How to Develop a Marketplace from Scratch: A Detailed Guide

The e-commerce industry is rapidly developing, and statistics confirm the steady growth of online shopping — from mobile apps to online stores. One of the most noticeable market trends is marketplaces, which are advanced online stores with benefits for both sellers and buyers.

Even the largest players do not have a monopoly on this niche: consumer demand is growing, which means new, more flexible platforms can successfully enter the market. Launching your own marketplace is a complex task that requires the participation of an experienced team of developers. At AVADA MEDIA, we are ready to share practical experience, tell you how such projects are implemented, what to pay attention to and how to avoid critical mistakes.

A marketplace is an online intermediary platform that brings together buyers and sellers in one digital space. Companies place their products or services on personalized showcases, and buyers can search and compare offers from different sellers, making a choice based on price, quality, and other criteria. Thus, the marketplace turns into a convenient tool for doing business, eliminating the need for each participant to create and maintain their own online store.

There are different types of marketplaces, but we can highlight three main ones:

• B2B marketplaces. Designed to work between different enterprises. Here, a business orders goods from several suppliers, choosing the best conditions. For example, a beauty salon can purchase consumables – shampoos, gel polishes, eyeshadows – from different sellers, focusing on price and quality. This format reduces costs and allows you to find the most profitable offers.
• C2C marketplaces. Created for trade between individuals. Here, users sell and buy goods directly, without the participation of the business. It can be anything — equipment, clothing, cars. This format is convenient for the secondary market, when things change owners and continue to be used.
• B2C marketplaces. The most popular format, where businesses offer goods to end consumers. Here you can find products of different categories — from household chemicals and dishes to clothing and electronics. Due to the wide range and ease of choice, such marketplaces have become the main point of online shopping for many users.

In our article, we will focus on niche marketplaces — platforms aimed at a specific audience with clearly expressed needs. Unlike mass platforms, such services do not seek to cover the entire market, but are focused on one specific segment, providing users with higher quality and specialized offers.

A marketplace is a convenient solution for both customers and suppliers and site owners. Unlike an online store, it is not limited to the assortment of one business, it is easier to expand and promote. Let’s look at the main points in more detail.

Wider assortment

Suppliers are interested in placing their entire product catalog on the marketplace. This increases the likelihood that the buyer will find the desired product from them. This is also beneficial for the platform owner: the greater the choice, the higher the likelihood that the user will purchase several products at once and return for repeat purchases.

In addition, the marketplace develops according to the principle of a closed loop: more buyers attract new suppliers – the assortment grows – traffic increases – the marketplace becomes even more popular. In an online store, this effect is limited, because everything depends on the budget and capabilities of the owner. If he has a small warehouse, he will not be able to expand the assortment. If there are no funds, purchasing new goods becomes impossible.

Easier to promote

Each product on the marketplace has its own separate page, which means that the platform has many web pages that are indexed by search engines. The more such pages, the higher the chances of taking top positions in the search results and attracting organic traffic.

An online store can also have many pages, but this is rare at the start. Therefore, the owner has to invest in SEO, content and advertising so that the site is higher than competitors. This requires significant costs and time.

Easier to manage

The marketplace operates on a distributed responsibility model. The sellers themselves are responsible for the assortment, warehouse stocks and logistics, choosing convenient methods of storing and delivering goods. This simplifies the work of the platform owner: even if the assortment increases several times, he will not have to expand the warehouse or hire additional employees.

In an online store, everything is different: the owner himself is responsible for the purchase, storage and shipment of goods. This means that over time, you will have to expand warehouse logistics, organize delivery and increase the staff. All this slows down business growth and requires large investments.

Thus, the marketplace provides more opportunities for development and automation of processes, and therefore becomes a profitable alternative to a traditional online store.

The functionality of a marketplace can be huge, but there are key modules without which the platform’s operation is almost impossible. They provide convenient management, process transparency, and comfort for both buyers and sellers. Let’s look at four main functions that should be implemented at the start.

1. Seller’s personal account

One of the most important modules of a marketplace. The seller’s personal account is a kind of “control center” where a company can add products, track orders, and manage sales. It is important to provide basic elements in it: contact information, product catalog, order history. Over time, you can expand the functionality by adding analytical tools, return management, and shipment automation.

2. Product cards

An information card is one of the main factors for successful sales. It should contain photos, descriptions, characteristics, and customer reviews. An additional advantage will be SEO optimization, thanks to which products will be better indexed in search engines.

