You're not alone if you're thinking about starting a marketplace. A quick search for "online marketplaces" shows that this is a popular business model with a ton of potential. But as with any new venture, there are a few things you need to know before you create a marketplace.

In this article, we'll walk you through the basics of how to build a marketplace. So whether you're just starting out or have been in the game for a while, read on for everything you need to create a marketplace website!

Table of Contents

What is an online marketplace
How to build a marketplace
    ➤  Proof of Concept (PoC)
    ➤  Minimal Testable Product (MTP)
    ➤  Minimum Viable Product (MVP)
    ➤  Project documentation
    ➤  Launch the marketplace website & grow your online marketplace user base
Marketplace website development
    ➤  Analysis and investigation
    ➤  Designing an app for a marketplace
    ➤  Frontend and backend development
    ➤  Quality assurance and bug fixing
4 common mistakes made when building an online marketplace and how to avoid them
    ➤  Mistake 1: Bad user experience
    ➤  Mistake 2: Untrustworthy platform
    ➤  Mistake 3: Insufficient data analysis and interpretation
    ➤  Mistake 4: Insufficient professional follow-up and marketing
The future of online marketplaces and how they will continue to change the way we do business

What is an online marketplace

Online marketplaces allows buyers and sellers to transact business online. The most well-known online marketplace is Amazon, but many smaller, niche online marketplaces also specialize in specific types of goods. For example, Etsy is an online shopping of handmade goods, while Fiverr is a marketplace selling digital services.

Online marketplaces offer a convenient way for buyers and sellers to do online sales and shopping, by connecting and conducting transactions online. Marketplaces also allow businesses to reach a larger audience of potential customers than they would be able to get on their own. This type of platform has become increasingly popular in recent years, thanks to the rise of the sharing economy and the ease of online transactions.

Some of the benefits of online marketplaces include:

  • Increased reach: An online marketplace gives you access to a larger pool of buyers (and vice versa).
  • Wider variety: Marketplaces offer diverse products and services, making it easy for buyers to find what they want.
  • 24/ 7 operation: Unlike brick-and-mortar businesses, you can have an online shopping moment around the clock.
  • Lower costs: With no physical storefront, online sales has lower overhead costs than a traditional business.
  • Convenient features: Customer reviews and ratings provide an excellent way for consumers to make better decisions and save time and money.

These are a few reasons why you building a marketplace website might be a good option for your business.

How to build a marketplace

To build an online marketplace that is successful is no small feat, but it's doable with the proper planning and execution. We have different routes and products available at imaginary Cloud before we create a marketplace website.

Proof of Concept (PoC)

It is a good idea to research your idea before investing time, money, and energy in it. To begin, you must create a PoC of your online marketplace, a sketch or simplified model of what you intend to build. It doesn't need to be a fully functioning version but should give an idea enough to give potential clients and investors an idea of what your marketplace will look and feel like. It proves that your idea will work in the real world, so stakeholders and investors feel comfortable moving forward with the project. Proving viability early in the project life cycle can put everyone at ease during project execution.

Minimal Testable Product (MTP)

The purpose of the MTP is to test the idea/site viability, and usability and know the feedback from a client base. MTP's approach in software development is to create functional features iteratively, so you have something to showcase for stakeholders.

The MTP development pipeline includes creating wireframes, mockups, prototypes, and the MTP itself, which involves Imaginary Cloud’s Product Design Process.

Minimum Viable Product (MVP)

MVPs are products with enough features to attract early-adopter customers and validate product ideas early on. MVPs are helpful for product teams because they allow them to receive user feedback quickly so they can iterate and improve their products. The version of a new product allows a team to collect the maximum amount of validated learning about customers with the least effort. This MVP quickly and efficiently determines if a proposal is viable without high cost or risk.

Tip: Building PoC, MTP, and MVP and their technical specifications will be helpful when you begin developing your product. As a result, it may make sense to hire a professional to create high-quality online marketplace products.

Differences between PoC, MTP and MVP

MVP Service

Project documentation

Now that you have a better understanding of what you want and will take to build an online marketplace, it's time to start developing the project documentation. It includes things like wireframes (detailed plans for each page of your website), user flows (diagrams that show how people will navigate through your site), and a sitemap (an overview of all the pages on your site and how they're interconnected).

