Please Rotate to Portrait for Better View !
eCommerce marketplace app header image

All you need to know to create a marketplace app

Taru M. Taru M.
Published: 02 Aug, 2022


Post-Covid, the eCommerce industry is on the boom. And so is the expectation of consumers from digital commerce. McKinsey and Company. observed that millennials, specifically in the USA, prefer personalization and value-driven products. As a result, niche marketplaces are gaining more popularity among apparel, sneakers, and home products. If they wish to thrive, marketplaces need to put equal effort into building services that allow sellers to create more differentiated value for their products. A marketplace app brings together sellers and consumers on a single platform. Thereby giving both the following apparent benefits.

  1. It gives businesses access to a more extensive customer base.
  2. Marketplace apps typically offer lower transaction fees than other e-commerce platforms.
  3. Consumers can compare prices and products relatively quickly.
  4. Sellers may benefit from the algorithms of a marketplace to increase the visibility and trustworthiness of their products.

It is pretty natural to get inspired by the success of Airbnb, Etsy, DoorDash, etc. And the data clearly validates that people engage a lot with marketplaces. But establishing a successful marketplace is no easy feat. In the end, technology, strategy, and marketing define the success or failure of online marketplaces.

marketplace app global leaders

This blog will give you an overview of marketplace app development. You will understand crucial concepts in the marketplace industry, essential features, and challenges you must be ready to tackle head-on.

What is a marketplace app?

A marketplace website or app is a platform that enables buyers and sellers to connect and trade goods and services. Marketplace entrepreneurs lay out the online infrastructure for product listings, checkout modules, secure payment gateways, and strategize to benefit sellers and buyers. 

Many different marketplace apps are prospering, each with unique features and offerings. For example, GOAT is a marketplace for sneakers and apparel, while SkillShare, Udemy, and Outlook facilitate educators to create their custom courses and sell them to people willing to learn.

When is the right time to build a marketplace? 

Covid has pushed people of varied digital literacy to move to eCommerce websites. Even to purchase trivial household items like toilet paper. Also, there is no dearth of innovative technological solutions to bring impeccable convenience. For example – Augmented Reality in fashion. So, rather than focusing too much on the ideal time. We believe the success of any marketplace depends on the type of products and services and how well it manages the supply and demand.

marketplace app USA leaders

To create a profitable space for your marketplace app among the giants, as Ryan Lee – Forbes Council Member, advised – startups must create ‘niche marketplaces’. These marketplaces have the opportunity to grow by catering to the specific and personalized needs of the buyers.

Types Of Marketplace Apps

Types of the marketplace by focus

Vertical marketplaces

Instead of selling various products to a vast range of audiences, vertical marketplaces offer products or services in a narrow niche. It helps you provide higher-quality, personalized products and services while standing out among competitors. Etsy is the most prominent example of a vertical marketplace that focuses on craft supplies, handmade products, and vintage goods. Other popular niche marketplaces – Are outlook, Airbnb, and Rover. 

Horizontal marketplaces

Unlike vertical marketplaces, horizontal marketplaces offer products and services to customers in various industries. They are considered a one-stop shop that can fulfill multiple customer requirements in one place. eBay, AliExpress, and Amazon are famous examples of horizontal marketplaces that offer a large variety of goods.

Types of marketplaces by the target audience

Business-to-Business (B2B)

A B2B marketplace connects customers with other retailers, wholesalers, marketplaces, and manufacturers. This type of marketplace assists you in expanding sales channels and distributing products and services to customers without upfront investments. B2B marketplace can automate the selling and buying process, provide a great customer experience, and improve the transparency of financial deals. Among the top B2B marketplaces are Alibaba, Amazon, and eWorldTrade.

Business-to-Customer (B2C)

The B2C marketplace model involves businesses and customers where the former sell their products and services not to other companies but directly to customers. B2C marketplaces are one-stop online platforms where customers can buy various goods online. For example – Fiverr, Teachable and Cameo.

Consumer-to-Consumer (C2C) or peer-to-peer (P2P)

The Peer-to-peer (P2P), commonly known as the customer-to-customer (C2C) marketplace, connects people with similar requirements, tastes, and incomes to share products and services. The concept of such marketplaces is that customers or peers can share products (like Etsy) or services (like Uber or Airbnb) in exchange for money or other products and services. P2P marketplaces help people optimize resources through renting, not buying. The incredible thing about this marketplace is that every peer can be a consumer and a service provider. Example – Library of Things and OLX.

