RST Software
Editorial Team
Ross Krawczyk
Reviewed by a tech expert

Your ‘one-stop shop’ guide on how to create a marketplace app: cost, features, tech stack and more

Read this articles in:

Whether you are an ambitious entrepreneur ready to disrupt the market or an established business seeking to expand its digital footprint, a decision to create a marketplace app could be your next strategic masterstroke.

This comprehensive guide is designed to be your compass, leading you through the intricate landscape of marketplace creation. From understanding the different types of marketplaces and their associated costs, to exploring the essential features and the technology stack required to build one, we have got you covered. 

What is a marketplace?

Picture a bustling digital bazaar, a lively hub where buyers and sellers converge, trading goods or services with the ease of a few clicks. At its core, a marketplace platform is the 21st-century reincarnation of the age-old physical market, but with a twist; it never sleeps and its doors are open to anyone, anywhere, anytime.

But a marketplace is more than just a transactional platform. It is a social fabric that weaves together communities, molds consumer habits, and reshapes entire industries. So, when you set out to create a marketplace app, you are not merely constructing a platform; you're sculpting a fresh economic landscape.

Consider Etsy as an illustration. It is more than a marketplace; it is a global tribe of creators and consumers united by their passion for unique, handmade items. It is a specialized platform that bridges artisans with discerning buyers, those who prize the charm of craftsmanship and authenticity over the uniformity of mass-produced items.

Why should you create a marketplace app?

Why should one consider the creation of a marketplace app? Well, marketplace apps are not merely the trend of the moment. They have been around for quite some time, with Amazon establishing its presence as early as 1994 and Etsy following in 2005. These platforms are not just surviving; they are thriving, carving out a substantial portion of the digital economy.

In the year 2020 alone, the top 100 online marketplaces witnessed a staggering $2.67 trillion in transactions. Fast forward to 2024, and that number is projected to leap to over $7 trillion. Now, consider this: the average individual spends more than three hours a day on their mobile device. That is a vast, untapped pool of potential customers just waiting to be engaged. So, the question is not so much 'why should one create a marketplace app?' but rather 'why would one not?'

Types of marketplaces by target audience

Categorizing marketplaces based on their target audience is crucial as it helps in tailoring the platform's features, services, and marketing strategies to meet the specific needs, preferences, and behaviors of the intended users, thereby enhancing user experience and marketplace efficiency.

B2B marketplaces

B2B or Business-to-Business marketplaces, the fastest growing digital commerce sales channel, facilitate transactions between companies. They differ from B2C marketplaces both in seller-end and customer-end features, by enabling:

  • Volume-based pricing,
  • Custom quotation, and
  • Multiple user sub-accounts, to name just a few.

The list of the most popular B2B marketplaces catering to the needs of companies, providing a platform for bulk purchases, wholesale deals, and business-specific products or services includes:

Source: Hokodo

B2C marketplaces

Imagine you are in the market for a new laptop. Where do you turn? Likely, you would gravitate towards a Business-to-Consumer, or B2C, marketplace. These platforms, such as Amazon, eBay, and Allegro serve as digital bridges, directly connecting businesses with consumers. They offer a vast array of products or services, designed to cater to the diverse needs of individual consumers. While the transactions conducted on these platforms may be smaller in scale compared to those on B2B, marketplaces, the opportunities for marketing and exposure are exponentially greater. By creating a marketplace that caters to consumers, you open your business to a wider public audience, multiplying your marketing opportunities.

Source: Gominga

P2P marketplaces (C2C marketplaces)

On the other hand, Peer-to-Peer, or P2P (also known as Customer-to-Customer, or C2C), marketplaces offer a different kind of connection. These platforms, like Facebook Marketplace, Etsy, and Uber (yes, Uber is also a marketplace) link individuals directly with other individuals, enabling them to buy, sell, or exchange goods or services without the need for a business intermediary. This model is particularly suited for the sale of unique, handmade, or second-hand items, as well as services offered by independent entrepreneurs, or solopreneurs. For instance, an artist who creates paintings might use Etsy to sell their artwork directly to buyers, fostering a personal connection that is often absent in traditional retail transactions.

