Online Ecommerce Marketplace Development. Mobilunity Experience

Technologies are very closely connected to our everyday life and it’s impossible to imagine the life without them. Either it is medicine, biology, finance, fashion, or agriculture, or any other industry, people try to simplify the work and business operations, make them faster and more effective due to implementation of versatile new and existing technologies. It seems like even elderly people are aware of the new era of technologies development that contribute to our life, work, business. Businesses are increasingly looking to hire remote eCommerce developers to harness their expertise and drive innovation in their digital storefronts. To ensure the success of an online ecommerce marketplace, it’s often crucial to have a Shopify developer for hire on board, bringing specialized skills that enhance platform functionality and user experience.

In the realm of online ecommerce marketplace development, agriculture engineers play a pivotal role in creating specialized platforms tailored to the unique needs of farmers and agricultural businesses.

One of such revolutionary inventions is the development of digital marketplaces that would be impossible without technologies. You just need time and access to Internet to conduct your business, find partners, clients, help like-minded people find each other. 30-something years ago most of us would probably answer, that a marketplace is the place you go for fresh fruits and vegetables to buy from farmers, who grow them. The distinct features of traditional marketplaces were: diversity of products for sale, choice of sellers one could have business with, the ability to bargain and buy the goods for more reasonable price.

What Is a Marketplace? Answer from Marketplace Development Team

What does the same word “marketplace” mean nowadays? Well, since we live in digital era, a marketplace or online e Commerce marketplace moved to cyberspace and is now offering much wider variety of goods than just fresh fruits and vegetables.

The most prominent examples of online marketplace sites of our days are eBay® and Amazon®. To people, who are also in love with handmade products, Etsy® will be #1 website they know. Try asking anyone and most likely these two sites will be named. These are the most known and popular marketplaces, and our Company often receives requests which sound like “create a marketplace like Amazon®” or “develop online marketplace like eBay®” or “build online marketplace like Etsy®”.

The difference between marketplaces is not just in the products bought and sold there, but in different business models, different sets of services they offer their merchants and buyers, different market niches they occupy and this is far cry from a comprehensive list.

Definition of the Notions and Terms

Our post includes a number of terms relevant to marketplaces of different types, which may be somewhat unclear, so here are the meanings of the most popular ones.

ECOMMERCE MARKETPLACES – online platforms, which facilitate various financial exchanges (sell, buy, rent out, hire, invest etc.) between the users of these platforms (usually two parties e.g. seller-shopper, host-guest, startup owner-investor etc.) via variety of services (payment processing, escrow, shipping, customer support, user protection services etc.) and charge fees for provided services in return.

B2B MARKETPLACE (BUSINESS-TO-BUSINESS) – a type of marketplace, that facilitates the transaction of products or services between businesses.

C2C MARKETPLACE (CUSTOMER-TO-CUSTOMER, OR CONSUMER-TO-CONSUMER) – a type of marketplace, that facilitates the transaction of products or services between customers (source).

B2C MARKETPLACE (BUSINESS-TO-CUSTOMER) – a type of marketplace, that facilitates the transition of products or services from businesses to customers (source).

PAYMENT INTEGRATION – incorporation of various payment systems (PayPal, Stripe, WePay, 2Checkout etc.) into a marketplace, which enables transaction processing (fee payments, payments for products purchased/services provided, contribution to a fundraising campaign etc.) directly on the platform.

MCOMMERCE (MOBILE COMMERCE) – is the buying and selling of goods and services through wireless handheld devices such as smartphones and tablets. Known as next-generation e-commerce, m-commerce enables users to access the Internet without the need to find a place to plug in (source).

PEER-TO-PEER MARKETPLACES – web marketplaces that bring together users, who offer or are in need of a product/service, bypassing traditional offline services, and offering improved, quicker, cheaper and more convenient alternatives, oftentimes available worldwide.

MEMBERSHIP PLAN – a set of free or paid abilities given to a user of a marketplace, which are determined and specified by certain conditions, usually monthly, annual or listing fees.

AUCTION MARKETPLACE – is a type of marketplace, where auction is the main selling format. That is to say, a seller lists a product and sets a deadline rather than a fixed price, sellers place bids to the item, and at the end of the auction the one with the highest bid gets the item.

