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Blog / We Do /  How to Build an E-Procurement Marketplace: Technologies and Modules

May 10, 2017 - Anastasia

How to Build an E-Procurement Marketplace: Technologies and Modules

What Is E-Procurement Marketplace?

Using e procurement marketplace today has become a popular format for any government or commercial procurement. The development of information technology is currently taking place at such a rapid pace that the state and business should take this into account. E procurement portal allows users to get all the necessary information on one site, participate in electronic trading, quickly sell the product or service or get it. This is the reason for the demand for procurement management system.

Automated procurement system has a huge number of advantages over conventional, paper-based operations. First of all, it is transparency and high profitability. In addition, it is possible to significantly reduce the costs of potential suppliers to participate in procurement. There is no need for permanent notarization of documents and the supplier can participate in procurement without leaving the office, spending money for sending applications and personal presence that was previously necessary. Secondly, e procurement solutions make it possible to bring the transparency of the procurement process to a new level. Now, thanks to procurement marketplace, suppliers can view the offers of competitors, which guarantee equal opportunities for all participants. The application of this principle prevents various illegal frauds in the form of collusion between the participants, and makes the administrative pressure from the customer impossible.

Top 5 Procurement Marketplaces Everyone Is Aware of

Amazon.com is the largest online trading platform, comparable in popularity only to the eBay auction, which sells and purchases tens of thousands of various products every day. The main site of the company operates in the USA. In addition, the company also has divisions in France, England, Germany, Canada, China, and Japan. Initially created for the sale of books only, Amazon grew into a giant trading platform with a huge variety of products from fishing rods to guitars and from auto parts to designer handbags.

Development of Procurement Management System like Amazon

Screenshot of Amazon Procurement Marketplace

Etsy.com is a trading platform, which was created in 1995, and united creative people from all over the world. Throughout its existence, Etsy has attracted hundreds and thousands of outstanding creative people who have turned their extraordinary abilities into real money. The variety of items displayed on Etsy.com, most often made by hands, is amazing. There are jewelry, knitted clothes, personal care products, home interior items, paintings of little-known artists, photographs of novice photographers, magnificent earthenware, and unique masterpieces from ordinary wood.

Get Your Procurement Marketplace Like Etsy

Screenshot of Etsy E Procurement Marketplace

EBay is the largest online auction in the world. Here you can always find a huge range of various products: from food to cars, and sometimes even to incredible curiosities. Thus, one day, William Shakespeare’s manuscript “Prince of Tire”, that was saved during the Great Fire of London in 1666, was sold on this site. The price of the deal was more than impressive and constitutes 5 million pounds sterling.

E Procurement Marketplace Development Similar to eBay

Screenshot of eBay Marketplace

The international procurement system AliExpress is a popular place for electronic commerce between Chinese suppliers and buyers. A web resource can be compared to a giant market where sales transactions are made online. AliExpress is a great opportunity for sellers to export products from China to other countries. Foreign buyers choose the platform as the site eliminates the need to look for Chinese suppliers on their own and helps to solve host of problems related to the delivery and payment of goods from abroad very easily.

Professional Development of an E Procurement Application Similar to Ali Express

Screenshot of AliExpress E Procurement Marketplace

Prozorro is a supply chain management software, the use of which is mandatory for all Ukrainian government customers when purchasing goods and services for large amounts. It won the prestigious international award in the field of public procurement World Procurement Awards 2016.

Are You Looking for Purchase Order Management Software Like Prozorro?

Screenshot of Prozorro eCommerce Marketplace

Classification of E-Procurement Applications

There are several classifications of e procurement applications. Firstly, it is possible to distinguish the following types of marketplaces:

  • business-to-business, where enterprises provide goods and services for other enterprises (for example, AliExpress where Chinese factories sell goods to retail companies from over the world);
  • business-to-consumer, where business units sell goods and services for people (Booking.com, where owners of hotels offer their services to tourists);
  • consumer to consumer (Etsy.com where a deal is made between two ordinary people);
  • business-to-government (for example, Ukrainian recent achievement Prozorro).

Sometimes you can meet another classification, which divide marketplaces into independent ones, buyer-oriented, and supplier-oriented.

And the last classification is the most easy and is made according to the purpose of types of marketplaces and things they sell. There are:

  • product marketplaces, where different things and goods are sold;
  • service ones, where various services are offered (transportation services, household, car rental, repairing services, specific IT services);
  • hybrid marketplaces, where you can purchase goods and services as well;
  • project marketplaces are intended to help an investor and the initiator of some project to find each other.

E-Procurement Solutions: Modules to Use

Online Procurement System Development

Custom UI/UX design and development of marketplaces by Mobilunity

There are several solutions one can choose for e-procurement platform development. It is possible to purchase ready for use order management software. Another variant is to order custom development. Let’s go into details of these two offers.

Ready order management softwares are the best solution for startup businesses that want to work according to a classic marketplace model. This is a profitable solution for those who want to get the finished product. The main advantages of this option are that you pay once for the product, and the labor costs and time for implementation are minimal.

