How Much Does it Cost to Build an Online Marketplace?
⏱ Reading Time: 8 minutes
With an improvement in the digital world, the competition of online businesses is on the peak. It, therefore, makes everyone change their business or marketing strategies to stand out.
And, when it is about the buyers, they are smarter and do not purchase right away. It proceeds until they review the product and services to the best.
So, because of the growing maturity of buyers and the need for more choices, they look for an overall online shopping experience. It provides more choices than independent stores.
Hence, keeping that thing intact, as a business owner, we advise you to the niche-oriented eCommerce platforms only. Undoubtedly, these platforms or the online marketplaces connect the sellers with the buyers. Also, this gives more convenience, flexibility, and choices.
Indeed, the benefits given by online marketers have made them widespread and accepted among all online shoppers. Henceforth, as a businessperson, you might not be aware of its in-depth understanding. So, hiring a WordPress eCommerce development company is advisable.
Picture 1. Online marketplace stats
What Is an Online Marketplace?
All in all, the online marketplace operates the same ways the online store operates. But, the factor that makes it different is that it solves the issues encountered by online shoppers.
Obviously, it lists all the products by the business/brand. But, in addition to that, the online marketplace permits several independent sellers to list the products/services.
Explicitly, all the online stores are now business-specific whereas the marketplace is business-neutral. Certainly, this online marketplace provides end customers the liability to select the best product. Generally, those are considered that fits in their aspirations and budget.
Significantly, the online marketplace has several listings of the same service/product. Definitely, these have much-required liberty and flexibility to pick a seller that provides the lowest rate.
Indeed, the marketplaces solve all the problems encountered by traditional online stores. Also, it saves the dependence on a marketing budget for the business. Moreover, it also saves customers from monopolistic business applications and offers several other advantages.
Notably, the online marketplace protects consumers from monopolistic business practices. However, it saves dependency on a marketing budget for brands and provides many different benefits.
What Influences the Cost of Online Marketplace Development
Generally, there are two factors that affect the final cost of creating and deploying the online marketplace. And these are: development approach and functionality.
Let’s find out their aspects so that you can examine how much cost the overall process will take.
1. Development Approach
It allows you to create the online store from scratch, or to use the already-built product.
This factor encompasses two options:
- Off-the-shelf Software
This is the perfect solution for those businesses that are waiting to create and launch the online store as soon as possible. Additionally, when you are leveraging the already-built products, then the options, like, testing, wireframing, and development get skipped.
- Bespoke Software
Specifically, the focus is centralized on creating an online store with personalized business logic. Also, it customizes the software as well. Besides, this option allows you to integrate all the mandatory and required functionalities.
Picture 2. Difference between off-the-shelf and bespoke software
The second factor that affects the overall cost is the number of features that you like to add and integration. Also, the features complexity factor cannot get missed. For your convenience, to know the approximate pricing, look at the table below.
Picture 3. Average cost of features and integrations
Mandatory Online Marketplace Feature Set
Notably, it does not matter which type of online marketplace you are about to create, there are two essential elements that you require:
- Administration panel
- User platform
Generally, the aim of the administration panel is to control the customers, payments, product inventory, and other important marketplace settings.
On the other hand, the User Platform fully relies on the business model. In general, this model has several dashboards for several user roles (sellers and buyers).
The features it binds are:
- Account page
- Authorization and security
- Customer support system
- Item listing
- Integrated payment functionality
- Search engine
- Shopping cart
- Reviews and testimonials
- Registration form
- Shipping functionality
Online Marketplace Core Features
Registration / Authorization
Surprisingly, these powerful features allow beginners to start leveraging your platform. The registered users can log in to their accounts and find out the best and list the products.
Picture 4. eBay sign in
Markedly, this function contains all relevant information about buyers and suppliers. Yes, the seller panel contains particular data, that includes the shipping and payment methods accepted by the seller and their product list, etc.
