Why build a marketplace app?
Marketplaces have become the primary place for people to buy products. They’re beneficial for everyone: sellers, buyers, and marketplace owners. Thinking about marketplace app development, then this article will be useful for you.
Sellers enjoy having a place they can sell their products without having to put lots of effort into marketing. It’s way faster and easier to put your product on an online platform than to create your own eCommerce website or app and then struggle to get traffic, investing thousands of dollars in search engine optimization (SEO), app store optimization (ASO), and advertising.
It’s easier to sell a product on a marketplace because the target audience is already there.
More and more companies prefer to sell their products on marketplaces: they gain audience instantly and don’t spend budget on promoting their own retail website
Buyers like to save time and money by buying products on marketplaces.
They enjoy having lots of options for different prices and the ability to compare products and buy everything in one place without having to browse dozens of separate ecommerce shops.
You, as the owner of a marketplace, have lots of effective ways to generate revenue. You can get money from advertising, and of course, you can charge a percentage for each deal. Another business model involves seller subscriptions, which allow merchants to post a limited number of goods on their profiles.
Marketplaces are currently the most profitable form of online retail business.
Marketplaces are a great place to sell products not only for online shops, but for individuals as well
This type of online retail is especially popular in the United States, which means that other regions have lots of potentials.
To compete with existing marketplaces, you need to be mobile-first. For this business, having both a website and a mobile application is a must, as people make over 50% of their purchases via mobile phones. Mobile websites are also a great option, but they aren’t nearly as responsive and convenient as mobile applications.
If you don’t yet have a marketplace you’d like to expand to the mobile market, it’s a good idea to start from a website and deploy it as fast as possible
Marketplace app development: key challenges & solutions
Building a marketplace is a lucrative idea, but like any business, it comes with both technical and business-related challenges. What do you need to prepare for? Let’s explore.
Fraud and chargebacks
Each marketplace attracts fraudsters that sell counterfeit products or straight-up deceive users by not sending the products that were paid for. Some buyers try to trick the marketplace as well by damaging goods themselves and then requesting chargebacks. Your marketplace should have clear rules for any aspect of the deal between a seller and a buyer, to avoid these issues.
To detect unreliable and fake sellers, use special fraud-detecting software or hire moderators that will check new listings and verify sellers’ identities.
Security
Security is a common issue for all types of software, and you should invest in it as well. A marketplace is a service that holds lots of sensitive information and handles the banking info too. Use secure payment gateways to avoid leaking the financial information of your users, and do regular security checks of your whole system.
Logistics
Logistics is a challenge for all e-commerce and delivery services. You need to offer multiple delivery options to your users, and make sure that each order reaches its destination in a predictable period of time. You should also deal with returns and replacements of the products. Partner with the local logistics services and use their APIs to track the packages and notify your users about the delivery status in real time.
Search
Search is the most important feature in a marketplace, and you absolutely need to get it right. Marketplaces connect thousands of sellers with thousands of buyers, so it’s easy for both parties to get lost in this ocean of products and services. There are two ways to approach this challenge:
Centralized search. You narrow the options for buyers and sellers based on certain criteria like geolocation. This type of search is best for on-demand services like food delivery or taxi services, where you show only the sellers in a certain range away from a user.
Decentralized search. You give your users all the tools like filters and categories, so they can narrow down the search themselves. If your platform has lots of similar products, implement recommendations, price comparisons, and other features to make the search process easier.
5 Types of marketplaces
Here are the 5 most common categories of online marketplaces:
On-demand. This type of marketplace provides users with services that are in immediate demand by customers. For example, clothing rental, car rental, or home delivery of groceries.
Managed. Managed marketplace always has an intermediary who intervenes to ensure the proper functioning of the marketplace. The intermediary provides support, logistical analysis, and maintenance.
Community-driven. Community-driven marketplaces gather independent retailers and brands on its platform.