Custom marketplace development is a solution for serious business or innovative projects that do not fit solutions “out of the box”. Uniqueness is the main advantage of the custom trading platform. If you want your trading platform not to be limited in functionality (for example, it would be possible to arrange online auctions and tenders, modify the algorithms of electronic trading at will, etc.), it is worthwhile to focus on custom development.

Users of Procurement Systems

There are two general categories of users of such portals. There are suppliers and buyers, which can be both enterprises and private individuals from both of the sides.

The main purpose of the suppliers is to sell their goods or services in the biggest possible amount. Enterprises, companies and even private persons can perform as suppliers (for example, in the case of selling services on freelance platforms).

Enterprises, persons, and even the state can also act as a customer (e.g. on Prozorro website a business satisfies the needs of the state).

Therefore, using contract management software is maximally beneficial for suppliers, who receive a possibility to show their goods to a wide audience, and for customers who can make a choice from the wide range of offers and find the best.

Technologies to Create Marketplace

Here are some of the technologies and tools that are used for creation of purchasing and supply chain management software:

  1. Shopify is ready-made platform that allows you to easily create your own marketplace.
  2. Magento is the engine for creating trading platforms. It allows you to create several online stores, at the same time you can manage them from a single center. This is the main advantage of Magento CMS, which is appreciated by many site owners. When creating a procurement portal using Magento, you can easily use different currencies, in addition, if necessary, you can easily convert them. It allows you to create a convenient catalog of products with the ability to add categories and subcategories. Moreover, in the online store, created on the Magento CMS, you can manage prices easily.
  3. BigCommerce is a platform for custom development that allows you to transfer products from Amazon, Ebay to your own marketplace.
  4. Developing sites using Laravel framework is a solution to many problems. After all, this database allows you to create not only websites, business cards or trite single-page apps. It makes it possible to implement Laravel app projects even with non-standard functionality.
  5. Prestashop. It is a free solution that contains many modules for creating an online trading platform. It is convenient for a customer due to the ability to receive complex statistics, and developers appreciate the open source code. Modularity, SEO-optimization and the possibility of introducing updates are its main features.
  6. Arcadier is a simple and intuitive platform for creating multi-vendor marketplaces for services, rent, sale, or online products.
  7. Virtuemart is a free open source e-commerce solution for creating online stores. Virtuemart allows you to create an unlimited number of products and categories of products, and users have the ability to perform a quick search for products, manufacturers or categories due to filtering (price, discount, etc.). You will be able to set different prices for products of the same type for different categories of customers or marking the goods as “special” or participating in the sale. Each of the products can be assigned a different currency, and the component can automatically convert the price from one currency to another. In addition, users are given order history, the ability to manage addresses and delivery methods, purchase discount coupons.
  8. Symphony CMS  is a high-performance framework written in PHP 5. The framework is based on the Model-View-Controller pattern and its architecture uses other object-oriented programming patterns very actively.

This is not a complete list of platforms, technologies, and tools that can and are used for creating trading platforms, as each of them has its own purpose and functional features. In order to combine all the proper technologies, the best advice will be to contact an experienced developer or development company.

How Much Does It Cost to Create Automated Procurement System?

Any work requires a certain time, and the creation of trading system can involve several specialists and programmers. The cost of creating a marketplace can go up to several thousand dollars, and it is estimated based on labor costs: with the increase in the time for creation and development, proportionally the cost increases. Thus, the site will be created for at least several months, of course, depending on the final requirements for the product you want to receive.

Nevertheless, to make a little clarity, it is worth saying that creating a marketplace usually takes not one month and most of vendors work according to time & material model (hourly rate). Still, we have noticed that there is much better and more affordable solution that suits many business owners and helps them to get high-quality product and save money at the same time. This is the scheme we use in the work with our clients. We offer the services of our in-house remote developers at fixed all-inclusive monthly rate for a period a client needs. Thus, we don’t estimate the marketplace development, but allow them hire our developers for any of their projects. This is very cost-effective solution for our customers as the average net salary of Ukrainian developers (according to DOU) is about $1600-2000/month (still the rate depends on the stack and seniority of a developer). According to the data of Clutch.Co, the hourly salary of a developer in Poland and Germany is $50, in Australia and the US it can vary from $100 to $300 per hour. By the end of the month, these amounts will exceed the fee of Ukrainian engineers several times or even dozens of times.

Professional E Procurement Marketplace Development

Where to Apply?

It is possible to conclude that creating a procurement marketplace is rather beneficial and demanded business nowadays. We also proved that creating e-procurement application with the help of Ukrainian marketplace developers will be rather expedient. Mobilunity has wide experience in implementing such projects, so hiring our remote developers, you can be sure that you will save up to 60% and get the high quality product in the shortest possible time.

Don’t hesitate to contact our account manager right now in order to discuss details of your project and receive e procurement solutions from our dedicated developers!

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