Types of marketplaces by business models

The business model of a marketplace is its backbone, providing structure and determining its operational dynamics. Therefore, it is used as one of their major classifiers.

Vertical marketplace

A vertical marketplace specializes in a specific industry or niche, offering a broad range of products or services within that industry. Zillow for real estate, AutoTrader for automotive, and ASOS for fashion are examples of vertical marketplaces. 

Horizontal marketplace

In contrast to its vertical counterpart, a horizontal marketplace is akin to a sprawling digital department store, offering a diverse array of products or services that span across numerous industries or niches. Think of platforms like Amazon, eBay, and Fiverr. These are quintessential examples of horizontal marketplaces. 

Picture a scenario where you are seeking a singular destination to fulfill a variety of shopping needs – from groceries and electronics to clothing. In such a situation, you would likely find yourself navigating to a site like Amazon, which serves as a comprehensive one-stop-shop, catering to a broad spectrum of consumer needs and desires.

Types of marketplaces by management approach

While unmanaged marketplaces foster a dynamic ecosystem with diverse offerings, lightly managed ones balance seller freedom with quality control, and fully managed marketplaces provide a comprehensive service for both sellers and buyers.

Unmanaged marketplaces

Unmanaged marketplaces are platforms where anyone can upload their listing to get discovered by the buyer and move ahead with a sale. They usually charge very little commission, ranging from 5 to 15% or work on a freemium model. 

Unmanaged marketplaces, such as OLX, Quikr, and eBay, offer a high degree of freedom and flexibility for sellers, allowing anyone to list their products or services. This approach can lead to a diverse range of offerings, attracting a wide variety of buyers and fostering a dynamic marketplace ecosystem.

Unmanaged marketplaces, while offering a high degree of freedom and flexibility for sellers, also come with their share of challenges. One of the most significant issues is the potential for scams, as the lack of oversight can make it easier for fraudulent sellers to operate. Additionally, the quality of products or services can vary greatly, leading to inconsistent customer experiences. Lastly, the absence of a robust dispute resolution system can make it difficult for buyers and sellers to resolve conflicts, potentially damaging the marketplace's reputation.

Lightly managed marketplaces

Lightly managed marketplaces invest somewhat in quality control and background checks. Examples include Etsy,, and Airbnb

Fully managed marketplaces

Fully managed marketplaces cover the whole sales process for sellers. Examples include Opendoor for real estate, Carvana for automotive, and Honor for home care. This approach can be highly beneficial for sellers who prefer to focus on their products or services rather than the intricacies of sales and transactions, and for buyers who appreciate a consistent, high-quality purchasing experience.

Types of marketplaces by type of products offered

The type of products offered by a marketplace is its showcase, displaying what it has to offer to its users. Hence, it is one of the most intuitive ways to categorize them. 

Product marketplaces

Product marketplaces, such as Amazon, eBay, and Walmart, offer physical goods that can be shipped or delivered to customers. 

Service marketplaces

Service marketplaces offer services that can be performed online or offline by professionals or freelancers. Examples include Upwork, Fiverr, and TaskRabbit

Project marketplaces

Project marketplaces offer platforms where customers can post their project requirements and receive bids from service providers. Examples include Freelancer, 99designs, and Thumbtack.

Hybrid marketplaces

Hybrid marketplaces offer a combination of products and services, or different types of products or services, on the same platform. Examples include: 

  • Airbnb combines accommodation and experiences, 
  • Uber offers transportation and food delivery, and 
  • Etsy with a wide range of handmade and vintage goods. 

Apps marketplaces

In the digital realm, apps marketplaces serve as bustling hubs where applications or software are showcased for customers to download or access online. These platforms are akin to a digital toolbox, providing a plethora of solutions for various needs. While the Google Play Store and Apple App Store are household names in this category, there are other less conspicuous but equally valuable players in this space: 

  • The Shopify App Store, for example, presents a wide array of business apps that can be used by Shopify sellers, while
  • Salesforce AppExchange offers a multitude of enterprise applications dedicated for Salesforce users, including sales automation tools, customer service solutions, and marketing automation apps, while
  • Atlassian Marketplace is full of tools supplementing Atlassian platform with productivity enhancement solutions and collaboration for teams, particularly those working in software development and project management.

