#Guides #Marketplaces #Tech | 18 min read | Updated: 8/16/2022

How to Develop Online Marketplace MVP

Updated: 8/16/2022
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The online marketplace is a platform where one can review, compare, and buy goods or services from different vendors. Generally speaking, the marketplaces are the mediators between the buyers and the sellers. 

The clients look for the product or services they need. And the system displays the sellers that are able to offer the necessary item or jobs.

It is not surprising that the marketplaces have become so popular. You no longer need to go to the shopping mall. Or surf the web looking for the services you need. Online marketplaces are also convenient for vendors too. They help them expanding the audience and getting new clients from all over the world.

No doubt the idea of creating an online marketplace is alluring. How to create a product to satisfy the needs of your target audience? You may first develop a marketplace minimum viable product (MVP) with the core functions. 

In this article, we shall speak about the marketplace MVP development. Besides, you will get to know how much it costs to build a marketplace MVP.

Types of marketplaces

The online marketplace is a platform where one can review, compare, and buy goods from different vendors. Generally speaking, the marketplaces are the mediators between the buyers and the sellers. The clients look for the product or services they need, book them, and buy.

Marketplace MVP: Types of marketplaces

As the online marketplace industry grew, the more kinds of marketplaces appeared. Here are the most popular types of online marketplaces: 

  • Goods and products 

Marketplaces that sell goods and products are often closely related to e-commerce. This type of marketplaces operates by charging a fee during a payment transaction. 

Examples: eBay, Amazon, Etsy, AliExpress.

  • Services 

Service marketplaces are especially popular with B2C and C2C types. It means that either businesses or customers provide services to clients. This type of marketplace can operate on different marketplace monetization models, including commission, subscription, or advertising models.  

Examples: Uber, Airbnb, Booking.com, Couchsurfing, Upwork.

  • Media

The participants of this type of marketplaces buy and sell the products of their intellectual work.

Examples: TravMedia IMM, Matpra Media Marketplace, MediaMath.

  • Investment and crowdfunding 

The marketplaces can also be a solution for business-to-business communication. With crowdfunding marketplaces, it is possible to find investors, suppliers, or deals worth thousands or even millions of dollars.

Examples: Kickstarter, Indiegogo, CircleUp. 

How to Develop Online Marketplace MVP

What is the Minimum Viable Product (MVP)?

If you have an idea of a service that will be useful to your target audience, surely it is high time to implement it and develop marketplace MVP.

However, it would not be reasonable to start with the development of a fully-featured product immediately. It will take a huge amount of time and money. And upon its release it may come out that the idea is no longer viable. So the clients are not ready to pay for this product they do not need.

So how to avoid such a situation and to save your resources (time, money, time)? Firstly, conduct research on your target audience by presenting them with your marketplace MVP.

Minimum Viable Product (MVP) is the first version of your product which has enough features to attract early adopters. As well as validate the idea but does not contain any extra functions.

Building an MVP will help you to:

  • check if your product is interesting to the target audience 
  • define if the core functionality is chosen correctly
  • find out which features are the most useful and popular
  • create a base of potential clients and early adopters of your product
  • determine the possible problems, in order to prevent or solve them at this early stage.

Is an MVP so different from a fully-featured product?

In fact, there is a big difference between an MVP and a fully-featured product. An MVP helps to validate the target audience. Unlike a fully-featured product that is developed to serve the particular target group. In addition, a marketplace MVP development always costs less compared to a fully-featured product.

The cost of an MVP is lower than a fully-featured product’s. However, it is a mistake to think that an MVP is raw and poorly made. An effective marketplace should be a qualitatively-driven application. It should contain only the most important features. The features that are capable of solving the users’ most critical problems.

Having a successful MVP helps to reduce the time and money for a fully-featured app. It allows you to present it to a loyal, validated audience.

 

Marketplace MVP: Correct discovery phase process

Why does your marketplace need an MVP?

Idea Validation

You may love your ideas,  each and every business idea  – requires double-checking.

If it turns out that the users are not ready to pay for your service, it will help you save money by not investing in a non-viable product. In case some features appear to be unpopular, you will know at an early stage. And will not waste your resources by developing them further. 

If the users like the idea of your marketplace, they will become early adopters of your product even with its minimal version. And will probably remain loyal, even if competitors decide to launch something similar.

3 reasons to validate your marketplace idea:

  1. Lack of experience. Well, a vendor may be great at business. But not every vendor knows how to create a marketplace MVP product which would be strong and reliable to fit the market. 
  2. Time. When you are a startup, time is everything. Your competitors may develop their products faster than you. And the faster you get market feedback, the faster you can release a full version of your marketplace.
  3. Time-to-Market Reduction. You can spend a year or more on developing a fully-featured product. But why? Take a few months on delivering the core functionality with an MVP to your audience. Thus, moving ahead of your competitors. Time can be of the essence to some types of marketplaces. Start with something small and promising and at the same time of high quality.

As we can say from Sloboda Studio’s experience, the development of MVP usually takes from a couple to 6 months.

