Want to know the marketplace app development cost to build the platform like Etsy, Amazon, or eBay? It’s a great idea because the statistics are astonishing: the number of active purchasers on Etsy in Ql in 2021 is 90.65 million, which is 89.9% higher than Ql in 2020. And it’s not even the most popular marketplace in the USA.
But there’s one question – how much does it cost to build an online marketplace in 2022? The development requires various services that aren’t cheap, and your idea may cost tens of thousands. For anyone who wants to know the cost of building a marketplace website, this guide shows the price feature-by-feature and the total cost across different regions.
Types of Marketplaces
Before we jump right into the costs, let’s see what marketplaces are.
There are three types of e-marketplace:
• Vertical that occupies one area or niche.
• Horizontal that offers goods from a few categories with a secondary character in
common.
• Global that offers items or services from a wide range of categories
Let’s take a more detailed look at them.
Vertical Marketplaces
They offer goods from multiple sellers but the type of items is the same. Vertical marketplaces are exclusive suppliers that offer specific goods and have topnotch sellers. For instance, on Zillow, it’s free to list a home for sale or rent. The platform works with many owners and agents/brokers, but their services incorporate purchasing, renting, or selling apartments.
Another bright illustration of the vertical marketplace is Thredup. According to 2021 statistics, the number of its engaged buyers is 1.24 million, and the number of active sellers is about 428 million. Document Thredup distribution center has over 100 million items processed. The number of offered brands is 35 thousand by 2021.
Horizontal Marketplaces
Horizontal e-marketplaces sell goods or services in several categories but with a single common characteristic.
For example, Couchsurfing works with and for travels, Etsy sells handmade items in eight categories.DogVacay offers different services but only to people with pets.
One more instance of horizontal marketplaces is a widely-used platform Poshmark. Forbes states that it is striving to market with a valuation of over $3 billion. The number of registered users is 70 million, and the total sum of purchased items from the moment of establishment is $4 billion. In March 2021 The Company announced that its net revenues are $81.8 million, which increased by 22% from the first quarter of 2020.
Global Marketplaces
Global marketplace offers a great diversity of goods – books, furniture, grocery, apparel, toys, software, appliances, and a whole lot more. They consolidate lots of market segments to satisfy more consumers. This type of online marketplaces is focused on customers whose priority is high speed and lowest price. There are many categories of goods, and sellers’ price offers are competitive. Amazon is a great illustration. Yep, it became famous for selling books, but today you can buy literally anything on
Amazon. eBay works in a similar way.
Everyone knows an incredibly popular instance of the global marketplace, which is
AliExpress.
AliExpress is expected to raise its cross-border clientage to 30 million by 2030. In January 2021, there were 528 million visitors on this platform. AliExpress direct traffic was 60% for the same period of time. In January 2021, there were 528 million visitors on this platform. AliExpress direct traffic was 60% for the same period of time. AliExpress is worth $3.63 billion as of February 2021.
We can also categorize marketplaces by target audience:
B2B (business-to-business) – websites that sell various products from one business establishment
to another. Multiple wholesalers are allowed to connect to purchasers to provide them with products/
services in bulks.
B2C (business-to-customer) – business provides products/services directly to customers.
P2P (peer-to-peer), sometimes called C2c (customer-to-customer) – websites are intermediaries
between product owners and sellers interested in
Tech Stack for a Marketplace Website
Development
To find out how much does it cost to build an online marketplace in 2022 you should come up with the
essential features and proceed to MVP development services. It’s a good chance, the product creation
will require to implement in-app search (technology: Elastic Search), payments (Braintree, Stripe), and
online chat (Firebase). And here are some other technologies we use for the e-commerce and retail
software development.
