How to Create a Marketplace Website: Cost and Resources

26 DEC 2018
11 MIN


Despite the great variety of existing marketplace platforms like Etsy, Amazon, or eBay, the creation of your own one is a good idea. Sure, under certain circumstances and with a well-thought strategy. According to PwC, the sharing economy, which peer-to-peer marketplaces are about, will reach $355 billion by 2025. Isn’t that a significant reason to give your idea a start?

Let’s delve into how to create a marketplace site, how to estimate your budget and what you can do right now to make your service prosperous.

How to start an online marketplace

Follow these steps to find out how to start a marketplace website:

  • Step 1. Research that includes diving into basics of building a marketplace business
  • Step 2. Validate your idea to analyze the market and then start a marketplace website efficiently
  • Step 3. Planning stage helps you draw up all requirements for your marketplace startup
  • Step 4. Development of MVP marketplace with basic features
  • Step 5. Build a right team to create a marketplace website from scratch
  • Step 6. Determine a final cost of marketplace website building
  • Step 7. Elaborate a marketing strategy to lead your marketplace website to success
how to start a marketplace website

Stages to start an online marketplace

See how we use performance management to increase work efficiency. Read How performance management helps us build reliable development teams

All these stages of marketplace software development have their peculiarities and winning strategies. Keep reading and we’ll discuss them one by one.

Research: Getting and validating your idea

So, you’ve decided to build your own online marketplace. Before you get down to choosing the right marketplace type, platform or technologies, take some time to research whether there is a demand on the software you want to build.

That is why the first step should be defining the value proposition for your potential users. As for marketplaces, it’s usually solving a real problem. For example, Airbnb solves the problem of expensive hotel rooms for travelers, BlaBlaCar is a response to inflexible routes and schedules, and so on.

When you define a problem worth solving, take a look at competitors and market leaders. In a broad sense, all potential niches may be already covered. So you will have to think narrower and find your focus in a preferable niche. For example, Amazon started by only selling books. In case, your idea seems perfect for you as you have the right background and industry-changing intentions but the competition is too high, narrow your focus, both geographically and in terms of the offered products or services.

The next step when you start your own online marketplace is to know your target audience. Careful analysis and research are worth efforts and time as in the result you get a segmented audience, the list of their expectations that can be easily turned into features, and prove of demand.

Take a look at a detailed article devoted to targeting audience research and analysis.

How to validate your marketplace idea

After you got an idea to build online marketplace of a certain type, it’s time to validate it in order to ensure that you’re moving in the right direction. Such kind of research takes a considerable amount of time but it pays off at it lets you avoid some of the common mistakes. So, here is a list of questions you should be able to answer honestly before moving to a planning stage.

  • Would you use this product and how often?
  • What is the feedback from the interviewed a group of potential customers
  • How well they understand the purpose of your product?
  • What is the size of the total addressable market?
  • How dependent are you on the external resources?

To answer the questions above, you will have to brainstorm with your partner(s) if you have one, gain feedback through interviewing your potential customers and make some manual research. Note, you shouldn’t involve your family and friends to the interview if you want to get unbiased insight and find out how to build a successful marketplace.


The planning stage is the foundation of your project’s successful delivery and performance. Every company organizes it in it's own way. As for Cleveroad, we set aside the planning stage of the entire development process, providing our customers with a tangible outcome. Here is what our customers get during the planning stage.

how to develop a marketplace website

Development project planning stage

  • A complete requirements list gathered and structured by our Requirements Analyst;
  • Market research report and recommendations;
  • Specification document which contains user stories, technical, functional and usability requirements;
  • Wireframes based on the specification;
  • The detailed estimate produced with the assistance of our software engineers, designers and project managers that provides an estimation of every feature implementation time.

Consider ways to manage successful project delivery. Read Components of successful project delivery and how to control it

Later on, our customers have a choice whether to continue cooperation with our website development company or postpone the development stage or switch for another service provider will all necessary documents. Considering the issue of how to create an online marketplace, let’s see in details what the price for a marketplace website consists of.

Development: How to build a marketplace website

There are usually two options for how to make a marketplace website:

  • Development from scratch
  • Development using one of the existing marketplace platforms

Each of these strategies has it's pros and cons. If you are limited with a budget of $5,000, you surely don’t want to spend money on design and development from scratch. So, the platform-based development is for you.

However, if you want to build a marketplace website that responds to all your business needs, focus on development from scratch.

Do you know that MVP is important for your business success? Watch our video below:

Why Should You Start Your Business from MVP?

Features for an MVP

User accounts, profiles, and settings

The two-sided marketplace website development implies the creation of two kinds of website users: Buyer and Seller (or Service provider and Service recipient) with their specific needs. Among the features that are important for Buyers are simple registration, well-designed navigation, search and filtering, and access to information about Sellers. In their turn, Sellers would appreciate features that let them manage their private and public information, create new offers of products or services.

Search and filters

It should be convenient for buyers to search for goods or services on your marketplace website. So, think over a system of filters (location, price range, etc.) and relevant suggestions.

Real-time chats

Choosing the product or service, buyers usually have some questions to sellers. It’s very important to let them get answers immediately and the best way is instant messaging.

Payment systems integration

Our main task as developers is to ensure complete security for both buyers and sellers, especially regarding payments. That’s why it’s important to implement transparent and trustful payment system like PayPal or Stripe.

Reviews and ratings

After the deal is over, buyers should be able to leave their feedback about it and rate the seller.

