How to Build a Marketplace App in 2021 – Tips, Tricks, and Benefits

2020 has been a challenging year for business owners. 2021 promises to be a little easier, at least because many companies and ordinary people have already adapted to the changes, but the business will definitely not be the same. In response to the unprecedented flourishing of e-commerce, building a marketplace is becoming a promising idea for both sellers, buyers, and the initiator of such a startup. Therefore, in this article, we will tell you how to build a marketplace app and turn it into a profitable business.

What Is a Multi-Vendor Marketplace?

A multi-vendor marketplace is a platform that allows a large number of sellers to list and sell their products, competing honestly for the attention of consumers, and giving the latter the opportunity to find the best deals at the best prices and with the best level of customer service. Thus, a multi-vendor marketplace acts as an intermediary between a large number of sellers and a large number of buyers, giving them a place to meet each other.

Marketplace app development is a profitable idea for both the creator of such business and potential users. By using the marketplace to showcase their products, sellers get rid of the need to create their personal eCommerce website. By the way, some marketplaces offer such built-in functionality, that is, it is possible to create a simple eCommerce website using the marketplace’s hosting and domain). Buyers, in turn, consider marketplaces to be good places to shop online because they can compare all offers in one place, significantly saving time and getting the best price.

However, to make your marketplace profitable, you should approach the technical realization of your solution wisely. For example, you may get started with this exhaustive guide on how to build a marketplace app in 2021 to get practice-proven insights shared by the marketplace development experts.

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What Is the Difference Between a Marketplace and eCommerce Platform?

How to build a marketplace app? To answer this question correctly, let’s get started by comparing the marketplace and eCommerce platforms specifics.

  Marketplace Your own eCommerce platform
Business model B2B/B2C/P2P B2B/B2C/D2C
Necessary resources to get started To create a marketplace, the only thing you need is technical expertise and development investments. To create an eCommerce website, you should have some goods to sell in addition to the cost you need to pay for the eCommerce website development. Thus, the amount of necessary resources to get started with an eCommerce website is higher compared to those needed for marketplace development.
Features and design Classical eCommerce features plus the opportunity for multiple vendors and buyers to get registered on the marketplace. Classical eCommerce features.
Scaling perspectives The marketplace is scaled when more and more buyers and sellers start to use it. Scaling an eCommerce project is possible within the markets the products/ services are expected to be in demand.
Possible pitfalls Firstly, your marketplace idea should be quite promising  -there is no point in creating the second Amazon or competing with world-famous brands. Secondly, you should carefully think about the quality assurance system and constantly stay in touch with the buyers motivating them to leave testimonials and share their feedback on the interaction with the sellers on your marketplace. As for the possible pitfalls of eCommerce website creation, you should carefully think about your sales funnel and find a way to realize it with the help of your design and UI/UX. Also, the goods you are going to sell should be demanded and competitive in a certain market.
Cost to develop and maintain The price to create a marketplace can be the same or a little lower compared to an eCommerce website or application creation. Very often, the price of an eCommerce website is even higher compared to the cost to create a marketplace. The costs to maintain may be equal or almost equal.

Why Marketplace App Development Is a Promising Idea for 2021?

According to the research, “Marketplaces offer undeniable advantages, such as prompt access to a lot of clients, high recognizability, first contact venue (many buyers start looking for products on marketplaces), ready technical solutions, a payment system, and logistics. They are great venues for testing products and new sales markets and for collecting information from clients.  A small  batch of pilot  goods can  be launched to test demand and get feedback from clients, all without making big investments in sales  and  distribution  channels.”

However, there are some more marketplace app development advantages you should consider.

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What’s more, the question of how to build a marketplace makes particular sense in 2021, as the previous year has significantly changed shopping habits and behavior patterns. Under the pressure of the pandemic and sagging purchasing power, people have become more conscious and frugal in relation to the purchases they make, and marketplaces are exactly the platforms that allow for finding the best price-quality match.

Plus, e-commerce is growing under the influence of social distancing requirements, which will remain relevant in 2021. This means that creating a marketplace is becoming more profitable than ever, and therefore, let’s figure out how to build a web marketplace from scratch.

How to Build a Marketplace App  in 4 Stages

So, here is how to build a two-sided marketplace step by step.

1.   Research

The first thing you need to do is come up with extensive research and validate your idea. Even though marketplaces are promising, you need to understand who you are going to compete with, what is the specifics of the market you are going to enter, and what are the expectations of your potential users.

Use proven economic analysis methodologies to find answers to these questions. These are such methodologies such as PEST, SWOT, Five forces, plus a focus group survey also makes sense.

2.   Design

When designing your marketplace, it is worth following the best eco-commerce practices and taking current trends into account. As for the trends in marketplace development for 2021, these are mobile commerce, voice search, and the use of progressive web applications as an alternative to expensive native or sometimes lame cross-platform applications.

Also, don’t forget to test your design prototype with your users using heatmaps, observations, and surveys.

3.   Development

This is a technical process, the specifics of which will directly depend on the platform for which you are developing your application and the technology stack that you choose.

Also, the development process is inseparable from the testing process, which can bite off 30-35% of your budget, but save you from even more expensive fixes in the future.

4.   Launching, maintaining, and scaling

This is the final stage, but the work on your marketplace does not end here. Once your solution is launched, you will need to continually keep it running, improve the application according to the wishes of your users, and increase your reach with marketing strategies aimed at both sellers and buyers.

How Long Does It Take to Build a Marketplace?

In most cases, it is quite difficult to come up with a clear timeline. The coding process will take most of the time, but keep in mind that you also need to set aside time for preliminary research, creating and testing designs, gathering feedback after your MVP launch, and marketing strategies development. Plus, maintaining your solution and improving it is a never-ending process.

How Much Does It Cost to Create a Marketplace App?

The cost of creating your marketplace is also individual and strongly depends on the specifics of your solution, the number of required functions, and the customization of your design. Plus, the location of your developers matters as well. For example, if you hire developers locally in America, your solution will cost significantly more compared to the cost of the work of programmers from Eastern Europe.

Outsourcing the development of your marketplace to the countries of the Far East allows you to save almost tenfold, but be prepared for a possible language barrier, a significant difference in mentality, and average quality.


Thus, creating a multi vendor marketplace is a worth-considering venture for 2021. However, there are two important things to keep in mind. First, the core idea of your marketplace should be unique and capable of solving the problem of your users. Second, building a marketplace requires strong technical expertise to make your solution attractive in terms of design, functionality, and user experience. When these two important elements match, your marketplace will be profitable and competitive.