November 27, 2022


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How to build a marketplace app

Marketplaces have been rapidly gaining popularity since 2020 — Since the pandemic, the field of online commerce has grown several times over, and by 2024, sales on marketplaces are projected to grow to 7 trillion dollars. So if you have an idea for a new app, it’s time to fill that niche. We will tell you about the nuances and help you understand how to build a marketplace app.

The marketplace is an online marketplace that connects buyers and sellers. On the marketplace, people can compare products from different manufacturers and choose the best option, without wasting time studying each store individually. Manufacturers get an additional sales channel with a warm audience, as well as the opportunity to save money on marketing and developing their site.

The market is really open to marketplace apps now, but only if you build a marketplace app professionally can you secure your position for a long time. Over the past few years, users have become accustomed to high-quality service, so a crude product will attract very few people.

Let us analyze what aspects must be considered to make your marketplace a profitable and useful project, and not a waste of effort and budget.

Business plan and monetization

How to build a marketplace app? It is a risky and investment-intensive process. Planning a business plan and how to monetize it will help answer the three main questions business owners and investors usually ask:

  • What is the smallest number of users you need to attract to generate the desired revenue stream;
  • How much money will be needed to attract the first stream of users;
  • When the investment will start to pay for itself.
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Some people think that a business plan is only needed to attract investment money. But it is not: it helps objectively assess any idea and understand how possible it is in the real market. For each project the structure of the document can be different, but there are generally accepted points that can be taken as a basis.

Marketplace analysis

Before you build a marketplace app, you need to conduct a market analysis. Checking the state of the e-commerce sphere, global and regional trends, studying competitors, and assessing demand will help understand what profits can be made in a particular period of time and what opportunities for scaling the app can be used in the future.

Marketplace overview

Description, the app’s competitive advantages and key features, and the business life cycle. Describe how you see the app, its functionality, audience, and differences from its current competitors.

  • Marketing analysis and strategy
  • Product positioning
  • Portrait of the target audience
  • Statistics of the average cost of promotion
  • The choice of sites for promotion and compiling a media plan
  • Financial plan
  • Before you build a marketplace app, you need to determine the budget for the development project
  • Budget for advertising
  • Operating costs: servers, licenses, accounting, lawyers, bank transfers, logistics costs, storage space rental, etc.

Key functions

The functionality of the app depends on the direction of the marketplace, budget, and deadlines. How to build a marketplace app and save money? Use a basic set of features. It’s faster and cheaper. Custom development by customer request may be several times more expensive and take 3-5 months. Regardless of the option you select, the following functions may be implemented in the app for launching the marketplace:

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Registration and Authorization

The user should be able to create a personal account where all the information about their orders will be stored. Usually one can register with email, phone number, and social networks. For security reasons, a two-factor authentication function is introduced during authorization. There should also be a password recovery screen.

Seller and Buyer profile management

Buyer can edit personal data, change password, upload profile picture. Sellers can add information about the company, upload pictures of products and descriptions of their cards, create roles of administrator, owner and manager, and limit access rights for certain functions. Also, the seller can track transactions, delivery status, dispute resolution, and download statistics and analytics for each product.


The system of convenient filters and product comparison is the main advantage of marketplaces. The basic version can add an ordinary search, and later implement additional options: autocomplete, hinting, correcting errors and typos in user text, saving the history of requests, and so on.

Communication between customers and vendors

It is implemented in the form of collaborative chats, the ability to put “likes”, a module with feedback, ratings, and evaluations.


Push-notifications are a part of marketing tools: they help to tell you about new products and promotions, track order status, or remind you about yourself if the user hasn’t been to the app for a long time.


Entering the data of bank cards, viewing, and managing purchases, canceling payments, payment history.

Payment system

Security of every payment on the platform is one of the important requirements for the marketplace. For seamless financial settlements between buyer and seller in the app, you need to use a secure payment gateway — a service that processes bank card transactions by encrypting sensitive user data.

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The more securely you protect customers’ personal information and the more often you tell them about it, the more people will start to trust the new app. Add personal and banking security information to the shopping cart and checkout screen to motivate people to make a purchase.

Support and maintenance

The marketplace is a complex mobile product. You cannot write the terms of reference once, release the final app, and quietly make a profit. After the release there is no less painstaking work to be done: all the feedback from new users will have to be studied and changes made, unpopular functions will have to be removed, and those that bring in more money will have to be strengthened. The app needs to evolve with the market and its target audience. It is also important to constantly analyze and refine the app.

How much does it cost to develop

The final budget will depend on the specific request of the client: the type of project, how you want to build a marketplace app (basic or custom with individual functions), design complexity, and additional changes. The exact cost can be calculated during a consultation with the developers.