In addition, the buyer’s account is mainly about individual information, the capacity to examine past orders, and the wish lists.
It enables the sellers to provide their services or products. Also, this listing is made visible to all potential customers.
For any online marketplace, this is a necessary feature because it addresses navigation as an easy and less time-consuming part. In this way, the user can explore for goods of services given by the supplier.
The Product Page
In reality, this feature presents customers with complete knowledge of each sold item. Additionally, high-quality videos and photos, specific instructions make your platform seem authentic.
The Shopping Cart
It includes the products the customers have selected. Not to forget, the buyers can change the number of items to be purchased, delete items, check payment methods, shipping costs, etc. in this space.
Picture 5. The shopping cart feature
Basically, the function enables buyers to buy through various types of cards and various gateways. Besides, from multiple payment methods, you will make it possible for customers to accept the payment method that fits into their needs.
The Administrator Panel
Together with the above, it should have a feature for all business holders. Besides, the buyer of the platform can easily customize the settings for different vendor groups.
Additionally, its settings cover transportation and payment gateway and fees. Moreover, Administrators even can manage the filters, list, and categories of sellers.
In addition, it is also an imperative feature that encourages customers to select the most suitable delivery choice.
Overall Cost of an Online Marketplace
Building an online marketplace approximately costs around $41,200. Correspondingly, it is the figure based on a $50/h rate.
From the business analyst point of view, the cost is estimated on the basis of the sellers’ part, back-end, and admin panel. Identically, the cost evaluated is then multiplied by the number of hours by $50.
Picture 6. Total cost of building an online marketplace
Online Marketplace Benefits for an Entrepreneur
As a matter of fact, creating and launching an online marketplace is remarkably profitable for every entrepreneur. Considering this, with much flexibility in all business operations and the opportunity to experience various sources of income make it the best choice for all to grow. Below, there are some of the benefits of having an online marketplace.
Recurring Revenue Streams
Generally, the online marketplace receives a commission from the revenue on its platform, charger seller’s fee for categorizing the products. Likewise, they even hold large advertising sales on their platform.
Even though, the online marketplace is the businesses that can build endless revenue streams and possess advantages of the online monetization models in the future. Surely, the surety of revenue growth and sales makes it a feasible business opportunity.
High Popularity and Demand
Yes, we already had mentioned above that online buyers like more flexibility and freedom of choice when it is about purchasing. Also, the visitors choose those websites that provide several options on one product.
The marketplace is created to on-board several sellers and their products, expanding the range of services/products. The best part is, the online marketplace assists the marketplace to get advantages of high-popularity and high-demand among the potential customers (online buyers).
Several online marketplaces are supported by exceptional automation tools. Truly, the online marketplace owners have to do some after driving the marketplace. Overall, the responsibility for the operation lies with the seller on the market.
Nowadays, the online tools and technologies include payment, order processing, and customer management. Hence, it makes marketplace operations in return more efficient.
Identically, due to the lack of substantial investment demand, the market has rapidly expanded its scale with minimal investment. Since the marketplace owner does not have to spend in inventory. Accordingly, it can instantly expand the scale with minimum effort.
Apart from that, the overall focus is to be channelized on adding more vendors instead of building a product line. The growth process in a marketplace is streamlined as more vendors attract more customers and vice versa.
Generally, the online marketplace can cost you between $41,200 and $123,600. This very much depends on the region, complexity, and features that you want.
Saying that the online marketplace is the future of on-demand service and eCommerce business is not wrong. Our advice here is to consult the specialists for the launch and development plans – before planning to launch the online marketplace.
If you have some queries and suggestions related then let us know in the comment section below.
Marie Thomas is an IT enthusiast with 7+ years of experience in developing WordPress websites. Currently, she is associated with WordSuccor – Custom WordPress development company in the USA. She loves to keep abreast of the latest technologies and tools in the corporate market and believes in sharing knowledge gained through experience. Connect with her on Twitter and LinkedIn.
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