Marketplaces are all about sharing economy which is going rise up to $335B by 2025 as reported by PwC.
Well, it’s enough to look at valuations of Airbnb ($31M), eBay ($36.8B), or Etsy ($5.2B) to conclude the PwC report actually makes sense. A lot of sense.
No wonder that both established companies and young startups are looking into ways to become a marketplace or build one having just an idea.
In this article, I’ve tried to shed some light on how to validate a marketplace idea, what features to include, what staff you need to hire, and how much it can possibly cost.
How to Validate Your Idea?
In case you want to launch a startup and have an idea for the marketplace, a good thought would be to check whether it’s viable.
First off, the marketplace has to solve certain pains of the audience. To give an example, BlaBlaCar was created as a response to schedules and inflexible routes.
To find and understand those pains, you should perform research to find your target market and get to know it better.
Except for that, there are five questions you should be able to give a comprehensive answer to:
- Would you use the marketplace yourself and why?
- How often do you want clients to use your product?
- How clearly do users understand the benefits of your product?
- What is the total size of the market?
- Are there any dependencies on external resources?
A good idea would be to talk with possible users to ask what problems they have and how they solve them.
All this will help you to estimate approximate demand for the product you’re looking to build.
Features to Consider
Entrepreneurs and startuppers decided to build the marketplace typically follow one of the following scenarios:
- Create a Minimum Viable Product (MVP)
- Try to launch the platform with all the planned features
The first is perfect if you’re still not sure about the product’s viability and don’t have any funding to maintain costly development.
The second is a good option if you have enough time to enter the market and aren’t limited in money.
Possible MVP functionality
- User profiles and personal settings. Most marketplaces separate accounts of buyers and sellers, which is a good practice to keep the interface simple.
- Search and filters. Also applicable for most marketplaces offering products or services to users. They help find the desired item faster and so increase conversions.
- Built-in chats. Help both sellers and buyers to communicate and settle issues.
- Payments. Depending on the application’s architecture, your tech team should choose the payment gateway provider that fits best (like PayPal, Stripe, Braintree, and others). Each provider has different transaction fee policies.
- Reviews. They’ll make it easier for buyers to make a decision.
Possible advanced functionality
If you want to fill the product with more features before the release, here are some ideas:
- Wishlists
- Gift cards
- Custom push notification (e.g. seller published new item)
- Opportunity to manage items in bulk for sellers
- Advanced statistics for sellers (e.g. number of visitors, purchases, best selling items)
Team to Develop a Marketplace
Basically, you need a UI/UX designer and Web Developer (or two).
If the project is pretty complicated and you (or someone in your team) have no tech background to manage the development, be sure to hire a Project Manager, and Quality Assurance engineer.
You can either form an in-house team that’d work in your office space or hire dedicated developers working remotely to save costs on administrative expenses.
How Much Can It Cost?
It depends on the team size or price of the vendor you’re going to cooperate with. The price range can be somewhere between $30,000 and $150,000.
Guest article written by: Vitaly Kuprenko is a technical writer at Cleveroad It’s a mobile and web app development company in Ukraine. He enjoys telling about tech innovations and digital ways to boost businesses.