Creating extensive project documentation may seem pointless, but to build an online marketplace will save you a lot of time and money. The developers building your marketplace website use this documentation. That is why it is important to get professional advice, so the documentation is as clear and straightforward as possible.

This stage ensures that everyone working on the project understands the product's purpose and functionality.

Launch the marketplace website & grow your online marketplace user base

The next phase is to launch the marketplace website, where you need to attract sellers to your online marketplace. That's why you must focus on creating a great user experience (UX) so that people continue using your marketplace website and recommending it to others. And then, start selling.

Marketplace website development

As a new marketplace startup, you're probably short on know-how in creating a marketplace website, time, and resources. You can save a lot of headaches by outsourcing the development process to another company without sacrificing quality. As a result, you ensure that products are built efficiently, without technical debt, and within a short time frame.
As with creating any digital product, building an online marketplace goes through a software development life cycle. It's an iterative process and includes the following stages:

Analysis and investigation

Conduct a comprehensive analysis of the market, investigate the demand, and assess the competition. If you don't have a business analyst, you can hire one. With the help of a professional, you'll receive clear project specifications that will serve as a solid foundation for your development efforts.

Designing an app for a marketplace

How to build a marketplace website that stands out? By hiring a skilled UX designer. They're in charge of ensuring your app's users have the most enjoyable possible event. Just like an eye-catching and elegant interface, a well-designed UX is a competitive advantage.

Frontend and backend development

The duration and cost of developing a marketplace website depend entirely on the app's functionality, the selected technology stack, the team's size, and many other factors.

Technology stacks for building a marketplace

There are many technology stacks to create a marketplace website. But not all of them are equally suitable for your particular project. The most popular tech stack among marketplace startups is the MEAN stack, which includes MongoDB, Express, AngularJS, and Node.js.

This stack is often used to develop data-driven single-page web applications because it provides a fast development environment and can be easily scaled. Besides the MEAN stack, there's also the LAMP stack (Linux, Apache, MySQL, PHP), which is considered more stable and secure than MEAN. It's often used to develop content management systems or eCommerce platforms.

Imaginary Cloud makes custom apps for marketplaces, and our technology stack depends on each case's specifics. Here's what we can give you:

  • Frontend development: React, Angular, Vue.js, Webflow.
  • Backend development: Node.js, Python, Rails, Django.
  • Mobile app development: React Native, Flutter.
  • Databases: , MongoDB, MySQL, Oracle.
  • Cloud solutions: Amazon Web Services, Azure, Google Cloud.

To be as efficient as possible, we combine our core technologies, use the latest trends, and research new tools. Each project is different, and so is the tech stack it needs.

Want to talk about the tools and technologies that can make your idea come to life? Setting up a free meeting with us is the easiest thing in the world!

Quality assurance and bug fixing

When developing high-quality software, the development and QA procedures should co-occur. Some business owners believe that software testing is a straightforward task they can handle independently. But a test engineer can use a variety of ways to ensure that your clients don't run into any problems when using the app.

Your marketplace website development team should include the following members when beginning from scratch:

  • A business analyst
  • A UX/UI designer
  • Software developers (frontend and backend pros, or full-stack programmers)
  • A manual or automation QA engineer, depending on your project needs

4 common mistakes made when building an online marketplace and how to avoid them

Before you start, there are a few things to remember. Let's take a look at four mistakes to avoid when creating a marketplace website:

Mistake 1: Bad user experience

Creating a good UX should be a top priority for any online marketplace. After all, if buyers and sellers can't find what they're looking for or have a bad UX using your platform, they're not likely to come back. When you create a marketplace, think about what would make their navigation better.

Furthermore, the average user takes seven seconds to develop the first impression of a business. Therefore it's essential to inspire them to browse and buy from your marketplace website. Even when launching an MVP to test an idea, the client feedback will determine whether to continue investing the platform.

As an entrepreneur, you want satisfied clients who return and recommend your platform. So make sure the platform is clear and organized, with a quick and easy way to check-in and out.

Mistake 2: Untrustworthy platform

Many consumers cite privacy and payment system security as reasons for avoiding online marketplaces. Thus any marketplace entrepreneur who wants to develop must take these issues seriously.

But it's more important for an online marketplace, where users share sensitive information like credit card numbers and home addresses. And unreliable payment systems erode trust, scare off clients, and reduce sales.
So make sure you know how to build a marketplace that has robust security measures to protect your users' data. Always strive for transparency, nice browsing and shopping experiences, and transparent information about vendors, regulations, restrictions, and help.

