If compared to ready-made solutions, building a custom marketplace tailored to your needs gives you much more advantages: higher usability, better control over the system functionality, scalability, and security. But at the same time, managers and CEOs may think that a custom solution can be too costly for them. Today specialists in marketplace development at Fively custom software company will help us figure out the real marketplace development cost depending on your personal needs.
Contents
Possible Types of Marketplaces
Your custom marketplace development price will depend on several variabilities like its type, features, specialists involved, and technologies used. Let’s consider first the possible marketplace types and tell the difference between them:
By participants
Depending on your target audience and the nature of the seller-buyer relationship, your marketplace can be one of the following types:
B2B: here businesses sell products or services in bulk to other businesses, automating the selling processes and improving deal transparency between companies (example: Alibaba). Monetization here includes commissions, subscription fees, or listing fees;
B2C: such marketplaces sell from businesses to customers, and are monetized through commissions, subscription fees, and listing fees (example: AliExpress);
P2P or C2C: connect customers to sell products or exchange them for other products, helping people use resources optimally; are usually monetized through paid promotions (example: BlaBlaCar);
eCommerce: enable businesses or people to sell their products and services to any other people or companies (example: Amazon, OLX);
mCommerce: these are eCommerce marketplaces built with the mobile-first approach to enhance mobile shopping; are monetized through commissions, subscription fees, listing fees, and lead fees (example: Jumia, Sephora);
Crowdfunding: let participants raise funds for a particular project, monetization involves commissions and transaction fees (example: Kickstarter);
Auction platforms: encourage customers to compete for the product or service by bidding, allows getting the highest price for a product (example: eBay, Artsy).
By business model
The chosen business model defines the structure of your marketplace, determines the necessary functions, and affects the final marketplace development cost:
Horizontal: sell various products to numerous buyers, has a vast audience driving thousands of transactions, but the competition is high (Etsy, OLX);
Vertical: focused on niche products instead of selling everything, so you experience less competition and can provide better personalization (Airbnb, TrueFacet);
Global: here various goods are exchanged regardless of users’ geographical location. It has the biggest audience and revenue potential, but you should be ready for language barriers (Amazon, eBay).
Source: Unsplash
As you can see, marketplace types vary greatly, so in order to reduce the room for error, and cut time to market it’s very important to hold a detailed investigation before the development.
Features and Their Approximate Cost
Now, let’s consider the basic marketplace features you may need and their corresponding development costs in two different system types: Amazon-like (a global eCommerce marketplace) and Airbnb-like (a P2P vertically integrated marketplace).
Project stage/Feature
Amazon-like marketplace
Airbnb-like marketplace
Business analysis
$9,000–$25,000
$9,000–$21,000
System design
$5,000–$15,000
$4,000–$12,000
Front-end development
$24,000–$78,000
$19,000–$60,000
Back-end development
$40,000–$115,000
$32,000–$100,000
QA and maintenance
$15,000–$65,000
$12,000–$50,000
Authentication and login
$5,000–$21,000
$5,000–$21,000
Profiles (host, guest, admin)
$18,000–$25,000
$18,000–$25,000
Product/Apartment pages
$10,000–$14,000
$8,000–$10,000
Product/Apartment details*
$3,000–$5,000
$2,000–$4,000
Search and filters
$15,000–$20,000
$15,000–$20,000
Shopping cart
$12,000–$17,000
$12,000–$15,000
Customer reviews*
$12,000–$18,000
$12,000–$18,000
Email notifications
$10,000–$20,000
$10,000–$20,000
Messaging system*
$10,000–$20,000
$10,000–$20,000
Payment system integration
$20,000–$25,000
$14,000–$20,000
CRM integration
$10,000–$15,000
$10,000–$15,000
Wish list*
$5,000–$10,000
$5,000–$10,000
Product comparison*
$10,000–$15,000
$10,000–$15,000
Product recommendations*
$10,000–$40,000
$10,000–$40,000
Geolocation*
$10,000–$16,000
$10,000–$16,000
Customer reviews*
$13,000–$20,000
$12,000–$18,000
Total cost
$266,000–$599,000
$239,000–$530,000
* – additional functionality
Thus, taken roughly, the final cost for a custom marketplace with basic functionality starts at $100,000, while with some additional functionality it starts at $200,000 and depends on the chosen business model, features needed, and technologies used.
Tech Stack for Your Marketplace
Choosing a fitting tech stack to cover front-end, back-end, and QA operations needed for a marketplace development, allows implementation of the desired functionality and optimizes marketplace development costs:
Back-end: we recommend using Ruby, Node.js, PHP, or Python, with their corresponding frameworks to create website logic, and for client requests management, it’s good to choose PostgreSQL, MySQL, Redis, and other similar databases;
Front-end: use HTML, CSS, JavaScript, and TypeScript with their libraries jQuery, React, or Vue to create a user interface with all the product pages and regarding details;
QA services: testers need to combine manual and automation testing tools, performing tests on different environments to evaluate software behavior, improve its quality, and timely remove bottlenecks.
Every custom marketplace uses a vast amount of technologies, and the list can be bigger, so here we assume the most popular and wide-used technologies of the modern tech stack. A professional marketplace development provider carefully selects the tech stack for each project to ensure the high loading speed of the system, its scalability, and operability, so you better consult with your software provider.
The next question that comes is engineers’ remuneration. In Western Europe, engineers have solid skills but their salaries are also very high (approximately $90 per hour), making businesses search for other options.
Engineers from Eastern Europe are now the top choice according to numerous rankings: with an average rate of $50 per hour, they are highly expertized and show great performance.
Indian engineers have the lowest rates, starting from $25 per hour, but they can be also less proficient in programming, and English, and, what’s also important, have a huge difference in time: as much as twelve hours ahead of the center of the U.S.
Summing Up
Thus, marketplaces vary in types, structure, features used, and participants involved. All these determine the needed features, their complexity, and the technologies used, which altogether influence the final marketplace cost.
Taken roughly, the final cost for a custom marketplace starts at $100,000 and depends on a number of factors, and the full cycle of development from business analysis to deployment can start from 3000 hours.
We recommend you perform careful research, business analysis, and project planning, as well as smart technology choices, tailored to your personal marketplace development needs, to know the final cost of your marketplace development project.
You should remember that no initial estimate can be 100% precise, and, what’s more important, the cost isn’t the most important factor when choosing an IT vendor. What’s really crucial is the professional skills
of the chosen team, clear development processes, and transparent communication. Choose a trusted software vendor which can help you build a custom marketplace development strategy, and use your budget in the most beneficial way.