No Doubt multiple Startups are about developing new marketplaces. The increasing popularity of marketplace ideas among the Founders is because of the concept of “Creating money out of nowhere”
Marketplaces represent some of the world’s most high-profile consumer businesses along with a large amount of value for investors.
For example, the net revenue of Amazon for 2022 was $469.82 billion.
What is an online marketplace?
A marketplace is a platform where many vendors can come and sell their goods. Sellers register on a platform (or multiple platforms) and sell their products to clients with the help of services provided by the marketplace platform itself. Depending on the type and size of a given platform, these services can differ and so will the target audience and marketing strategies.
Are online marketplaces profitable?
Is developing an online marketplace worth doing in 2023? The short answer is yes, for sure. However, it’s obvious that a short answer isn't enough, keep reading the rest of the details.
Common elements to every marketplace
1. Marketplaces aggregate many sellers and their inventory
What sets a marketplace apart from a standard e-commerce site is that the goods and services are supplied by a third party. In most cases, the marketplace platform acts as a type of digital middleman
2. Marketplaces include a transaction element
A marketplace differs from a listing site by taking care of at least part of the transaction between buyer and seller.
Сlassification of online marketplaces
By products
Goods (Etsy, Amazon)
Services (Uber, Airbnb)
By interaction
Online commerce (eBay)
Online-to-offline (Amazon)
By participants
Customer-to-customer (eBay, Airbnb)
Business-to-customer (Amazon)
Business-to-business (Alibaba)
Selecting the right market for your Marketplace Idea
1. High fragmentation It’s much easier to start a marketplace when there are a lot of uncoordinated suppliers and buyers
2. The buyer-seller relationship monogamy vs. playing the field. In those markets where buyers are fiercely loyal and use the same supplier every time, the value of a marketplace is reduced.
3. Higher frequency When evaluating the frequency, it’s important to differentiate between how often a buyer uses a service and how often they use the marketplace
4. Total Available Market (TAM) As with any new business opportunity, a proper TAM analysis is imperative. How big is the total available market and how much can you capture?
5. Transactional Being part of the payment flow when buyers and sellers need the marketplace to exchange money, the potential take rate is much higher than when transactions happen offline.
6. The ability to expand the overall market and create value. Virtually all marketplaces create efficiency, making it easier for buyers and sellers to find each other and complete a transaction. Leveraging a service marketplace platform can help enhance the ability to connect buyers and sellers, creating more streamlined transactions and expanding market reach.
TechStaunch’s experience in developing marketplace platforms
At TechStaunch, we had a chance to develop and are proud to present a marketplace website and app.
Allrites
allrites is the digital marketplace to discover, buy and sell the best global content Our client wanted a custom platform for different types of businesses to buy & sell unique licensed content in media and entertainment to various OTG platforms. We provided a solution with a customized admin panel & a customer-facing application for buyers to search from among 200TB of different titles & sellers to keep uploading new licenced data for their users.
Technology : Nuxt.js, Vue.js, Laravel, Algolia, AWS Services
Anymoment
Our client asked us to develop a SaaS solution Marketplace for booking all types of experiences. The task of the TechStaunch team was to create all the primary parts of the project, engineering, design, and documentation. We delivered a web application & a cross-platform app, reducing time and maintenance costs and reaching as many users as possible. We studied the target audience’s stated needs and applied our research into a cutting-edge experience marketplace app.
Technology : React.js, Next.js, Trullio Postcoder, Postgres
Custom Marketplace Development Step by Step
Discovery and business analysis: The team can understand your business needs and come up with a detailed estimation and roadmap of online marketplace development.
Prototyping: To perceive the core functionality and prevent future errors. At this stage, you’ll get the feel of the future platform.
Product design: To create the user journey with an application that's easy to use. And this is not only about beautifully designed menus and buttons but about an effortless and intuitive sense of control.
Development: With the use of trusted solutions and tools.
Testing: To ensure that the marketplace won’t crash under a load of users.
Technologies used in most marketplaces because they’re shown to be efficient and secure.
Backend: Node.js, Java
Frontend: React + TypeScript, Vue.js, Next.js
Hosting: AWS, Heroku
Data storage: PostgreSQL, MySQL, MongoDB
Mobile: React Native, Flutter, Swift, Kotlin
Ultimately, your tech stack will be defined by the project's specifications. If you want to discuss the list of technologies for your marketplace idea, simply schedule a quick call with our team.
Final thoughts
The future of digital commerce never looked more promising. The latest online marketplace trends discussed above offer businesses multiple opportunities. However, it would be a big mistake to try and keep up with all of them. It’s up to you to decide which marketplace trends in 2023 are important for your business and focus on them.
If you need assistance from a reliable online marketplace development company, feel free to contact us. We have delivered many successful e-commerce projects, and we will be happy to create one for you.
You might also be interested in reading our related blogs:
5 common mistakes when building an MVP
Web Solutions for Startups: Turning Ideas into MVP Development