These platforms underscore the diverse nature of app marketplaces, catering to a wide range of customer needs across various sectors.

NFT marketplaces

NFT marketplaces offer non-fungible tokens, which are unique digital assets that can represent art, music, games, collectibles, and more. Examples include: 

  • OpenSea, where you can buy and sell a wide variety of NFTs like digital art, collectibles, and domain names, among others, 
  • Rarible, a marketplace focused on artwork, collectibles, and other creative NFTs, allowing creators to mint and sell their work, and 
  • SuperRare, dedicated specifically for buying and selling unique, single-edition digital artwork protected by blockchain. 

Types of marketplaces by monetization models

Marketplaces employ a variety of innovative monetization models, from commission-based to subscription-based, to sustain their business operations while delivering value to users.

Commission-based marketplaces 

This model is akin to a facilitator's fee for bridging the gap between the buyer and the seller. It works for such giants as:

Commission-based marketplaces earn by simply taking a slice of the transaction value. 

Subscription-based marketplaces 

Next, we have subscription-based marketplaces. They operate on a recurring fee model, providing access to the platform or additional features. Amazon Prime, Netflix, and Spotify are prime examples of this model.

Listing fee marketplaces 

Listing fee marketplaces, on the other hand, charge a fee for listing a product or service on the platform. Popular examples of this model are:

For example, eBay charges two types of fees for listing items: insertion fees and final value fees. Insertion fees are charged every time you create or relist a listing, regardless of whether it sells. And final value fees are charged when your item sells, and they are calculated based on the category, and other factors.

Ads-powered marketplaces

Lastly, we have ads-powered marketplaces. They generate revenue by displaying targeted advertisements on their platform. Marketplace platforms relying solely on ads are:

However, online marketplace app owners can consider advertisement an additional revenue stream.

How to build a marketplace platform

Now that we have explored the diverse landscape of marketplace types and their unique characteristics, we can delve into the technical side of things. The following steps will guide you through the process of building a marketplace platform, focusing on how to develop solutions that ensure a seamless shopping experience for your customers.

Step 1: Decide what type of marketplace you are building

The first step on your path to a successful marketplace app is to define the type of marketplace you aim to build. Once you identify your target audience, proceed to conducting meticulous market research to understand your audience's needs and preferences. This step will help you make informed decisions on how to create a marketplace website. Then, pick the business model, and follow to determine the management approach. Will your marketplace offer products, services, or both? Are you going to gather revenue from sellers, buyers, or ads?

Step 2: Decide whether you’ll develop it in-house or outsource

The next phase involves deciding on your development approach. Will you build the platform in-house or outsource it? This decision hinges on your available resources and technical expertise. If you have a battle-tested development team at your disposal, in-house development definitely is the way to go. However, if you doubt their technical skills or lack resources, building a simple no code marketplace or outsourcing could be a more cost-effective and time-efficient option. Remember to consider factors like budget, timeline, and control over the project when making this decision.

Step 3: Prepare a marketplace development roadmap

Once you have defined your marketplace and chosen your development approach, it is time to chart your course. Prepare a detailed marketplace development roadmap outlining the steps and milestones for developing and launching your platform. This roadmap will serve as your guide, helping you stay on track and manage your project effectively when you create a marketplace app. Include key milestones, deadlines, and responsibilities in your roadmap to ensure everyone on the team knows what needs to be done and when.

Step 4: Build an MVP

The next step is to build a Minimum Viable Product (MVP). An MVP is a simplified version of your marketplace app with enough features to attract early adopters. When thinking of this step, focus on core features that solve a specific problem for your target audience. It allows you to test your concept of an online marketplace app, gather feedback from the target group, and make necessary adjustments before investing more time and resources into development. 

Step 5: Start scaling both your business and product

After validating your concept and gathering feedback, it is time to scale. This involves expanding your customer base and enhancing your platform by adding new features. Remember, scaling is not just about growing your user base, but also about improving your product to meet the evolving needs of your customers. Use the feedback from your MVP testing phase to prioritize the features and improvements for your platform.

Step 6: Iterate

Finally, remember that building a successful marketplace platform is an ongoing process. This iterative process will help you keep your platform relevant and competitive. Regularly review your platform's performance metrics to identify areas for improvement based on your customers’ needs and suggestions.