For example, imagine an electronics marketplace, where the product card should contain technical parameters – screen size, processor, memory size, demo photos, video reviews, as well as comparison with similar models. This helps users make a decision faster and reduces the burden on support, since customers receive all the necessary information in advance.

3. Seller’s showcase

This is a personal page of the supplier, where he can display his products, create advertising banners and highlight the key advantages of the product. The ability to customize helps businesses better present their offers, attract customers and increase the average bill.

For example, consider a sports equipment marketplace. On such a platform, it will be convenient for the seller to create a showcase where the products will be sorted by sports: running, fitness, martial arts and others, and also add advertising banners with selections of seasonal and promotional products. This approach will help buyers navigate the assortment faster, and also increases the likelihood of additional purchases.

4. Communication with support

Feedback between customers, sellers, and the platform administration is an important part of the marketplace’s work. Communication methods can be different: a chat bot, an online chat with an operator, a ticket system, or telephone support. This helps to quickly resolve issues related to delivery, product quality, and returns.

If a buyer receives a damaged product, they should be able to easily contact support and quickly find a solution — for example, arrange a replacement or get a discount on the next order. The more convenient this process is, the higher the trust in the platform.

Marketplaces have set a new trend in the e-commerce industry and have significantly changed the market, making shopping more convenient, accessible and safe. Today, they attract not only end customers, but also many sellers, opening up wide opportunities for them to increase their income.

Let’s consider the advantages of marketplaces in more detail:

• Wide coverage. Marketplaces are not limited to a specific region – they operate throughout the country or even on the international market. Accordingly, sellers get access to a much larger audience and the opportunity to develop their business faster.
• Large assortment. Marketplaces present products from many sellers, which allows the platform to cover different price segments – from budget goods to premium categories. This attracts more buyers and gives businesses the opportunity to flexibly customize their sales strategy.
• Minimizing risks. Unlike a traditional online store, a marketplace does not depend on specific suppliers. Even if one seller experiences supply problems or leaves the market, their products are replaced by similar offers from other platform participants. This reduces the likelihood of a shortage of popular products and reduces the risk of loss of profit.
• Expandability. The marketplace can be developed gradually, attracting new sellers and buyers. It is important to consider technical issues and be prepared for an increase in the load on the platform. At the start, the marketplace can work in one niche, and over time expand, adding new categories of goods or entering new markets.
• Security. Unlike online stores, marketplace owners do not spend resources on warehouse management and logistics, which allows them to focus on ensuring the security of users and data. Typically, complex systems are used for this, which include: encryption, integration with secure payment gateways, two-factor authentication, seller verification, anti-fraud systems and flexible access rights management.

Creating a marketplace is a complex process that requires clear planning, the right choice of technologies and constant product improvement. Based on our experience, we have developed a step-by-step guide that will help you launch your own marketplace from scratch, bring it to market and make it profitable.

1. Determine the type of marketplace and monetization model

Before starting development, it is important to determine what platform format you plan to create. Marketplaces differ in audience:

• P2P — connects end users.
• B2C — in this model, companies sell goods or services to end consumers.
• B2B — here, companies provide goods and services to other companies.

Marketplaces also differ in sales format: product — sell physical goods, service — sell services, as well as hybrid, which combine both of these models.

The next step is choosing monetization. There are different options here, but the most popular and in-demand are four:

• Commission from each transaction.
• Subscription for sellers or buyers.
• Paid ads and product promotion.
• Advertising within the platform.

The right choice of model determines how the marketplace will generate profit and under what conditions it will interact with sellers.

2. Selecting key features for sellers

For sellers to want to work with the marketplace, the platform must provide them with convenient management tools. Among the main functions:

• Adding products and managing orders.
• Transaction control and financial management.
• The ability to launch promotions, discounts and advertising offers.
• Built-in chat for communicating with customers.
• Analytics tools for tracking sales and customer behavior.
• Integration with social networks for additional promotion.

It is also important for sellers to have access to a convenient order management system. This can be your built-in system, or the ability to connect external CRM and ERP via an API interface.

3. Selecting features for buyers

The functionality for buyers differs significantly from the tools that the marketplace provides to sellers. Sometimes these differences are so significant that the platform can be divided into two separate applications. To help customers quickly find the products they need and place orders safely and comfortably, we recommend implementing the following modules:

• A convenient search system with a flexible filter system, such as by price, category, and rating.
• Cart and wish list.
• Built-in payment systems.
• Order tracking
• Convenient return policy.
• Seller reviews and ratings.