If you want to develop a marketplace website with more sophisticated features, here are a few ideas for you.

development marketplace

MVP marketplace features

Advance features for buyers:

  • Price comparison
  • Advanced search and sorting
  • Wishlist
  • Sharing in social networks
  • Gift certificates
  • Push notifications

Advance features for sellers:

  • Statistics of buyers’ behavior
  • Advanced products management

The team you need to create your own marketplace website

The project team that helps you to build a p2p marketplace consists of:

  • A project manager who knows exactly all the details of how to build an online marketplace and manages the processes and team members;
  • UI/UX designer;
  • Web developers;
  • QA engineers.

Check it out what you need to hire a dedicated development team. Read Guide for hiring a dedicated development team: insights from Cleveroad

If you are serious about building a marketplace website, you surely want to know it's development price even before the planning stage.

Price of building a marketplace website

So, what is the cost of creating an online marketplace? Roughly speaking, you may expect to be charged from $30,000 to $150,000 depending on the desired functionality and vendors you cooperate with.

Price of building a marketplace website

The price of building a marketplace website

Let’s review where these numbers come from.

Development cost is based on the development and non-development time required to implement product’s features. The number of hours is estimated with the regard of the complexity of features, including frontend and backend development.

At Cleveroad, we provide the precise numbers in the Detailed estimate document during the Planning stage. The document has a minimum and a maximum number of hours required to implement each piece of functionality. If you want to get a detailed estimate of your idea, please get in touch with our managers and they will eagerly help you. In case you don’t need the precise figures, you can try our app cost calculator to know the rough cost to build a peer to peer marketplace.

After you know how much time is needed, you can calculate how much money you’ll need. Just multiply the number of hours by your vendor’s hourly rate. Take a look at the following table that shows how your budget of a sophisticated and fully-functional marketplace project can vary by developers’ rates. The table includes the average time for design, project management, and quality assurance, as well.

Average marketplace website development cost

DesignationMinimum time (h)Maximum time (h)Average time (h)













Price at $30

Price at $50

Price at $150













You can read the details about what the hour rates depend on and how to choose a software development company for your website development in our blog post.

Post-development actions to make your custom marketplace successful

After the development stage, you expect to release your project. However, there is no need to rush. It’s important to think over how to start an online marketplace website effectively and how to attract first users.

Who these users should be: seller or buyers first? The best thing to do is to start forming the base of sellers who are able to suggest goods or services without expecting to get any sales at once. You should communicate with sellers before the launch and explain to them that your platform can become a permanent source of future income for them. Here is what you can do to find sellers:

  • Contact those sellers who are active on competitive marketplaces
  • Use business directories and Google search to find providers for your unique niche
  • Look through online forums and Facebook groups

While you let the providers be the first users of your marketplace website, it’s a good idea to perform some work with potential buyers and build loyalty to your platform in advance. There are a few tips on how to do it effectively.

  1. Set up a pre-launch landing page to gather emails
  2. Participate in topical discussions (online forums, communities, groups) and start mentioning your marketplace
  3. Contact influencers of your target audience and try to make them your early ambassadors
  4. Start your blog or online community in case there are no suitable communities

After you have a list of interested users, you are ready to launch. A well-prepared pre-launch stage can help your service get an initial boost and continue working on building supply and demand.

What has Cleveroad achieved in 2018. Read Cleveroad 2018: Another year of achievements

What can you do next to grow your marketplace after the launch? You will need to set up some KPIs to track the performance and find the areas for improvement:

  • Usage metrics, such as conversion rate and bounce rate
  • Transaction metrics, like provider-to-customer rate and repeat purchase rate
  • Business metrics, for example, customer acquisition, revenue, and ROI

By taking a close look at customers’ behavior, you will identify the areas that need improvement. So, now you know the basics how to build an online marketplace website. If you need our assistance, please, contact our managers. They will eagerly help you solve any issue.

Expertise from Cleveroad

Recently we have released a web solution (both iOS and Android apps are also available) called AYIO - a marketplace to find a specialist in different fields. It is a good service if something is broken, you need to repair it, and AYIO will help you hire a skilled specialist.

AYIO website

AYIO website

This social business platform was developed for one year, and it includes such features like complex search system, payments, activity tracker, scanning of documents, docs upload, and others. To find out more about the development process, you can check our case study and look through portfolio page.

AYIO platform benefits

AYIO platform benefits

Frequently Asked Questions

From $30,000 to $150,000 and up. Everything depends on the website functionality, design, and vendors you cooperate with.

You need to consider adding features for both buyers and sellers.

For example, sellers should be able to check their earnings, manage listings, see statistics of buyers' behavior, and have an option to chat with customers.

  1. Start with research. Study your competitors and their offers, and find out what your target audience loves.
  2. Draw up all requirements. What features you want to see, how many users you expect, how your website should look like.
  3. Find a reliable software development team. Hire in-house devs (work from your office) or outsource to a tech company.
  4. Calculate the development cost. And make sure you have enough funds to cover the desired functionality.
  5. Develop an MVP marketplace with basic features. It's cheaper to build and faster to release. Good, if you're only testing your idea or need the website fast.
  6. Create a marketing strategy to promote your website.

Platforms like Etsy charge a selling fee (Etsy charges $0.20 for listing). Amazon offers a professional sellers' account (for $39.99/month) + charges additional selling fees.

Some marketplaces offer premium listing, charge demand fees, or sell ads.

Basic features:

  • User accounts, profiles, and settings
  • Search and filters
  • Real-time chats
  • Payment systems integration
  • Reviews and ratings

Advance features:

  • Price comparison
  • Advanced search and sorting
  • Wishlist
  • Sharing in social networks
  • Gift certificates
  • Push notifications

If you have limited time, you may develop the website using one of the existing marketplace platforms.

But it works only for small-scale marketplaces with a couple of features. To make something more complex and tailored to your business, focus on development from scratch. To speed up the time to market, you may start with an MVP.

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