How Much Does It Cost to Build an Online Marketplace? [Full Estimate]

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11 Feb 2020
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11 min
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Maria D.
Business Analyst

Want to build a P2P marketplace website like Etsy, Amazon, or eBay? Great idea: in 2018 alone, Etsy earned $603.69M. And it's not even the most popular marketplace in the USA.

But there’s one question – how much does it cost to build an online marketplace? Web development services aren’t cheap, and your idea may cost tens of thousands.

For anyone who wants to know the cost of building a marketplace website, this guide shows the price feature-by-feature and the total cost across different regions.

Types of Marketplaces

But before we jump right into the costs, let’s see what marketplaces are there.

There are three types of e-marketplace:

  • vertical — focused on one area or niche.
  • horizontal — offers goods from a few categories with a secondary character in common.
  • global – offer items or services from a wide range of categories.

Let’s take a more detailed look at them.

Vertical Marketplace

They offer goods from several vendors but of the same type. Vertical marketplaces are 'exclusive clubs' that offer a greater depth of products and have expert sellers.

For example, on Zillow, it’s free to list a home for sale or rent. The platform works with many owners and agents/brokers, but their services are all about buying, renting, or selling houses.

Vertical marketplace companies

Examples of vertical marketplaces

Horizontal Marketplace

Horizontal e-marketplaces sell goods or services in several categories but with a single common characteristic.

For example, Couchsurfing works with and for travels, Etsy sells handmade items in eight categories. DogVacay offers different services but only to people with pets.

Horizontal Marketplaces

Popular horizontal marketplaces

Global Marketplace

Global marketplaces have everything under one roof – books, furniture, food, grocery, apparel, toys, software, music, gadgets, and a whole lot more.

That's what makes global marketplaces special. They consolidate several market segments to cater to a broader audience.

This type of online marketplaces is focused on people striving for maximum speed and minimum price. There are many categories of goods, and sellers compete in price offers.

Amazon is the standard example. Yep, it became famous for selling books, but today you can buy literally anything on Amazon. eBay works in a similar way.

global marketplaces

Popular P2P global marketplaces

Tech Stack for Building a Marketplace Website

Building a marketplace MVP with must-have features? Most likely, you’d want to add in-app search (technology: Elastic Search), payments (Braintree, Stripe), and instant messaging (Firebase).

And here are some other technologies we use for marketplaces.

Frontend

  • Angular
  • JavaScript
  • WebStorm

Backend

  • Node.js
  • EC2
  • MySQL
  • Swagger
  • Express 4
  • Sequelize

Integrations

  • S3
  • PayPal
  • Stripe
  • Amazon SES
  • Twilio
Tech stack for marketplace website

Technologies we use to build marketplace websites

MVP Marketplace: Core Features

Starting a project with an MVP version is a common practice. MVP comes only with the much-needed features, and you can add more sophisticated ones on the way.

After all, the faster you launch the marketplace, the sooner you start getting feedback. And figure out what to add or improve.

I’m going to use Etsy as an example to show the features of an MVP marketplace. From both buyers and sellers’ side.

Time to check them.

1. Registration/Authorization

To fully use a web marketplace, users must sign up and fill in their personal details. They are often asked to enter the first name, email address, and password.

Plus, to buy or sell on the marketplace, users should agree to Terms and Conditions. And have a feedback form to ask questions. You’ll need to add a Help Screen for that.

Here’s how the registration goes on a horizontal marketplace, Etsy.

The marketplace asks for the first name, email, and password. They offer social sign up via Google or Facebook, and the links to Etsy’s terms of use and privacy policy are right there.

How the registration on Etsy goes

Registration on Etsy

2. User Profile

There are two user roles on a P2P marketplace MVP – sellers and customers – and these profiles differ.

We’re starting with the buyers.

Authorized users will need to update their profile details. For example, add a delivery address or a payment method, change the email or password. Or manage email subscriptions.

Besides, they should have access to the order history to check on or repeat an order.

User profile on Etsy

A user's profile on Etsy

Vendor pages should be easily-manageable, from changing the account settings to adding payment methods.

Now, the sellers.

Vendor pages should be easily-manageable, from changing the account settings to adding payment methods.

Plus, sellers may need to add some personal details:

  • company name
  • phone number
  • address
  • links to social media
  • ratings/reviews
  • testimonials
Sellers' page on Etsy

How a seller's page looks like on Etsy

Some types of e-commerce marketplaces offer to change the account type from a buyer to a vendor in the profile. We’re going to discuss this feature later on.

3. Homepage

The home page is the site’s face; make sure it looks awesome.

Here are a few nice-to-haves.

One thing all customers want to see is a clear navigation system. Think over a system of filters (location, price range, etc.), relevant suggestions, and don’t forget about UI/UX design.

Add last watched products to the homepage. It'll help buyers to pick them up faster without looking for the same item again and again.

Another idea is to add a list of popular products to the homepage. That should help users make a choice (or add something extra to the cart).

Filtering system on Etsy

How filtering system looks like on Etsy

4. Shopping Cart

In their cart, users check the price details, fees or discounts, delivery and payment options, and add comments.