4. Prototype development

Once these issues are resolved, you can move on to the technical development stage. And the first part of this process is creating an interactive prototype. It visualizes the logic of the platform and its functionality, and also contains interface wireframes that allow you to understand the location of modules on the pages.

Such a mockup is a great opportunity to test ideas at early stages, as well as identify and eliminate potential problems and vulnerabilities. As a result, development costs and time are significantly reduced.

5. Creating a UI/UX design

The design of the marketplace should be developed with a focus on the target audience, functionality and features of the chosen niche. It is important not only to create a visually attractive interface, but also to ensure convenient navigation, clear logic of user interaction and adaptability for different devices.

In most cases, we recommend starting the development of the marketplace with an MVP – a minimum viable product of your platform. In this version, the UI/UX design is not yet final and can be improved based on feedback from real users.

6. Selecting suitable development technologies

The choice of stack affects the speed of development, ease of support and further development of the marketplace. The optimal set of technologies helps to create a reliable platform that can withstand increasing loads and easily adapt to changes. Usually, for such projects, we recommend using the following stack:

• Frontend. HTML, CSS, JavaScript, Vue.js, React. These tools allow you to create an interactive and adaptive user interface. Vue.js and React provide high speed and ease of updating components.
• Backend. PHP, Python, Java and their frameworks, such as Laravel, Django, Spring. They provide reliability, flexibility and the ability to process a large number of requests. The choice of language depends on the requirements for development speed, extensibility and integration with other services.
• Mobile development. To create applications, we use native technologies: Swift for iOS and Kotlin for Android, which ensures maximum performance and ease of working with platform APIs. If you need to launch a cross-platform solution, we can implement it using the Flutter SDK, which is almost as fast as native tools, but allows you to significantly reduce development time and costs.
• Databases. Depending on the data structure, you can use relational databases MySQL and PostgreSQL, or NoSQL storage such as MongoDB and Firebase – to work with disparate and large data.
• Payment gateways. Integration with payment systems such as LiqPay, Fondy, Stripe allows you to securely process transactions and ensure the protection of user data. We also recommend providing the ability to implement gateways for paying for goods with digital currencies.

7. Creating a minimum viable product

A marketplace is a large portal designed for huge traffic of visitors: both from businesses and end customers. When launching it, it is necessary to design and develop extensive functionality, and to ensure that everything works correctly, it is worth starting with creating a minimum viable product.

Here’s why this is important:

• First of all, an MVP allows you to see the problems you will face when deploying and developing a marketplace.
• MVP will also help you assess demand and understand whether the market needs your product or the idea should be improved.
• In addition, you will be able to collect valuable feedback from the target audience. This will allow you to understand how to make the product even more valuable and in demand.

Creating an MVP is even more profitable when you want to test hypotheses and the operation of complex functional mechanisms on minimal budgets. This approach allows you to save a significant part of the budget and resources, avoiding unnecessary costs for finalizing ineffective solutions.

8. Maintenance and support

Development of a marketplace does not end at the launch stage. In order for the product to remain in demand and competitive, it must be regularly updated, optimized and adapted to the changing needs of users.

User experience analysis and testing help identify the strengths and weaknesses of the platform. You will be able to understand which functions work effectively and which are outdated and require improvement. Regularly collecting feedback will not only eliminate possible problems, but also identify new opportunities for improvement.

In addition, it is important to provide technical support and quickly respond to emerging errors. Reliable platform maintenance contributes to the stable operation of the service, increases the level of user trust and strengthens the reputation in the market.

The demand for marketplaces continues to grow, and the number of new applications increases with it. The competition in this niche is high, so to successfully enter the market, it is important to offer users a quality product that can effectively solve their problems.

At AVADA MEDIA, we have been providing marketplace development services for various business niches for over 10 years. Based on the capabilities of advanced technologies and the deep expertise of our teams, we create functional, reliable and scalable solutions that meet the needs of the target audience and help companies successfully develop in a complex market.

• Modern technologies. We use reliable technologies and tools that ensure high marketplace performance and its availability on different platforms.
• Individual approach. A deep analysis of requirements allows us to find optimal technical solutions for each project.
• Comprehensive development. We implement the project at all stages – from the idea and design to implementation and support, guaranteeing the stability and efficiency of the final product.

By choosing AVADA MEDIA, you get not just a technical contractor, but a reliable partner who will help you develop an effective marketplace and ensure its development at all stages.

We invite you to discuss your project. Use the form below to contact our experts.