Costs Saving

Of course, MVP development costs some money, too. But it is still less expensive than a fully-featured project. It is worth spending a solid budget only after validating your business idea. Meanwhile, you can invest this money in promoting your marketplace MVP to early adopters.

MVP attracts early adopters

Early adopters are the first people who are gonna interact with your product. Why are they important? Early adopters not only help to test the features of your marketplace but also form your initial pool of loyal users.

Fundraising

After launching your marketplace MVP and getting enough traction, you can go ahead and pitch your marketplace to investors. The important thing is that you should have numbers to justify your request to raise funds.

The features of an online marketplace MVP

Although MVP is not a fully-featured product, its functionality should be sufficient to satisfy the needs of your target audience and to understand which of them are the most effective and should be developed first. We have experience successfully launching products with the following functions:

Although MVP is not a fully-featured product, its functionality should be sufficient to: 

  • satisfy the needs of your target audience 
  • understand which features are must-have and which are not needed by users

Here are the most common and requested features for building an online marketplace MVP:

Homepage

The homepage is the very first page. Your customers will see it when they come to your web application. As usual, this page contains all the valuable information about your marketplace. This could be description, greeting messages, and some of the key functions.

Salita Homepage

Salita Homepage

Registration

While a home page is the face of your project, the registration page is a door. Creating an account is one of the first things your customers are gonna do when they decide to use your marketplace. Add various options of registration, like signing-in with an email or social networks. Otherwise, your customers just won’t be able to buy or sell goods on your marketplace.

Salita Registration Page

User Profile

The user profile section is equally important for both suppliers and vendors. The vendors need to know some key information about the suppliers or sellers and vice versa. 

Well, some may say that buyer’s profiles are not that necessary to fill in. But some suppliers may need this information for safety reasons. For example, Airbnb landlords may be interested in buyers’ profiles so they could understand to who they rent their apartments.

Airbnb User account

User Roles

Any marketplace has at least two types of customers. For example, you can allow your users to choose between being consumers and suppliers or buyers or sellers. Consumers post the job and specify the requirements for suppliers. Suppliers can see all suitable jobs, detailed information about the consumers, and send them requests or messages.

Let’s take for example Salita. This is a marketplace of interpreters for which Sloboda Studio developed a marketplace MVP. This service divides its users into three types of roles:

  • Interpreters
  • People who would like to book an interpreter
  • Organizations who would like to book an interpreter
Marketplace MVP: TikkTalk User Roles

Salita User Roles

Search

Every user journey starts using a marketplace by searching for the needed services. Your search system should be simple and understandable for users. The search tool allows your user to find any product within your marketplace with a single click.

Usually, users either search by a keyword or category. Additionally, to searching, you can also add filtering, sorting, and tagging.

Marketplace MVP: Amazon Search & Filters

Amazon’s Search & Filters

Booking

As soon as a user decides what service provider to choose, they would want to book a service. Your booking features should be marketplace specific. For instance, for a Clarity and Airbnb-like marketplace. Here you would want to include a built-in calendar.

Marketplace MVP: Airbnb Calendar

Airbnb built-in calendar

Notifications

This feature enhances the user experience for the marketplace customers and generally boosts users’ activity. 

The notifications are helpful when it is needed to inform users about the:

  • service upgrades
  • new features
  • new messages from other platform members
  • their order requests

Notifications can be arranged as push notifications inside your marketplace platform. Or just as text messages or emails.

Marketplace MVP: Airbnb Notifications

Airbnb Push Notifications

Product Page

This feature provides your users with detailed information about each product or service your marketplace offers. 

Usually, the product page has:

  • name of an item
  • pictures
  • short description
  • features of an item

Later on, you can extend the product page. For example, an ability to post video reviews. 

For marketplaces, the product page is one of the most important web pages. It is a point where buyers decide whether they need to make a purchase or not.

Marketplace MVP: Amazon Product Page

Amazon Product Page

Messaging

The Messaging tool allows users to communicate with each other. The buyers can use this tool to ask sellers for some product details, delivery, any costs, and payment-related questions.

Marketplace MVP: Airbnb Messaging

Airbnb Messages Feature

Payments

Any marketplace can’t survive without a payment system. 

A marketplace can use one of the below-mentioned payment flows:

  • Prepayment
  • Escrow payment
  • Post payment

Escrow payment is a commonly used marketplace payment flow. With this model, a marketplace charges a user at the moment of booking. Although, a payment provider, for instance, Stripe.

For purchasing goods, customers usually pay with a credit card. To enable these payments marketplace has to be connected to one of the payment providers like Braintree or Stripe. In some situations, a correctly chosen payment method can expand your business internationally, helps to increase sales, or even reduce the fraud risk. 

The most popular payment gateways for marketplaces are:

  • Stripe
  • Braintree
  • PayPal
  • MANGOPAY
  • Adyen
  • Skrill
  • Square
  • Dwolla
  • Google Checkout
Marketplace MVP: Airbnb Payments

Airbnb Payment Page

Read more: How to Choose a Marketplace Payment Solution

Feedback

After cooperation, the consumers and suppliers can leave feedback about their partner’s work. In case of any problems, the Administrator acts as a mediator in the disputes between the c