CROWDFUNDING PLATFORM – is a type of platform, which allows people to post their projects and raise money for their execution through fundraising campaigns with exact deadlines and financial objectives, when investors buy shares and become co-owners of the venture (equity crowdfunding), or pledge a sum of money and get rewarded upon the completion of the project (reward crowdfunding).

ESCROW – a concept in which a financial asset is paid at first to a third party who takes a guarantee of a safe deal between two other parties (in this case, buyer and seller/employer and freelancer etc.). The funds are held by the escrow agent (in this case, marketplace) until the buyer’s approval of obtained products or services (in this case, approval of a buyer satisfied with the product/employer satisfied with the job of freelancer etc.). Money, securities, funds, and other assets can all be held in escrow (source).

Marketplace vs Online Store

When we say “marketplace”, we mean online e Commerce marketplace. But what about online stores? What is the difference between them and why online stores lag behind marketplaces to some extent? Below you may find the comparison of a marketplace and an online store to have better understanding on how they differ.

Differences between online marketplace websites and online stores

As far as you can see, the main difference between an online eCommerce marketplace and an online store is the same as in real life. There are lots of different sellers offering their own products (or services) on a marketplace, while in online store there is usually one seller. Even if this seller offers different products starting from wine and ending up with electronics and home appliances produced by different manufacturers, this is still the same seller with the same pricing policy.

eCommerce marketplaces offer sellers a platform equipped with everything needed to run their business. Usually marketplace takes care of orders and payments processing while adding products, setting prices, filling all the necessary details, and shipping is up to sellers.

The benefit of marketplace for buyers is a good chance of finding what they need in one place, probably available from different sellers at possibly different prices, so they may choose the best option. Sellers in their turn do not have to take care of setting up their own online shopping platform, attracting traffic to it, investing into the platform development and maintenance, buying or renting the necessary infrastructure, spending money on SEO, building customer trust and lots of other different tasks that matter.

As for the marketplace itself, it gets the ability to concentrate on the services it provides to sellers and buyers, including customer protection program, flexible payment and shipping services, their own order processing and whatever they think would increase the number of users. However, marketplace always risks its brand, as the buyer, dissatisfied with the purchase, oftentimes blames both the marketplace and the seller he or she actually dealt with.

What Is the Cost of Building a Marketplace vs. Online Store?

If talking about an online store development cost, it will be lower than creating a marketplace. However, by considering the bunch of remarkable features that go with a well-built marketplace, you may decide to build one instead. eCommerce website development cost will be relatively higher as the development process involves a number of functionalities that correspond with each other.

It is a good idea to create an MVP first, a minimum viable product that will have very basic features. This way, you will be able to develop and test your marketplace to see, what needs to be improved or changed. Getting feedback from a group of test users will help you to save a lot of money and efforts. Thus, you will know in what direction to move with your marketplace for sure.

MVP development starts from $10,000, while the first version of the product can cost $50,000+. It all depends on the complexity of the marketplace that you want to develop, and the time frames of the development process. In contrast, online store development can cost you from $2,000. But we have already highlighted how limited such stores are in the functionality. However, if it covers all your needs, you can save pretty much going for the online store.

Types of Marketplaces: Classification

We use the following approach to classification of marketplaces: marketplace is where people sell or buy products or services. We do not consider platforms, where people do not buy or sell products or services, as marketplaces. Thus, we distinguish between:

• PRODUCT MARKETPLACES
• SERVICE MARKETPLACES
• PROJECT MARKETPLACES
• HYBRID MARKETPLACES

Product Marketplaces

Marketplaces where people turn to for products to buy are product marketplaces. Clear examples of product marketplaces are well known eBay® and Amazon® where hundreds and thousands of sellers offer their goods to millions of buyers, or a US-based and so far available in US only BriskSale®, a well-known AliExpress® – a Chinese-based online shopping marketplace.

Let us take three most known product marketplaces and compare them on some of major metrics. The three candidates for comparison are Etsy®, Amazon®, and eBay® marketplaces.

From the viewpoint of sales model, product marketplaces may be:

• Auction
• Fixed price sale
• Mixed type

Mixed type marketplace offers more flexibility to sellers. This attracts both those, who want to get definite amount for their products, and those, who would like to try getting more through users’ bids.