Frontend
Front-end is a client-side part of the website. It incorporates the whole interface, buttons, and menus
that users interact with directly. You can find an example of the front-end web app development
services solution stack below:
• Angular
• JavaScript
•WebStorm
Backend
Back-end is a server-side of a platform, invisible to the user. It accumulates, settles, and provides all the
essential data from the data access layer on request and is necessary to make all features from the user
side operate well. Here’s the tech stack example for back-end development:
• Nodejs
• EC2
• MYSQL
• Swagger
• Express 4
• Sequelize
Integrations
To implement the solutions into the product we usually use third-party services. An API integration
allows developers to connect multiple applications. APIS provide data exchange among their systems
and this way enables them to implement various tools into the product Here are some of the tools
mentioned above:
-53
– PayPal
– Stripe
– Amazon SES
– Twilio
Technologies we use to build marketplace websites
MVP Development: Core Features
It is highly recommended to create MVP since it really helps to answer the question about how much
does it cost to build a marketplace website. Starting a project with an MVP version is a common
practice. MVP comes only with the much-needed features, and you can add more sophisticated ones
on the way. After all, the faster you launch the marketplace, the quicker you start getting feedback. And
figure out what to add or improve. Let’s use Etsy as an example to show the features of an MVP
marketplace.
Before we start, we’ll split the feature list into two categories:
• Customer’s side
• Seller’s side
Time to check them.
Customer’s side
Registration
To get access to all the opportunities of the marketplace, users must complete the signing-up process.
To do this, they have to provide their personal info like name, email and set a password. What is more,
customers should agree on Terms and Conditions. Another primary feature for clients is the opportunity
to share feedback and ask questions through a Help Screen.
Here’s how the registration goes on a horizontal marketplace, Etsy.
The marketplace asks for the first name, email, and password. They offer social sign up via Google or
Facebook, and the links to Etsy’s terms of use and privacy policy are right there.
Registration on Etsy
User Profile
Authorized users will need to enter and edit their profile details. To illustrate, it may be adding or
changing a delivery address, subscription plan, payment method, email, or password. Furthermore,
they should be able to check their current/ previous order history.
Homeрage
The landing page is a calling card of the platform. The best way to develop the interface is to make it
intuitive and user-friendly.
Needless to say that the laconic sophisticated UI/UX design also plays an integral part here. Add the last
watched product section and relevant suggestions to your homepage. It is extremely convenient for
users. Another idea is to add a list of popular products to the homepage. That should help users make a
choice (or add something extra to the cart).
Advanced Filtering
To find the suitable goods faster, customers should be able to apply a system of filters (location, price
range, conditions, etc.).
How filtering system looks like on Etsy
Product Page
This page should comprise a detailed description of the product, some photos, videos, and price
Product details from a buyers’ perspective
Chat implementation
Customers are able to reach out to suppliers with the help of messaging to bargain, discuss shipping
details, or request extra information.
Shopping Cart
The list of products should be displayed here. Users may edit its quantity or remove them from their
cart. Users can check the price details, fees or discounts, promocodes, delivery and payment options,
and add comments. The next stage is proceeding to the payment method. When it comes to MVP, a
credit card or PayPal is sufficient.
How a shopping cart may look like
Administrating Tools
Clients are allowed to manage vendors by the following actions
– Searching
– Filtering
– Deleting
– Blocking
Feedback
The clients are allowed to leave a review and briefly tell about the cooperation experience with a
particular vendor.
Seller’s Side
Registration
The seller completes the registration process or signs in with existing social media accounts. After that,
the supplier is required to provide personal data:
•Company name
Phone number
– Address
Links to social media
Ratingsreviews
– Testimonials
How a seller’s page looks like on Etsy
Some types of e-commerce marketplaces offer to change the account type from a buyer to a vendor in
the profile. We’re going to discuss this feature later on.
Ads
To publish an ad, a supplier should categorize the item and provide an essential detailed description
that may incorporate current condition, price, delivery methods, available quantity, existing colors, size
range, etc.
Ads creation from a sellers account
Chat implementation
Vendors can communicate with clients via online chat to clarify the deal details.
Payments
Your MVP marketplace must allow sellers to withdraw their income utilizing various payment methods.
Sellers need to view payout details (like the amount earned) and have an option to add or change the
payout method.
Reviews
A section where the supplier is able to overview personal rating.comments and feedback left by the
customers.
