How to Create a Marketplace Mobile App?

How to Create a Marketplace Mobile App?

22 June 2022 • 17 min read

One in four people on our planet is a digital buyer. And the number of people that prefer online shopping does not stop growing: last year, it exceeded 2 billion people.

According to Insider Intelligence, the U.S. mobile commerce market has a chance to double its share of retail sales between 2020 and 2025. Given such growth in the industry, now is the perfect time to engage in online marketplace app development.

Marketplace apps are a prominent niche in mCommerce. Industry giants like Amazon or AliExpress have long realized this and launched mobile applications. It’s no surprise since such apps are user-friendly and profitable for their developers and online business owners.

Today, we’ll show you how to build a marketplace app from scratch. You’ll discover which technologies, features, and design techniques are best suited to marketplace mobile app development. Softermii will use its expertise in creating platforms like Dollar Shave Club, Hollar, and Streamotion to help you with this.

We will also tell you why you should develop a custom marketplace application and how much it will cost. So let’s get acquainted with the marketplaces drawing on some stats.

Online Marketplace App Market Overview

It’s prime time to build a marketplace mobile app right now. If you want to know the reason, consider the following facts.

In 2021, just the top 100 online marketplaces earned $3.23 trillion by selling their goods and services. In the same year, gross merchandise sales increased by 18%. If such steady growth continues, the global market for online marketplaces will exceed $7 trillion by 2024.

Marketplace app development

Even though 60% of eCommerce sales in 2021 happened on the three leading marketplaces such as Taobao (China), Tmall (China), and Amazon (the U.S.), their competitors continue to grow as well. In particular, this applies to the American platform Chairish, which sells vintage home items, or the Etsy marketplace, which deals mostly with handmade goods.

Build a marketplace app

Mobile commerce experiences significant growth as well. About 63% of purchases on online marketplaces are made via a smartphone. For example, nearly eight out of ten Americans buy groceries through mobile apps. In the segment of luxury goods, the situation is similar: 61% of buyers prefer to shop via their smartphone or tablet.

According to Statista, mobile sales in the United States in 2021 exceeded $360 billion. These sales are projected to grow to $710 billion in 2025. Therefore, now is the best time to start developing an online marketplace app.

Users likely prefer shopping through mobile applications, as it is a more convenient option. Below you can find the frequency of retail app use in the US:

Build a marketplace mobile app

Why Should You Make Your Own Marketplace App?

Marketplace applications are the driver of the mobile commerce industry. They open up many benefits to companies that develop online marketplace apps: significant earnings, growth potential, and a swift start. Here are some reasons why you should think about developing marketplace apps.

You Want to Run a Business Effortlessly

This is the first reason why you should create your own marketplace app. The marketplace application is a tool for buyers and merchants. All you need to do is provide your users with a convenient and robust platform where they can do business with each other. You do not worry about inventory, its delivery, storage, and maintenance. It is what merchants will do as long as your app is effective.

You Want to Attract a Wider Audience

Being the owner of a marketplace application means having access to a large audience. Your users will be both buyers and sellers. And if your marketplace doesn’t focus on a specific niche but on several industries at once, the number of users will be even higher.

You Are Focused on Continuous Growth

Develop a marketplace app if you want to be a part of a flourishing industry. Consider this: the number of your platform users, mainly buyers and sellers, may increase, and you will not even need to expand your staff. Similarly, sales grow regardless of your team’s size.

Types of Marketplaces: Which One Should You Choose?

Not all marketplaces are the same. Thus, before you start creating a marketplace app, you should familiarize yourself with the types of such applications according to various criteria. This way, you can choose the model that best suits your business and your target audience’s needs. Here are the types:

By Products

The first way you can classify a marketplace is according to its products. There may be the following options:

  • Goods (e.g., books, clothes, furniture).
  • Services (e.g., cleaning services, tutoring).
  • Hybrid (both goods and services).

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By Focus

Marketplaces can be divided into vertical or horizontal. Vertical ones offer products or services of one specific niche or type, while horizontal ones provide goods from different industries.

By Target Audience

Marketplaces have different target audiences depending on who serves whom. Here’s what we mean:

  • Business to Business (B2B). It is a market cooperation model, where one business offers its products or services to other companies.
  • Business to Consumer (B2C). It is a market where businesses offer their products or services to individual consumers.
  • Peer to Peer (P2P). In such marketplaces, some consumers interact with others, offering goods or services to each other.

By Participants

The marketplaces can be classified as two-sided or multi-sided based on the participants.

When just one provider sells its goods or services to another party, it is a two-sided market. Uber is a good illustration of this; on the one side, there is the taxi company, and on the other, there are the passengers. When there are numerous providers of services or goods on one side and their consumers on the other, it is a multi-sided marketplace.

By Management Approach

Depending on the level of control, marketplaces can be unmanaged, lightly, or fully managed. Choose the management model that suits you best.