Features of a marketplace app

As a business owner, you want to ensure your marketplace app has all the features it needs to succeed. An online marketplace is a great way to connect buyers and sellers, but there are a few key features that your marketplace app will need to follow:

A Powerful Search Function

Your marketplace app needs a powerful search function that allows users to find the products or services they’re looking for quickly and easily. Buyers need to see what they want on your marketplace. There should also be a way for sellers to promote their listings.

Categories and Sub-Categories

Your marketplace app should have a variety of categories and sub-categories so that users can easily browse through the available offerings.

User Reviews and Ratings

Allowing users to leave reviews and ratings for the products and services they purchase on your marketplace app is a great way to build trust and credibility.

Social Media Integration

Ensure your marketplace app is integrated with social media platforms like Facebook and Twitter, allowing users to easily share products and services they find on your app with their friends and followers. This is important for you to be able to promote your marketplace. There should also be a way for you to communicate with your users.

A User-Friendly Interface

Your marketplace app needs a user-friendly interface that is easy to navigate. Users should be able to find what they’re looking for without difficulty.

Secure Payment Options

Your marketplace app must offer secure payment options so users can make purchases confidently. This is important for buyers and sellers to be able to pay for listings. There should also be a way for buyers to pay for goods and services.

Customer Support

Ensure your marketplace app has a customer support team to help users with questions or problems.

Account & user profile management

This is important for both buyers and sellers to be able to create and manage their accounts. There should also be a way for buyers and sellers to communicate.

Listing, booking, and availability management

This is important for sellers to list their products or services. This is important for sellers to manage their bookings and availability. There should also be a way for buyers to search for listings.

How to create a marketplace app?

How to develop a marketplace app from scratch? This is a question that many entrepreneurs ask themselves when they are first starting out.

Here are the steps you need to take to develop a marketplace app from scratch:

Identify your niche

The first step is to identify your niche. What are you offering that is unique and valuable to your target audience? Your niche will be the foundation of your marketplace app, so spending some time thinking about it is essential.

Plan your features

Once you know your niche, you can start planning your features. What will your app offer that will appeal to your target audience? Make a list of all the features you want to include, then prioritize them based on what is most important to your users.

Find the right platform

Now it’s time to find the right eCommerce platform for your marketplace app. There are several different options, so take your time and choose the one that best fits your needs.

Headless or Monolithic approach

You can opt for headless architecture in which your store’s front end is decoupled from the backend. Thereby giving you more options and control for customization of the storefront. On the other hand, with the monolithic platform, you are limited to the pre-built themes, templates, and apps to extend the functionality. 

Complement with: 8 Headless Commerce platforms and selection criterion.

Design your app

The next step is to design your app. This is where you’ll bring your vision to life. Spend some time brainstorming and come up with a design that is both visually appealing and user-friendly.

Build your app

Once you have your design, it’s time to start building your app. Firstly, you need to decide between native or hybrid apps. After that, go for the best framework depending on the features of your mobile app and target audience. This is where we will help you with expert guidance. Reach out to our mobile app development company to discuss your marketplace app project with us. 

Test your app

Once your app is built, it’s time to test it. Test it on various devices and platforms to ensure it works well for everyone. Before launching, go through an eCommerce launch checklist to ensure everything is in the right place and in order. 

Market your app

Now it’s time to market your app. This is where you’ll need to put in the most work. Create a marketing strategy and promote your app to your target audience.

Analyze your results

Once your app is released, it’s essential to analyze your results. What is working well? What needs improvement? Use this information to continue to improve your app.

Challenges to Building a Marketplace Platform

Chicken-Egg Issue

The chicken egg issue in app development is supply and demand, and the question is, Who should you attract first? The problem is that there is a high chance of customers leaving your marketplace if there are no sellers. The best approach for launching a marketplace is to attract both sellers and buyers simultaneously. You can do this by offering users rewards or allowing sellers to act as buyers.

For example, Uber offered a minimum wage while launching its taxi service even if drivers didn’t get rides. As a result, Uber became one of the largest transportation companies. 