From marketplace business model perspective, marketplaces can be divided into the ones:

• With a monthly fee plus a commission (usually some percentage from each sale)
• With a monthly fee per item listed plus a fixed transaction fee regardless of the transaction amount
• Totally free for sellers (BriskSale® is totally free for sellers, though may assign a reasonable fee for BriskSellers – people who find buyers for sellers’ goods)

Going further, eBay® and Amazon® are classic examples of C2C marketplaces. However, there are B2B marketplaces oriented towards the companies, that buy goods and services necessary for running their business. B2B marketplaces include: ThomasNet.com®, Australian TradeKey.com®, OFweek.com® and many others.

Service Marketplaces

Marketplaces people turn to, in order to search for and offer different services, are service marketplaces. This is where you go if you need transportation services (Uber®), household, repairing services (TaskRabbit®, Zaarly®) and specific IT services (Freelancer.com® or Upwork®), even car rentals and apartment rentals (Getaround®, Airbnb®) or medical/beauty services (ZocDoc®, Treatwell®).

As you can see, services provided by service marketplaces are widely different (and not all of them are actually websites, some are connected with marketplace app development), so we decided, that it would be relevant to single out subcategories – professional and rental marketplaces.

Let’s take a look at the specifics of the well-known professional marketplaces: Freelancer.com®, Upwork®, and Guru®.

Project Marketplaces

Another group of marketplaces are project marketplaces. Project marketplaces arrange fundraising (mostly crowdfunding) for startup projects from the people willing to participate in project’s funding. In return, backers of the projects may get specific privileges like using the final product or a certain amount of shares etc.

The biggest online marketplace of this type are Fundable®, Kickstarter® or Indiegogo®. Let’s see the major metrics of these three project marketplaces.

These are the three groups of marketplaces as we classify them. However, some marketplaces do not fit any of the above-mentioned categories, since they offer both products and services online. Therefore, one more category can be singled out – hybrid marketplaces.

Hybrid Marketplaces

Let’s take a couple of such marketplaces – Craigslist®, Oodle®, and OLX® – and compare their characteristics in the table below.

Since product, service and project marketplaces are somewhere different in terms of functionality they provide and feature sets available, the table below helps see the difference between them based on some of the features. This table is made up purely on the basis of the marketplaces we analyzed for this post and the “+” here means presence of a certain feature in at least one marketplace of the category. If you are in need to build a marketplace website, feel free to use it:

Common features of different types of marketplaces

How to Build eCommerce Marketplaces? Use Cases

Use cases and use case scenarios are vital aspects to think through, as they give deeper understanding of possible user activity, and thus enhance the overall logic of any application. Naturally, use case scenarios depend on the niche a marketplace platform is operating in, and on abilities it is going to provide. Use cases are the specific targets the user can reach while working with a marketplace. You should always keep in mind, if you build a marketplace website, that use case scenarios are the ways to achieve these specific targets. Let’s take a look at possible use cases of different eCommerce marketplaces and most possible types of marketplaces.

Product Marketplaces

Regular users of product marketplaces are seller and buyer. The goal of a seller, or the use case of a seller may be to make a listing and to sell a product. While the use case of a buyer is to make a purchase.

Service Marketplaces

The users of service marketplaces are typically professionals, vendors or freelancers willing to offer their services, and employers, who are looking for experts to perform some tasks. Their use cases will be finding a job and getting the work done. Another option might be accommodation or car rental marketplaces, where users are hosts and guests or car owners and drivers. The use cases of the first two will be renting out an accommodation and finding a temporary place to live. In case of the latter ones, the use cases might be renting out a car and borrowing a car for a definite period of time.

Project Marketplaces

Common users of the project online marketplace sites are project owners and backers, whose use cases are raising money for the project fulfillment and investing money into a project for getting a sort of profit in the future.

Hybrid Marketplaces

Hybrid marketplaces can be oriented at more than just two types of users. They are usually a mixture of the first two types of marketplaces and consequently the most likely users of hybrid marketplaces are seller – buyer, vendor – employer, host – guest with all of the relevant use cases and use case scenarios.

Wine Industry Online Marketplace Development by Mobilunity

A good example of a complicated well-structured marketplace is wine industry platform developed by Mobilunity. It is a sort of extended CRM system that manages interaction of hundreds of retail resellers with a large number of retail vendors, and is administrated by our company’s support. Our development team was aimed at building a coherent and secure system to pull the necessary data out of numerous third-party websites and perform multiple other functions. If you are interested how to hire marketplace eCommerce developers at Mobilunity for database development companies, feel free to drop us a line.

