

A catalog is a page containing goods or services offered by multiple vendors. When building an online marketplace, you should add as many categories and subcategories as possible to facilitate the search for customers.

It may not be necessary to create a separate product or service description page as you can make it a part of the catalog. Therefore, when users click on some product or service, they see a detailed description appearing on the same page.

Time: 120 hours

5. Online payments

To implement this functionality, you should integrate a payment gateway—e.g., PayPal, Square—that will perform the processing of online transactions. Serving as an intermediary between a customer and a merchant, it allows for validating card details, verifying the availability of funds, and committing a money transfer.

With this technology, you enable a variety of payment methods via credit and debit cards. For example, using PayPal, you get access to Visa, Mastercard, Union Pay, and American Express while Braintree also supports Venmo, Apple Pay, and Google Pay. Furthermore, vendors of payment gateways ensure security by employing data encryption, 3-D Secure, Secure Socket Layer, and Secure Electronic Transaction.

In our online marketplace development company, software engineers make integrations with popular payment gateways, such as Stripe, PayPal, Amazon Pay, Braintree, Square, 2Checkout, and Authorize.net.

Time: 120 hours

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