Commoditization Of Services

The commoditization of services is a process by which goods and services are reduced to a standard form and sold at a reduced price. This process can harm the quality of the service and the workers providing the service. In the context of the Marketplace app, the commoditization of services can be seen in the way that services such as house cleaning and dog walking are being offered at a discounted price. While this may be beneficial to consumers, it can harm the workers providing the service. 

When services are commoditized, the workers are often treated as commodities, and their value is reduced to the lowest possible price. This can lead to poor working conditions and low wages for the workers.

Right development approach

Three development approaches can help you launch your marketplace quickly and cost-effectively: open source, SaaS, or white label. An open source solution can help you create your marketplace application in weeks, even if you don’t have programming skills. Choose a suitable theme and plugins that cover your business needs.

A SaaS platform is the right choice if you want to start your marketplace quickly. Although you may pay a high flat fee, this solution provides the complete feature set.

 If you want a fully functioning marketplace, purchase a white-label solution. This will give you access to a software product with the needed features. Select the features and apply your branding before launching. A white-label solution gives you the product’s source code and complete control over your marketplace. 

Low brand awareness

If your platform isn’t recognized, you may face the problem of low brand awareness. This is a difficult obstacle to overcome. The VP of Marketing at Boostability, Kelly Shelton, says that 92% of customers don’t go beyond the first page of Google search results. Organic results should be your first step to improving brand awareness. The purpose of SEO is to improve your website’s ranking in search results, increasing the amount of traffic your platform receives. If you appear on the first page of Google results, you can expect more traffic and deals on your marketplace. 

High cart abandonment rate

The average rate of cart abandonment is 68% for eCommerce retailers. This high abandonment rate is due, in part, to the fact that buyers have to enter their shipping and payment information each time they make a purchase. The same study also showed that 45% of users switched to laptops after deciding on a product. Making the checkout process as easy as possible is essential would allow buyers to save their shipping and payment information, so they can easily create a purchase. 

High customer acquisition cost

Developing a marketplace application can be difficult due to the high customer acquisition costs. To deliver an app successfully, it is essential to focus on reducing these costs and attracting more users. One way to do this is by optimizing your marketing efforts. Ensure your app is listed correctly, use keywords, and target the right audience. You can also offer incentives to users to encourage them to download and try your app. Offering a free trial or a discount for the first purchase can be a great way to attract new users.

Keep in mind that it takes time and effort to find the right marketing strategy that will work for your app, but it is worth it in the end.

Low customer retention rate

According to research by Mixpanel, most apps and software have a 6-20% eight-week retention rate depending on their industry. The study interviewed users who had deleted the app within the last six months. The reasons for deleting the app varied, but the most common sense was that users found the app useless. In addition, other reasons for deleting the app included boredom, not having enough features, and problems with navigating the app. This data shows that the customer retention rate in the Marketplace app is low.

The app needs to be more practical, feature-rich, stable, and bug-free. You can improve the customer retention rate by addressing these issues.

Successful Examples of marketplace Apps


As an online retailer, Amazon has revolutionized the way consumers buy goods. With a massive inventory of items and a user-friendly interface, Amazon has quickly become the go-to site for online shoppers. In addition to its enormous selection, Amazon offers competitive prices and free shipping on many items. Amazon also provides various payment options, including Amazon Prime, which allows members to receive free two-day shipping on most items and access to a library of streaming movies and TV shows.


In the early days of the internet, there were few online marketplaces. eBay was one of the first and most popular. It allowed people to buy and sell items from around the world. eBay was a great place to find used items at a discount and sell items you no longer wanted. Over time, eBay has become more expensive, and it is not as good of a place to find used items. However, it is still a great place to sell items.


Since its inception in 2005, Etsy has been a go-to online destination for artisanal and handmade goods. The site has over 54 million active users, making up 1.6% of all online sales. In 2017, Etsy announced it would sell off its Craftsy division, which could impact the site’s appeal to crafters and artisans. Despite this, Etsy remains a popular shopping destination for unique, one-of-a-kind items.


Gumroad is a platform that lets you sell products directly to your customers. You can create a product page, set your price, and then share the link with your customers. Gumroad takes care of the payment processing and delivery of the product. It is popular with creatives and entrepreneurs because it is simple and integrates with many tools and platforms. You can use Gumroad to sell digital, physical, and even services.