SaaS. A SaaS marketplace allows users to build their own page within the marketplace network. However, it usually has sales commissions.
Decentralized. In a decentralized marketplace, all power is in the hands of the sellers. There’s no operator to control the platform, it has a P2P system: anyone can enter to sell and buy.
The perfect marketplace mobile app: Must-have features
Every marketplace involves several user roles, so you should take this into account when you create a marketplace app. These user roles are:
Merchant
Buyer
Administrator
You can either combine seller and buyer roles into one application or make two separate apps. For administrators, you’ll need a separate web application, preferably for desktops.
Onboarding
The onboarding process should be easy and clear. You can let people sign up with emails or social media profiles.
The onboarding logic will depend on your app’s structure. If you have one app with two different user roles, allow people to choose to create a seller or a buyer profile.
Another option is to combine these two roles in one profile so that a user can both buy and sell stuff through the same account. Or you can create two separate apps, but that’s rather uncommon for mobile marketplace apps.
Just after the onboarding stage you can add an interactive tutorial on how to use your app’s features and how to manage user profiles.
Personal profile
Users in both roles need to have personal profiles. A buyer’s profile should contain information about the user, their favorite items, current and past orders, a payment method (for example, a credit card), and settings.
Sellers should be able to see their own listings, the number of product views, and the number of people who have favorited one of their products. All users should see incoming messages and chat history. I’ll talk about these features more later.
Settings
There should be a short list of settings that allow a user to customize push notifications, personal information, and so on.
Listings
Listings are a core part of an application. They should showcase the products, including their names, pictures, and ratings. Pagination is crucial for listings: it allows the application to load information faster because it separates data into small chunks and loads it gradually.
Recommendations
If you want to drive sales in your application, you should not only showcase what’s available but make suggestions to users. You can base these suggestions on two things:
Analysis of a large data set to determine what might be interesting to an individual user based on their previous searches and items they’ve added to favorites
Products that were paid to be promoted on the main page of your app in the recommendation section
Categories
You should include categories in your mobile app for marketplace to make search more convenient for users. The categories will depend on what your marketplace is about. Be sure to make them logical.
Search and filters
Search and advanced filters are crucial for a marketplace app. The best practice is to make search predictive. Aliexpress, for example, shows the number of results for a certain query, allowing a user to choose a query that will provide them with more options.
Filters by price, delivery type, rating, and so on are also an important part of any application that has anything to do with choosing products.
Product profiles
In product profiles, a buyer should be able to find all necessary information to make a purchase, including an item’s name, photos, a description, average rating, reviews, and characteristics.
Favorites
Allow users to add favorites so they don’t lose a product they like and are considering purchasing.
Ratings and reviews
Ratings and reviews are a must. Most people won’t even buy a product if there are no reviews, so this is a must-have feature. Ratings can come in lots of forms, but a five-star rating system is the most popular now. You can come up with something more original, but make sure the ratings are still clear for users.
Shopping cart
A shopping cart is necessary for any retail mobile application or website. Allow users to add products from different sellers to their shopping cart and show the price of all products combined. Don’t forget to include coupons, discounts, and any other loyalty program attributes if you have them.
Payment gateway
Checking out is the next step a user will take after adding products to a shopping cart. To avoid shopping cart abandonment, make sure it’s fast and easy to pay. Don’t sacrifice security though, as it’s a primary concern for people who shop online. Be sure to choose a reliable payment gateway that will meet both your needs and your users’.
Delivery tracking
If you have a marketplace, delivery will probably be the responsibility of sellers. However, you should ensure that sellers send goods through a trusted delivery service. In any case, both buyers and sellers need to see the parcel delivery status in your application. This will make your service more trustworthy and convenient to use.
Order status and confirmation
Order status and confirmation helps sellers manage orders and see which can be considered closed. After a buyer confirms an order, they should be asked to leave a review.