Essential Features of a Marketplace Mobile App

You should consider the following marketplace app features to make your product integral:

Account and User Profile

Create a marketplace app

Make sure you add an account feature and a profile user in your marketplace app development process. Keep in mind that you need separate accounts for sellers and buyers. Here are some more sub-features for the account:

  • Sign in
  • Login
  • Social login (e.g., Facebook or Google)
  • Email integration
  • Delete account
  • Regulatory compliance
  • User profile (e.g., name, surname, bio, user picture)

Listing Management

Cost of a marketplace app development

Listings are a necessary part of your platform because they reflect the goods and services available on your marketplace. Here’s what to work on:

  • Update listings
  • Delete listings
  • Close listings
  • Draft listings
  • Upload images
  • Pricing info

In-app Search

Once you’ve added listings, give your users a convenient and easy way to search for products and services that interest them. To do this, work on the search feature in the application. What will be reasonable to add:

  • Listing categories
  • Filtered search
  • Keyword search
  • Availability search
  • Autocomplete search

Transactions Management

It is significant to add transaction management tools, such as viewing transaction status (successful, rejected, or canceled). It will also be helpful to implement billing features, PDF receipts, and tax info.

Payment Integration

Creating a marketplace app

Your marketplace will not be complete if your user cannot make a payment. Therefore, you need to integrate a payment gateway to your app.

Booking and Availability Management

This feature will appeal to your buyers and sellers because it allows customers to book their favorite products and merchants to display what is available or when it will appear.

Admin Panel

The admin panel will help you monitor user activity and use it to improve your marketplace. You should include the following sub-functions here:

  • User search
  • User account status
  • User management
  • Products/services management
  • Transaction management
  • Notification management

Marketing and Communications

Here, it would help if you decided which marketing and communications tools meet the needs of your marketplace platform and then implement them. Common features include email integration, CRM, and SEO tools.

Monitoring and Security

Your application will also require adding performance monitoring and security features. With them, you can see how well your platform works and, at the same time, ensure the privacy and security of your users’ data.

Marketplace App Development Step-by-step

Although the marketplace as a business model is very profitable, it takes a lot of effort and time to develop such an application. So we suggest you figure out what it takes to build a marketplace app.

The Importance of Identifying User Activity

You need to track user activity for building a marketplace app. For example, what path buyers take in the app before making a purchase or how sellers will organize the sales process on your platform.

It is significant because, without a user journey map, you run the risk of building an application that is challenging to use. As a result, you will find it problematic to reach out to your audience.

Setting Up the Structure

Once you’ve decided how your users will interact with your application, you can think about its structure. It must be something like the skeleton of your future platform.

Choosing a Monetization Model for Your Marketplace Application

How exactly do the owners of marketplace platforms make money? There are different monetization models for this. The main options are as follows:

  • Commission. This model assumes that you can charge a fee for all transactions on your platform.
  • Subscription fee. This model implies that you will charge a monthly fee from your sellers so that they can stay on your platform or access more advanced functionality.
  • Listing fee. This option means that sellers will pay you to make their products appear in the listings on your platform.
  • Featured listings. It is when you offer sellers exclusive listings for a specific fee.
  • Advertising. This option involves integrating advertising into your application and monetizing it.

Marketplace Application End-User

Before developing an MVP for an online marketplace app, you need to determine your target audience’s needs and learn who your typical user is.

You should make assumptions about the actions and needs of your users and prove them in practice. To do this, you need to develop hypotheses and, for example, survey real consumers whom you consider your ideal users.

Setting Up the Mandatory Features

To create a marketplace application, determine the functionality it should have. When choosing the features, keep in mind that you have two types of users: buyers and sellers. Select functions that will suit both. The list above may come in handy.

Major Marketplace App Development Stages In-depth

Let’s go through the main steps required to create a marketplace app.

  1. Explore the market and competitors. Learn more about your competitors, their strengths and weaknesses, and make a product that is many times better.
  2. Select the type of your marketplace. According to the market’s, your audience’s, and your own needs, choose the best marketplace model.
  3. Choose a monetization model. At this point, you need to decide exactly how your application will bring you profit.
  4. Identify the necessary features. Choose the features you need to keep your marketplace app running smoothly.
  5. Get involved in prototyping. Think about what your marketplace should look like and implement it as a prototype — the basis for your future application.
  6. UX/UI design. In this step, your designers can already work on creating a user interface.
  7. Choose a tech stack for a custom application or platform builder for a non-custom product. Depending on what you choose: creating a marketplace from scratch or using a template, you should determine which technologies to use.
  8. Build and launch an MVP. At this point, your team needs to develop a functioning minimum viable product that you can present to your users.

Scaling and Expansion

If you see that your marketplace MVP is in demand in the market, then you can expand its functionality or capabilities. It will increase your chances of attracting even more users. It would help if you also worked on fixing bugs and improving existing features at this stage.

Design Best Practices

Choosing features for your application marketplace is one thing. And it’s quite another to ensure that the visual part of your platform is intuitive and user-friendly. We recommend using the following design tips:

  • Meaningful UX

You’ve studied your user actions for a reason. Now, it’s time to develop a UX strategy based on the collected data. This strategy will help your designers make your application accessible and easy to use.

