Over recent years, the idea of online marketplaces has gained a lot of traction and popularity. Two of the biggest names in e-commerce, Amazon, and AliExpress, are prime examples of successful online marketplaces. Both giants bring in billions of dollars in revenue every year, without having to burn money on manufacturing, distribution, or other parts of the supply chain. Marketplace applications add a whole different dimension of convenience and engagement to the equation.
Building an Online Marketplace App
We live in an increasingly interconnected digital ecosystem. Technology has evolved to a point where it has penetrated the vast majority of the global population. This has ushered in a new era of convenience, where people like my neighbor can order groceries, get entertainment, and connect with people. Devices like smartphones allow us to access the internet virtually anywhere, helping us solve problems with Spectrum 101 set-top boxes or working on a research paper. So it was only a matter of time before the internet brought producers and consumers together. This blog explores the best approach to building an online marketplace app for your business.
The Difference Between an Online Store and a Marketplace
Before we can move on to discussing how to build an online marketplace application, the first step is to understand what a marketplace is. Both online stores and online marketplaces are iterations of e-commerce models. But they differ in one very key area. A single seller operates an online store, which usually only lists items that the seller either manufactures or retails. Any purchase on an online store translates into revenue for just that single seller.
By contrast, an online marketplace opens the digital doors to independent sellers. That means third-party vendors can list their products and services on an online marketplace. In common examples such as Amazon, there is a large volume of sellers operating on a single platform. What companies like Amazon primarily do is earn a percentage of the revenue from every sale made on the marketplace. The more sellers a marketplace has, the more products and services it lists, and the more revenues it can potentially generate.
In a nutshell, the difference between an online store and an online marketplace is simple. An online marketplace allows multiple third-party vendors to use the platform and list their products and services. On the other hand, an online store usually belongs to a single seller that lists its own offerings.
Ideation
When people think about developing a marketplace app, they immediately jump to the coding and development phase. In fact, before app development begins, you need to carry out extensive research and material gathering. This is important to help you understand the process to take your marketplace idea to the development phase.
Conceptualize
You need to create an idea, in writing, that outlines your online marketplace app concept. One of the first things you need to consider the demand for it in your target group. That means identifying what that target group’s pain points are. This is where you need to do some digging. Carrying out competitor research, reading up on customer reviews, and even conducting your own surveys can help you out.
Look at existing marketplace apps you intend to compete with. Examine them closely, making notes on the features they have that you would like as well. You may also want to do some work on understanding the best visuals and design elements that influence buyer decisions. Depending on what your market is, there may be specialized websites that already have the research you need.
Filtration
The next step is to refine your original idea into a clearer concept. Take a look at your original idea and all that you have added to it. Don’t be shy about crazy-sounding ideas, you never know when you might have a winner. Nobody could have imagined a decade ago that saying “OK Google call Spectrum” would actually be a remote command, but Google Assistant still stands. The filtration part involves splitting your ideas into the following three categories:
- Must-haves or essential ideas that you absolutely must have on your marketplace app.
- Would-likes or ideas that do not core to the app, but add value.
- Non-essentials or ideas that you can put off indefinitely for a future time.
This part of the process allows you to separate the elements you want to implement on your platform first.
Modeling
The third step in the process is to figure out the model your marketplace app will follow. The most important thing to decide on here is the financial model. You want to understand what you need to charge the buyers and sellers on your marketplace. Also, you need to decide what payment methods you will include in your app. You appeal to a larger audience by increasing the payment methods you accept.
Another thing you need to map out very carefully here is the refunds and returns policies. One of the things to focus on here is clearly defining the extent of your responsibility in accidents, damages, or misconduct. It is usually a good idea to look into a fraud control system to protect your end customers from malintent.
Development
- Map out a development plan with deliverables and deadlines.
- Get a professional opinion on the features you want to include.
- Get advice on application security, including the integrity of both your idea and the code.
- input on the best anti-fraud practices and features to include.
- Clarify any support or modification roles in the beginning.
I always tell people, creating an online marketplace application is not hard. Creating a successful online marketplace application is another story, however, especially in the long-run. Spectrum makes a decent earning off its Spectrum TV Essentials simply because of consumers like the product. Similarly, running an online marketplace means the marketplace and app are your product. If you put in time, effort, and innovation in creating a good product (or app), the results will speak for themselves.