Push notifications
Push notifications let your users know all about their orders, remind them of abandoned shopping carts, and inform them of any price changes or discounts. Rich push notifications are the best option for marketplace mobile apps because you can attach media to the notification. This makes it more visible and enticing to click on.
Analytics
Analytics is crucial for any application, and you should include it in your MVP prototype even if at first it seems useless. Analytics gives you an idea of how your business is doing, what parts of your strategy are working, and what isn’t performing as well as you expected. Analytics can help you find your niche and control your business development.
Profile statistics
Sellers on your platform should have access to statistics that give them an idea of how interested the audience is in their products. Minimal statistics should show product views and the number of people who have added a product to their favorites.
Product admin panel
To manage a shop within your platform, a seller needs to add photos, descriptions, categories, and prices and edit all this information.
A marketplace relies on trust. Your sellers need to trust you, and buyers need to be sure of your reliability as well
The tech stack for a marketplace
There are lots of technologies you can use to build a marketplace application. It requires several separate software products: a buyer app, a seller app, a backend part, and an admin panel for your moderators and administrators.
You can build a single app for sellers and buyers, just add two different profiles with different functionalities. In most cases, you’ll also need a web version of your marketplace so that users can access it from their desktop computers or mobile browsers. Let’s discuss the technologies for each part of this infrastructure.
Frontend technologies
Developers use HTML5, CSS, and JavaScript libraries (Angular, Vue, React) to develop the front end of marketplace websites.
Backend technologies
The most popular programming languages used for server-side development include PHP, Ruby, Java, and Python.
Operating systems
Selecting an operating system (OS) is the first decision you need to make. There are four major operating systems today:
Android
Windows
macOS & iOS
Linux
Web server
The two main open-source and free web servers are Apache and Nginx.
Databases
Databases are a vital part of the server ecosystem that allow multiple data points to be maintained and processed. The most popular databases are:
MySQL
MongoDB
DynamoDB by Amazon
Firebase by Google
PostgreSQL
Storage
The most popular storage solutions are:
Amazon Simple Storage Solution (AWS S3)
Firebase Storage by Google
Programming languages
These are the main programming languages used in website technology stacks, with associated frameworks in brackets.
PHP [Laravel]
Java [Spring]
Python [Django, Pylons, Flask]
Scala [Play]
Mobile technologies
For a mobile app, you can choose either native or cross-platform development. Native frameworks like Java and Kotlin (for Android) or Swift and Objective-C (for iOS) are perfect for large applications with complex business logic. They can use all the possibilities of a platform and devices, but you need to develop separate apps for each platform.
Cross-platform technologies on the other hand are less advanced, but you need only one app to be present on both Android and iOS devices. Out of all cross-platform technologies, I’d recommend Flutter, as it boasts great performance and easy maintenance.
Third-party services
Oftentimes, a marketplace website needs additional tools to meet business needs. To do this, developers integrate third-party services into the code of an online store. The most popular integrations include:
Payment gateways
Analytics tools
Shipping modules
CRMs
Social networks
Multi-vendor stores such as eBay and Amazon
Integrations such as accepting alternative payment methods can make your customer service more convenient and increase your conversion rates. Here are some of the payment systems you can integrate:
Stripe
Authorize.Net
PayPal
Braintree
Analytics tools display important business metrics like the conversion rate, customer lifetime value (CLV), bounce rate, and cart abandonment rate. Examples of analytics tools:
KISSmetrics
Piwik
Hotjar
Woopra
Delivery modules are important for online stores, as they inform customers about shipping costs and the delivery time of their orders. Here are some examples:
ShippingEasy
Shippo
Sellbrite
ShipStation
Integrating a CRM is also popular, especially if the online store has a lot of customers. A customer relationship management system helps online store managers collect customer data such as names, email addresses, phone numbers, and purchase histories. This integration is useful when analyzing customer behavior based on previous purchases.
The most popular CRM integrations among our customers are:
Salesforce
Zoho
InfoFlo
Microsoft Dynamics