Storenvy is a website and app that allows users to create online stores to sell their products. It’s free to use, and there are no listing or transaction fees. Storenvy also offers a variety of features to help users promote and sell their products, including marketing tools, social media integration, and a built-in blog.

How to promote your marketplace app?

Make a splashy debut

Making a splashy debut is essential for any business. It is the first impression customers will have of your company, so it is crucial to make a good one. You can do a few things to ensure your debut is a success. Your branding should be consistent across all platforms, from your website to social media profiles. Ensure your logo and tagline are memorable and catchy, and your website is easy to navigate. Also, your marketing should be consistent and targeted to your ideal customer. 

Create a strong social media presence

To make a name for yourself in your industry, you must start building a solid social media presence. Platforms like LinkedIn, Twitter, and Facebook can help you reach new audiences and connect with potential customers. But it’s not enough to just create a profile and start posting; you need to be strategic about your approach.

To start:

  1. Make sure your social media profiles are complete and up-to-date.
  2. Include a profile photo, a brief bio, and a link to your website.
  3. Start sharing valuable content.
  4. Think about your target audience and what they would be interested in reading.
  5. Share blog posts, infographics, images, and other types of content to help you build credibility and authority.

Don’t be afraid to get creative with your content. Try using video, podcasts, or even live-streaming to reach your audience. And be sure to engage with your followers. Respond to comments and questions, and join conversations on relevant topics. Building a solid social media presence can take time and effort, but it’s worth it. You can attract new followers and connect with potential customers by creating informative and engaging content.

Collaborate with other businesses

When starting a business, it’s essential to consider working with other companies. There are numerous benefits to collaborating with other businesses, including getting access to new customers, sharing resources, and more.

One of the best ways to collaborate with other businesses is to join an industry association. Industry associations are organizations that bring together businesses from a specific industry. They provide a forum for businesses to share ideas, learn from each other, and collaborate on projects. If there isn’t an industry association for your industry, you can always start your own. This can be a great way to bring together businesses that share your values and goals.

Use targeted ads

Targeted ads can be highly effective when used correctly. By targeting a specific audience, you can ensure that your ad is seen by people who are likely interested in what you offer. This can result in more clicks, conversions, and ultimately more sales.

There are several ways to target your ads, including demographics, interests, and even past behavior. You can also target specific devices, locations, and times of the day. The more specific you can be, the more likely you are to reach your target audience.

One of the best things about targeted ads is that they can be used in various ways. You can use them to promote your products or services, increase brand awareness, or drive traffic to your website or blog. They can also be used to generate leads or to sell products or services directly.

To grow your business, you must understand the different available targeting options to use targeted ads. Take the time to research your target audience and use suitable targeting options to reach them. This will help you achieve the best results possible.

Reach out to bloggers and other influencers

Reach out to bloggers and other influencers to get them to share your content. Find bloggers in your niche and reach out to them to see if they would be interested in sharing your content. You can also reach out to other influencers in your industry to get them to share your content.

Make use of app store optimization

App store optimization is a process by which you can improve the visibility and ranking of your app in an app store. Optimization aims to make your app easier to find and download for customers. The main ways to optimize your app are to improve your app’s metadata, design your icon and screenshots, and write effective keywords and descriptions.

Way to proceed

Building a perfect marketplace app in one iteration is near impossible. So, rather than delaying the launch, it is a sound strategy to ship the app with the most crucial features first. This way, you ensure your niche marketplace app comes first in the market before the competition starts streaming in.

Else, to-morrow a stranger will say with masterly good sense precisely what we have thought and felt all the time, and we shall be forced to take with shame our own opinion from another. – Ralph Waldo Emerson

Found the blog useful? Give us a

Spread the love
Taru M. Author :
Taru M.

For over 18 years, Taru M. is a successful technology entrepreneur by profession and a tech enthusiast by spirit. She takes pride in offering expertise in her domain to business people's success across the globe. As a business woman and technology expert, she manages to keep her balance along with her family responsibilities. She did her masters in computers, and her work delivery shows the expertise of her education. Connect with her via Linkedin profile to know more about her exciting personality

Contact Us

Please enter your name.
Looks good!
Please enter your email.
Looks good!
Please enter your phone no.
Looks good!