Mistake 3: Insufficient data analysis and interpretation

Data is essential for understanding your marketplace's performance and where you need to make improvements. But it's not enough to collect data - you also need to know how to interpret it. Otherwise, you won't be able to make the necessary changes to improve your marketplace website.

Make sure you have systems in place to collect data about your client's behavior, including what they're searching for, what they're buying and not buying. Use this data to improve the UX on your platform and increase conversions.

Performance, viability, and evolving technology must be constantly monitored to guide your strategy. Information is power; thus, collecting and recording data and evaluating it to better your business is crucial. Choose the best data collecting and analysis tools to define key performance indicators (KPIs). Focus on relevant metrics to determine market strategy.

Mistake 4: Insufficient professional follow-up and marketing

Just because your marketplace is online doesn't mean marketing isn't important. It's probably even more important to market an online marketplace than a traditional business. That's because there's so much competition, and it can be tough to stand out from the crowd. But with a well-thought-out marketing strategy, you can get the word out about your marketplace and start attracting users.

Success requires more than a strong company idea. Find the ideal people to help your business grow. Developing a marketplace website with the proper professionals allows you to construct a platform with the correct tools for the project. Their advice and talents are crucial for creating a sustainable, successful marketplace that attracts and retains consumers. Use this team to monitor communication concerns, plug-ins, integrations, payments, and security that can jeopardize UX.

After launch, you need people who can develop and implement a continual marketing campaign. Maintain effective communication, explain your industry's benefits and distinctive characteristics, and build partnerships to aid with news and social media.

You'll be on your way to creating a successful online marketplace by avoiding these four mistakes!

The future of online marketplaces and how they will continue to change the way we do business

It's hard to imagine a world without online marketplaces. That's why the search for "how to build a marketplace" is increasing. From Amazon to eBay, these websites have revolutionized the way we do business. We can now buy and sell products and services with a button. But what does the future hold for online marketplaces?

Online marketplaces will likely continue to rise in popularity. More businesses are moving online, and marketplaces offer a convenient way for buyers and sellers to connect. Marketplaces also provide security and trust often lacking in other online transactions.

New marketplace development technologies are evolving so swiftly it's hard to imagine the industry in a decade. Here are some upcoming technologies:

1. Voice-activated search
People demand convenient and speedy technologies in today's fast-paced surroundings.
Websites are adding voice search. 72% of individuals look for things using voice. Voice commands boost site speed and use less space than a search box.

2. Unified Inventory's importance
Having one source of inventory truth for all sales and marketing channels ensures your inventory can be sold no matter where it is.
Customers can check in-store stock, click & collect, and click & reserve with livestock counts online.
Where's the customer's stock? What's left at the store? Who else can fill the order? A unified commerce solution enables real-time educated selections and presents all accessible alternatives at checkout, creating a great buying moment.

3. Recommerce
Fashion recommerce has never been hotter. Selling used things is called reverse trade.
Thrift stores to upscale boutiques follow a recommerce strategy. Digital markets have moved resale from brick-and-mortar to online.

4. Vertical Markets
A vertical market limits your target audience to be the best in your field. Niche-based platforms are trending. Since the minor genre can't get noticed on large web platforms, they formed their own. Smaller niches are also seizing possibilities.

5. Hyper-personalizing
Hyper-personalization personalizes an online experience using data, analytics, and AI. For example, a shopper searches for skin care products online, and the site recommends related items based on their past.
By customizing customer experiences, organizations may engage their audience, strengthen consumer bonds, and generate new leads.
AI can help online merchants optimize the service quality on and off their online marketplace by using business and customer data to make better business decisions and anticipate the future.

6. Commerce Composable
Composable Commerce is an architecture of multiple solutions and technologies integrated to deliver the whole marketing, sales, and service lifecycle while keeping customer engagement and company goals in mind. This modular strategy allows each organization to choose best-in-breed solutions for its tech stack.


With its huge potential to connect people and businesses worldwide, marketplace websites are rising. And with modern technology being what it is today, there are more online marketplaces than ever!

It's essential to create your own successful business by providing excellent service on all levels, from analyzing user needs to develop creative designs that will engage them completely and ensuring everything works seamlessly when launched into production.

And don't forget to keep updated with current and future trends.

Are you looking to launch a new web or mobile application project?

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