How user reviews section may look like
Changing the Account Type
It’s time to talk about the buyer-seller switch I’ve mentioned. What if an authorized user decides to
become a seller? Do they need to create a second account? Many marketplaces offer a direct switch
from the buyer to the seller within the user’s account. It’s usually done for free, but platforms charge a
selling fee (Etsy charges $0.20 for listing).
Or they use the Amazon-like approach, offering a professional sellers’ account (Amazon charges
$39.99/month for that) + additional selling fee. So, users can change their account type in profile and
start managing their shops – pick a name, add items, set up billing, and so on.
Administrating Tools
Admin panel allows the seller to adjust settings for various purchasers categories, such as delivery
payment methods and price and manage goods. A standard MVP marketplace admin panel offers:
• User management. The list of users, the details screen, edit user option, delete or block user, create
an account manually, users search.
• Messages. Getting and answering messages from ‘Contact us’ form.
• Product management. Same as for sellers.
We’ve discussed a very basic list of much-needed e-commerce website features. Note that we did not
include integrations with payment systems like Apple Pay/Google Pay, favorites, or personalized push
notifications. These points should be discussed with vour software solution porovider.
So, let’s finally proceed to the cost of building a marketplace website estimation.
How Much Does It Cost to Build a Marketplace
Website
Cost to build a marketplace website like the one we’ve described is around $41,200. It’s the number
based on a $50/h rate (true for Central Europe, Estonia).
How did we get this number? It’s simple: the more hours devs spend on website development, the
more it costs. Our business analyst estimated how many hours it will take to develop a web
marketplace (including the sellers’ part, backend, and admin panel). Then to find out the cost to build a
marketplace website we’ve multiplied the number of hours by $50. And here’s where these numbers
come from.
How Much Does It Cost to Build a Marketplace
App (By Features)?
One more thing: in 2021, 729% of all purchases will be done from mobile devices. That’s why we suggest
adding an adaptive design that makes web pages render well on different devices, including
smartphones. We approximately estimated it as 30% of the frontend part, not including the admin
panel.
So in our case, adaptive web design cost is around 100-120h ($5000-$600). Total: 688h features + 136h
admin panel – 100-120h adaptive design = 924-944 hours or $46,200-$47,200.lt’s hard to tell the cost of
creating an online marketplace without any project details. That’s why the numbers above are
approximate. In general, a marketplace website may cost from $41,200 to $123,600 and up (without
adaptive design). It all depends on its complexity, features, and region where you hire developers.
Besides, the chosen hiring option is a cost-determining factor as well. There are the three main hiring
options you are able to choose from:
Freelancers Despite the fact that this option has the most decreased cost, with
freelancers you have the lack of the final product’s guaranteed high quality.
and compliance with your requirements as well as deadlines. They are great
for minor technical tasks, but not for a website creation from scratch implying
long-term collaboration.
In-house team Here, both employing specialists to assemble the team and managing the
project are your responsibilities. The cost of this option is the highest of all due
to the fact that it requires a lot of extra expenses, such as buying hardware,
paying salaries regulariy, renting office, etc. Yet, such a team is an excellent
option for large-scale projects creation and further support, so partnership
with them may last long.
Outsourcing
companies
Outsourcing your project implies tech-savwy specialists taking over all your
website development and project management tasks. You don’t have to
spend time on recruiting, as the team of experts with an in-depth experience
is already gathered. Besides, businesses often choose this option due to its
cost-efficiency, as you pay only for work done and can be confident in the
product quality. Central Europe is a region full of outsourcing companies with
talented specialists, so you should explore its market, especially, the Estonian
one. Specialists there demonstrate high performance meeting your
requirements and deadlines at a reasonable price with the guaranteed high
quality.
The product development is a responsible and complex project, which requires lots of attention and
conditions of various aspects. However, cost to build online marketplace can always be optimized,
provided that you apply to credible, reliable, and trustworthy partners with excellent portfolios and
reviews which will speak for themselves.
To give you an idea, here’s how much the marketplace website costs in 2022 in different regions (rates
are taken from Clutch):
• Central Europe -$41,200 (based on $50/h)
• Eastern and Western Europe -$82,400 (based on $100/h)
• USA- $123,600 (based on $150/h)
• Australia -$82.400 (based on $100/h)