The marketplace was created to fulfill user stories of a retail reseller, retail vendor, customer support agent, and consequently enable a list of features such as registration, quote request placement, placing order, paying via PayPal, Skrill, 2checkout and Bluesnap, tracking order status, getting order/delivery status update, contacting via email, arranging emails into subject “threads” and a lot more.

A wide range of technologies were used for frontend and backend development of the marketplace. Our project manager together with the developers tried to choose the most suitable tools for a project of such complexity:

Technologies Mobilunity team used to build Wine Industry marketplace

The online marketplace development process required engagement of a project manager, designer, 3 backend PHP developers, 2 frontend developers and 2 QA engineers. The PHP marketplace development work load was broken up into 20 modules, each enabling a particular function of the platform. In future we also plan to create marketplace app for this platform.

“Building such a sophisticated system from scratch was an exciting and challenging experience.
We have not stopped though and our team keeps improving it, eliminating
the weaknesses found after release and looking for more effective solutions.”
– Sergey, Project Manager

A number of challenges, which occurred while developing the marketplace had to be overcome by Mobilunity team:

• Database experts optimized system logic to enable solely MySQL requests, leaving out PostgreSQL requests, and improve database indexing. This eliminated slow system loading, which is a common problem for systems serving thousands of users.
• Another issue connected with the system overload was elasticsearch overuse, thus our specialists decided to host elasticsearch on a separate dedicated server. According to Mobilunity marketplace developer, elasticsearch is one of the systems, which requires very accurate handling.
• Viruses and malicious codes were considered to be main risks to the marketplace, as system constantly uploaded files of the clients onto the platform. In order to prevent infections, development team limited types of files, that could be uploaded, disabled outside code execution, and implemented internal algorithms to scan malware.

In order to boost conversion, better understand the users and optimize work of customer support, our team integrated automated triggers into online chat scenarios. Here are examples of some of them:

Automated triggers integrated into the marketplace built by Mobilunity development team

Having some experience in building marketplaces, our team has tailored the solutions we usually provide to the specific needs of online marketplaces. Today Mobilunity offers a wide range of services for custom marketplace development, hiring Magento developer, maintenance and promotion. So feel free to contact us and hire marketplace developers!

Services and solutions Mobilunity provides for online marketplace development

Hire Marketplace Developers for Building Online Marketplace Sites at Mobilunity

Mobilunity specializes in web and mobile development and assists projects of diverse business niches. Having developed a few online marketplace sites, we know firsthand how much effort it takes, how many resources, people and what technologies are usually engaged.

The structure of the online marketplace website depends on and is preconditioned by various aspects closely connected with business strategy. That is why, while settling on the architecture of a marketplace, one has to clearly understand their business. Giving answers to the following questions helps a lot:

WHAT services is the marketplace going to offer?

This is most likely something obvious to the entrepreneur, who is struggling to build a marketplace, but this is actually one of the most vital questions to consider, since the answer first and foremost determines the global structure of the marketplace. Airbnb®, that provides accommodation rental services and online auction marketplace eBay® look completely different, to give an example.

WHO is going to use the marketplace?

Understanding the potential users and their expectations not only enhances the UI and upgrades the logic of the platform, it also splits the whole idea of the marketplace into a number of tasks the platform is to perform, or abilities it is to offer the users. These tasks and abilities along with user stories help define the functionality of the online marketplace.

HOW are the tasks of the marketplace carried out?

Answering this question helps plan integrations, plugins and APIs to be used and implemented in the marketplace development process.

Building an online marketplace is not impossible, but is not a piece of cake either. The only working solutions here are having profound understanding of your business and getting support of an experienced team of developers, who would take into account all your requirements, suggest using most suitable technical solutions and provide seamless operation of the marketplace platform with the help of cutting-edge technologies.

Hire skillful developers from Mobilunity to build a profitable online marketplace platform!

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Written by

Anastasia Stefanuk

Anastasia Stefanuk, a renowned content writer specializing in outsourcing and outstaffing developers, has made significant contributions to Mobilunity.com, a leading IT outsourcing company. With her profound knowledge in the field, Anastasia creates informative content that serves as a valuable resource for businesses seeking cost-effective and efficient solutions for their development needs.