Introducing the next-generation, Magento 2 marketplace business model has proved itself and gained the most efficient feat in web eCommerce. It is an eCommerce software that promotes sales for several vendors by allowing them to sell products on one online platform. The entire marketplace works on the same eCommerce software where different vendors sell their range of commodities on a marketplace website.
Juho Makkonen has been building marketplace websites since 2008. He is a co-founder of Sharetribeand currently serves as the CEO of the company. Sharetribe helps entrepreneurs and organizations to easily create their own marketplace platforms. Juho is also a co-author of The Lean Marketplace, a practical guide for building a successful online marketplace business.
What Are Some Insider Tips For Jump Starting A Marketplace Website Business?
At the same time, there are almost no expenses for manufacturing, warehouses, and equipment. eCommerce gives anyone the chance to start a profitable business with minimal investment. Without any inventory, there’s no incentive for your customers to shop on your marketplace at all, so secure the goods and services before how to make a marketplace website you start reeling in customers. When you first start an online marketplace, attracting both merchants and customers to use your marketplace is going to be your biggest challenge. Other online marketplaces can sell services to their customers, where merchants can rent or sell their own specialties to the marketplace.
How much does it cost to make a website like Amazon?
Overall, to be able to create a website like Amazon or Flipkart, it would cost about $60,000-$80,000 in the average range. The more the number of features and the more powerful services and support you seek to for the website, the more investment will it ask for.
Speaking of budget, this approach can cost you significant money — starting around $50,000. Many beginners make a common mistake of thinking that the marketplace’s success depends mainly on the number of vendors. However, the quality of the represented products, as well as delivery services, has a bigger impact on the platforms’ popularity. Therefore you have to be sure that all stages of communication with customers provide a high-quality experience. The buyers can leave positive feedback attracting other people to the platform.
Create A Business Model
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.
However, they can also leave a negative review that can ruin your reputation. Notice that the marketplace will be responsible not just for its own mistakes, but also for the vendors’ problems. So you should control all processes and get rid of irresponsible suppliers.
Walmart Lands Bombshell On Marketplace Sellers
But while these two eCommerce business models indeed have similarities, they’re not exactly the same. As mentioned earlier, online buyers now like more freedom of choice and flexibility when it comes to shopping. They prefer websites that offer more options while buying online. A marketplace is designed to on-board multiple sellers and their products, broadening the range of products/services. how to make a marketplace website This helps marketplaces to take benefit of high demand and popularity among their target audience i.e. online buyers. An online marketplace works quite similar to an online store but solves several pain points faced by online shoppers. Instead of listing products by a brand/business, the marketplace app allows multiple independent sellers to list services/products.
Concerning revenue, the marketplace owner takes a percentage of the sales on any product which is sold across its platform. Your primary task is to build a website where you will sell your products online. You can create it from scratch or use ready solutions like Shopify, WordPress, or Jimbo. Remember that your online marketplace website should be trustworthy, scalable and have diverse functionality. A marketplace connects both buyers and sellers in a single place. So, it must provide the most convenient experience for secure payment exchange. The marketplaces that the ColorWhistle team can build will have features like regular payments, automatic refunds, and quick payment cancellations.
Become A Better Marketplace Owner
Such functionality is unattainable in any other approach (e.g. Magento or no-code builders) for building a marketplace. In short, a seller can leverage all the functions and options of a platform, while making their marketplace website look like it was custom made for a particular brand. On the other hand, this approach takes a lot of time — at least three months, because building an optimized platform that handles all transactions smoothly is no easy task. This is a major drawback because it is often very important to create a marketplace as soon as possible. Experimenting on developing custom features and supporting a platform by yourself can drain your budget.
We have also worked on white label e-commerce projects that required advanced fraud prevention and detection systems. An e-commerce marketplace or multi-vendor marketplace is a platform where you can find products or services from multiple vendors on the same platform. These features distinguish the marketplace from the online store. Creating the remote meeting appropriate script and support affect the cost of marketplace building. But this is not a reason to give up ambitious plans to develop the project. Marketplace builder pack will be much cheaper than hiring a professional team but will create the quality product. White labeling for sellers includes various unique types of back-end functionality.
Choose The Marketplace Type
After the development stage, you expect to release your project. It’s important to think over how to start an online marketplace website effectively and how to attract first users. Considering the issue of how to create an online marketplace, let’s see in details what the price for a marketplace website consists of. 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. In fact, out of 100 online marketplaces that were surveyed in the US, 63% generate $50 million annually and the other 37% generate more than $100 million.