They should see the list of goods added (an have an option to remove them), then proceed to purchasing one or a bulk of items. And choose the checkout method: PayPal or credit card is enough for a marketplace MVP.

Etsy's shopping cart

How a shopping cart may look like

5. Add Listings (for sellers)

We’re done with the buyers, so it’s vendors time.

Sellers need to publish and describe the products they offer. They should have an option to list them, create new items, add photos from all angles, and write a product description.

And, of course, change availability when the products are out of stock.

Add listing on Etsy

Adding listings from a sellers' account

6. Payout Management (sellers)

We’ve discussed payment methods for buyers, but what about sellers’ payouts?

Your MVP marketplace must let vendors retrieve their earnings. Sellers need to view payout details (like the amount earned) and have an option to add or change the payout method.

7. Product Details

Most marketplaces use photo slider to show the item from all angles. They ask sellers to write it's description, set the price and availability status, add warranty and delivery info.

How product details feature looks like

Product details from a buyers' perspective

And here goes the review section. Buyers want to know what people say about the product or seller, and some sort out vendors by their rates.

User reviews section on Etsy

How user reviews section may look like

8. Changing the Account Type

It’s time to talk about the buyer-seller switch I’ve mentioned.

What if an authorized user decides to become a seller? Do they need to create a second account?

Many marketplaces offer a direct switch from the buyer to the seller within the user’s account. It’s usually done for free, but platforms charge a selling fee (Etsy charges $0.20 for listing).

Or they use the Amazon-like approach, offering a professional sellers’ account (Amazon charges $39.99/month for that) + additional selling fee.

So, users can change their account type in profile and start managing their shops – pick a name, add items, set up billing, and so on.

9. Admin Panel

No doubt, you’ll need an admin panel to manage both buyers and sellers’ accounts.

A standard MVP marketplace admin panel offers:

  • User management. The list of users, the details screen, edit user option, delete or block user, create an account manually, users search.
  • Messages. Getting and answering messages from 'Contact us' form.
  • Products management. Same as for sellers.

That's it! It's a very basic list of much-needed e-commerce website features.

For example, I did not include integrations with payment systems like Apple Pay/Google Pay, favorites, or personalized push notifications.

So, how much does it cost to build a marketplace website like this one? Let’s see.

Сost of Building a Marketplace Website

Building a marketplace website like the one I’ve described costs around $41,200. It's the number based on a $50/h rate (true for Eastern Europe, Ukraine).

How did I get this number? It’s simple: the more hours devs spend on the website development, the more it costs.

Our business analyst estimated how many hours it will take to develop a web marketplace (including the sellers’ part, backend, and admin panel).

Then, we've multiplied the number of hours by $50. And here’s where these numbers come from.

Marketplace website cost by features
Feature Approx time (hours) Approx cost ($)

Sign up

11

$550

Sign in

27

$1350

Help screen

26

$1300

User profile

60

$3000

Homepage

89

$4450

Shopping cart

134

$6700

Add listings

165

$8250

Product details

41

$2050

Payouts

25

$1250

Change account type

60

$3000

Seller subscription

50

$2500

Admin panel

136

$6800

Total

824

$41,200

One more thing: in 2021, 72.9% of all purchases will be done from mobile devices.

That’s why we suggest adding an adaptive design that makes web pages render well on different devices, including smartphones. We approximately estimated it as 30% of the front-end part, not including the admin panel.

So in our case, adaptive web design takes around 100-120h ($5000-$6000).

?

How do we create a website appearance? Read in our ' Web Design Process at Cleveroad' guide.

Total: 688h features + 136h admin panel + 100-120h adaptive design = 924-944 hours or $46,200-$47,200.

!

It’s hard to tell a marketplace website cost without any project details. That's why the numbers above are approximate.

In general, a marketplace website may cost from $41,200 to $123,600 and up (without adaptive design). It all depends on it's complexity, features, and region where you hire developers.

To give you an idea, here’s how much the marketplace website costs in different regions (rates are taken from Clutch):

  • Eastern Europe. $41,200 (based on $50/h)
  • Central and Western Europe. $82,400 (based on $100/h)
  • USA. $123,600 (based on $150/h)
  • Australia. $82,400 (based on $100/h)

Cleveroad Expertise

Cleveroad provides software development services for 5+ years, and we know how to build B2B, B2C or P2P marketplaces that meet user expectations.

And I’d like to tell you about two P2P marketplaces we’ve built for our clients.

AYIO

Meet AYIO, a P2P marketplace that helps you find specialists in different fields – from travel to plumbing.

This platform comes with a complex search system, a custom payment account (so users get their pays faster), a real-time activity tracking of income and expenses.

AYIO web version

AYIO web version

Want to learn more? Check our case study and look through portfolio page.

LetsSurf

LetsSurf is a pioneer in connecting surfing enthusiasts with their future instructors. It’s very easy to find the perfect coach as there are several in-built filters (by location, price, board type, and skill level).

Besides, surfers can chat on the lesson terms, book them, and pay with just a few screen taps.

How LetsSurf looks like

How LetsSurf web version looks like

How much your marketplace costs?
Our BA team will give you the number. Describe your product, and we’ll estimate it for free.

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