Critical features of an online marketplace by user-type

A successful online marketplace is one that caters to the specific needs of its users. However, three distinct user types – admins, merchants, and buyers – each play a unique role and require a tailored set of features to ensure a seamless experience.

Admin-facing features

Admin-focused features are the control center of the marketplace, providing the necessary toolkit for the platform's staff to orchestrate operations. The ability to manage vendors and customers is a key feature, which allows back-office employees to oversee the interactions between these two groups and ensure smooth transactions. Meanwhile, the ability to generate reports provides them with valuable insights into the marketplace's performance and guides them towards data-driven decisions.

Marketplace admin panel can include such features as:

  • Listings management
  • Users management
  • Sellers management
  • Tax management
  • Pricing engine
  • Analytics and reports
  • Dashboards
  • Invoicing
  • Moderation and disputes system
  • Live chat and email support
  • 3rd-party delivery partners integrations
  • Payment monitoring system for fraud detection and prevention
  • Merchant verification system
  • Refunds and returns monitoring
  • Role based access control (RBAC)
  • 2-factor authentication

Merchant-facing features 

Merchant-oriented features are the power tools in the hands of sellers, arming them with the capabilities they need to manage their business on the platform. The ability to manage listings is one such feature, allowing them to control the presentation of their products or services and attract potential buyers. Another key feature is the ability to view sales analytics, which provides merchants with valuable insights into their sales performance and helps them optimize their strategies.

Marketplace merchant portal can include such features as:

  • Listings management
  • Stock management
  • Refunds management
  • Analytics and reports
  • Offers and discounts
  • Live chat with buyers
  • 2-factor authentication
  • Transactions management
  • Order management
  • Delivery management
  • Dedicated buyer-facing store page

Buyer-facing features

Buyer-centric features are the keys to the marketplace for customers, unlocking a world of products and services tailored to their needs. The ability to search and filter listings is a central feature, acting as a personal shopping assistant, helping buyers navigate the vast array of products or services to find exactly what they're looking for. Meanwhile, the ability to review and rate sellers provides buyers with a platform to voice their opinions and experiences, influencing the reputation of sellers and informing the decisions of other users of the platform.

Marketplace buyer portal can include such features as:

  • Profile management
  • Order tracking
  • Advance search capabilities, including “saved searches”
  • Merchant live chat
  • Support and disputes
  • Array of payment methods
  • Merchant reviews
  • Wishlists
  • Array of delivery options
  • Shipment cost calculation

Cost and time estimation of a successful marketplace app development

Estimated cost and time needed to create a marketplace app can vary widely depending on factors such as complexity, scope, features, technology stack, development team size, location, etc. However, a basic marketplace app can be developed in three to eight months, with costs starting from $50,000 for basic functionalities.

Build your marketplace with RST Software

Creating a thriving online marketplace demands meticulous planning, in-depth research, robust development, rigorous testing, continuous iteration, and relentless enhancement. By gaining a comprehensive understanding of your target audience and business model, you can significantly boost your odds of standing out in the fiercely competitive market.

Whether you are a budding startup or a seasoned business, a marketplace app can serve as a potent instrument to broaden your reach, amplify your revenue, and deliver immense value to your customers. Even so, this journey can be complex and challenging, and having a reliable partner by your side can make all the difference.

If you make a decision to create a marketplace app, we at RST Software would be delighted to assist. With our extensive experience and expertise in the field, we can help you navigate this endeavor and turn your vision into reality. Feel free to reach out to us via a contact form.

People also ask

No items found.
Want more posts from the author?
Read more

Want to read more?


Mastering B2B ecommerce development: practical guide for B2B businesses

Unlock B2B ecommerce success: Your practical guide to mastering development for B2B businesses. Expert insights and strategies for growth.

Headless commerce unveiled: the essential 2024 guide

Unlock the future of e-commerce with this essential guide to headless commerce in 2024. Stay ahead in the digital landscape.

How to create a freelance marketplace like Upwork?

Discover the step-by-step process to build a successful freelance marketplace akin to Upwork. Unlock the potential of your platform.
No results found.
There are no results with this criteria. Try changing your search.