  • Simple UI

We know how complex marketplaces can sometimes be with a bunch of lists and numerous goods. So give the listings and filters in your app a simple look. Also, take care of the simplicity in user accounts design.

  • Consistency

Although the marketplace assumes different sellers and many consumers will use it, do not forget about branding. Ensure your app includes corporate colors, fonts, buttons, and more.

Marketplace App Tech Stack

Let’s see what technologies your developers can use to build a marketplace app.

Mobile development: Swift and Objective-C for iOS, Java and Kotlin for Android, and React Native for cross-platform apps.

Backend: Python, Ruby-on-Rails, Node.js.

Database: PostgreSQL, MongoDB.

Search engine: Elasticsearch, PostGIS.

Email integration: SendGrid, Mailgun, Amazon SES.

Payment integration: Stripe, PayPal, Skrill.

If your path is not custom marketplace development but ready-made templates, you can use services such as OpenCart, Drupal, or Magneto.

How Much Does It Cost to Build a Marketplace Mobile App?

The cost of marketplace app development depends on many factors. It is influenced by the number and complexity of features, the chosen technology stack, and the marketplace app development company’s rates.

The final price of your ecommerce marketplace application can range from $160,000 to $240,000. However, this is the approximate cost of a fully finished product with extensive functionality.

Read Also: eCommerce Platform Development: Ultimate Guide for 2022

You can start your journey to creating marketplaces for online stores with less investment. For example, developing an interactive prototype can cost you $15,000 to $20,000.

AAs for the cost to build an online marketplace MVP, you should expect to pay somewhere between $40,000 and $50,000 for such an app. As a result, you will have a ready-to-launch marketplace with basic functionality.

If you need to calculate your online marketplace app development cost more accurately, please contact our team.

Marketplace App Development with Softermii

Our team is ready to build a marketplace app from scratch for you. We have extensive experience developing such applications and want to tell you about it. Consider some of our prominent cases:


Building a marketplace app

Streamotion is a mobile application for eCommerce, which has successfully picked up the latest trends in online commerce. We mean the Livestream commerce.

Our team wanted this marketplace app to enter the new, trendy Livestream commerce market, attract more customers from this promising niche, and engage younger audiences.

We have enriched the application with the following features: group broadcasts, live streaming, a built-in shop, payment integrations, text chats, listings, and product landings.

As a result, our product has achieved significant success. This application has been installed more than 20,000 times in just two weeks after launch. Currently, potential customers of this platform spend an average of 25 minutes a day here.

Dollar Shave Club

Marketplace app development company

Dollar Shave Club is an online store that focuses on selling shaving products for men. In addition to the existing web version used from the desktop, we needed to update the DSC mobile app and create a high-quality and modern design.

As a result, we developed an application with outstanding UI elements and frameworks for model object animation. We also conducted analytics to increase conversion rates. Thanks to the efforts of our team, this app has been installed more than 500,000 times and received positive reviews from Android users with a 4.8-star rating.


Marketplace app development cost

Hollar is a popular American online discount retail platform. When the customer approached us, he already had an ecommerce websites and a basic mobile application with limited functionality.

However, the Hollar team wanted to increase their online presence by improving their mobile application. To do this, we have expanded its working capacities by adding the following features:

  • Android and Apple Pay
  • Updated UI with animation
  • Adding goods via smartphone feature
  • Exclusive offers for mobile users
  • Daily content updates
  • Predictive search
  • Customer support options

As a result, Hollar experienced thousands of downloads and received a five-star rating in mobile app stores.

Final Thoughts

Given the increasing number of customers and the growth of the eCommerce industry in general, marketplace app development is now a very profitable endeavor. It is exactly what you should do if you want to run your business smoothly, attract a wider audience, and have a constant space for growth.

Yet, developing such applications from scratch requires technical knowledge, time, and maximum effort. Of course, you can use special platform builders, but how to tailor the app to your needs?

We offer you a much better solution: developing a custom marketplace application. If you are interested, feel free to get in touch with us.

Frequently Asked Questions

What is healthcare app development?

There are different types of marketplace applications according to the following criteria:

  • By products (goods, services, or hybrid)
  • By focus (vertical or horizontal)
  • By target audience (B2B, B2C, or P2P)
  • By participants (two-sided or multi-sided)
  • By management approach (unmanaged, lightly managed, or fully managed)

What are some of the marketplace app features?

The necessary features of your online marketplace app are as follows:

  • Account and user profile
  • Listing management
  • In-app search
  • Transactions management
  • Payment integration
  • Booking and availability management
  • Admin panel
  • Marketing and communications tools
  • Monitoring and security

How to create an online marketplace app?

To create a marketplace application, you need to follow these steps:

  1. Explore the market and competitors
  2. Select your marketplace type
  3. Choose a monetization model
  4. Identify the necessary features
  5. Get involved in prototyping
  6. UX/UI design
  7. Choose a tech stack
  8. Build and launch an MVP
  9. Scale and expand your app

Is it possible to make an app like Letgo or Craigslist?

Yes, of course. Softermii has developed similar apps (Dollar Shave Club or Hollar), so our team can also help you with that.

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