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Marketplace Development: Building an App for Your Niche Industry

by | November 15, 2023

In today’s age of technology, digital marketplaces are transforming the way that businesses operate and interact with customers. In fact, one-third of all US business now flows through e-commerce, and 63% of that is through marketplaces.  

While many of us are familiar with the big players in the market, such as Amazon and eBay, some businesses are getting ahead of their competitors by building their own marketplace that targets their niche industry.  

This is possible through a detailed marketplace development strategy, which involves designing, building, and maintaining a marketplace where buyers and sellers can connect. But with such high competition, how do businesses build an online marketplace that can flourish in the digital economy? 

In this article, we’ll dive into the world of marketplace development, where we’ll discuss key features, the technical side of a marketplace app, and everything else that online marketplace development entails. 

Understanding the Marketplace Ecosystem 

Just because you’re new to the world of online marketplaces doesn’t mean you can’t make your mark. Let’s take a look at some of the key points. 

Definition of Online Marketplaces

An online marketplace is a type of e-commerce site where products and services are sold by a selection of third-party vendors. These websites provide an easy shopping experience for customers, allowing them to compare multiple companies and find the best available deals. For businesses, it helps them reach a larger audience, boost sales, and create new trading partnerships. 

Types of Marketplaces

There are various types of digital marketplaces, each catering to a specific industry, product, or service. Marketplaces are split into 3 main categories: B2B (business to business), B2C (business to consumer), and P2P (peer to peer). Within these 3 areas, there are a vast number of subcategories, including: 

  • E-commerce marketplaces: e-commerce platforms such as Amazon connect buyers and sellers with a wide range of products. 
  • Service marketplaces: Platforms such as Upwork focus on connecting workers with clients seeking services. 
  • Niche marketplaces: This is a specialized market that targets specific industries or interests (think Etsy for handmade crafts). 
  • Real estate marketplaces: This type of online platform connects clients with realtors, brokers, and property managers. 
  • Food delivery marketplaces: Apps like Uber Eats link local restaurants with hungry customers. 

We won’t bore you with a 3-page long list, but the point stands: both businesses and customers love a well-made digital marketplace. What’s important is understanding where you fit in all of them. 

Key Components of a Marketplace

The features of digital marketplaces may vary depending on the industry. That said, here are some of the main components that should be considered during marketplace development: 


  • User profiles 
  • Product/service listings 
  • In-platform messaging 
  • Seller verification 
  • Shipping and delivery management 
  • Payment processing 
  • Ability to review products and services 
  • Easy navigation 

The Rise of Marketplace Development and Its Impact on E-Commerce

Online marketplace development has escalated in the past couple of years, with the digital marketplace expected to reach $11.9 trillion by 2025. The emergence of marketplace development has allowed for a larger market reach, access to a diverse range of products, the creation of innovative business models, and an enhanced customer experience.  

This change has had a direct impact on consumer behavior, bringing about a new demand for a convenient and easier shopping experience. Companies wanting to build a marketplace must keep up with advanced technology and new customer preferences. 

Preliminary Considerations Before Building a Marketplace

Before we jump into how to build an online marketplace, there are a couple of points worth discussing. The very first thing you should do before you dive into marketplace development is to perform market research and identify your niche. With so many online marketplaces available, you need to gather and analyze information about your target market and industry trends. How do you identify and reach your target audience? Can your digital marketplace stand out from the rest and generate a profit? 

Once your niche is defined, you should create a business model canvas to better describe your online marketplace in a more structured way. Next, you should define your value proposition and unique selling proposition. This outlines what you plan to offer customers and why they should choose you over other platforms.  

And of course, legal considerations and compliance should always be of utmost priority. They must be applied to every step of the process, including the business structure, terms of service and privacy policies, and intellectual property rights, among others. 

how to build an online marketplace

Planning Your Marketplace Development

So, how to build an online marketplace? Online marketplace app development is a complex task, but setting clear goals and working with an experienced marketplace development company helps you stay on the right path. 

Setting Clear Objectives for Building a Marketplace Website or App

Setting clear objectives helps e-commerce marketplace developers better understand how to focus their efforts. Bespoke software developers will take this information and create a custom solution for you. Some of the objectives you can define include: 


  • Target audience 
  • Marketplace features 
  • Compliance and legal considerations 
  • Customer support 
  • Scalability 
  • Milestones 
  • User experience 
  • Partnerships 

Understanding the User Journey for a Marketplace Platform

A user journey is the set of steps that a user takes in order to accomplish the desired goal of a specific marketplace platform. This helps you visualize what customers are thinking, feeling, and doing, allowing you to create a better experience. It also gives valuable insight into why a user chose to complete the order or why they decided to use another platform.  

There are many tools online to help with this process. Check out Hubspot’s free customer journey templates. 

Choosing the Right Marketplace Development Company

As of 2023, there are around 27.7 million web developers in the global market. Finding options is definitely not a problem; choosing the right one is. When choosing a software development company, you should consider experience, skill, client reviews, product development methodologies, case studies, and more.  

It’s also crucial that the web development company has experience with custom marketplace development. This means they can create the marketplace from scratch, allowing them to customize it to your needs with the proper features. 

We encourage you to explore Scopic’s case studies, where you’ll better understand how we’ve helped businesses reach their goals. 

Marketplace Platform Design

A well-designed platform is the key to attracting buyers and sellers. It should be easy to navigate and facilitate interactions between the two groups. Three important elements that developers must consider are: 


  • UX/UI design best practices for an online marketplace. Creating a positive user experience means developing a user-centric design that’s catered to the target audience. Developers will apply design best practices to guarantee an easy-to-navigate marketplace. 
  • Responsive design for multi-device accessibility. This guarantees that the marketplace has great navigation and adapts to various screen sizes and orientations. This requires regular testing to keep up with constantly evolving devices. 
  • Building a marketplace brand identity. A strong brand identity helps you stand out from the competition. It improves customer loyalty and brand recognition and attracts new users. 

Key Features of a Marketplace Website

Developers create digital marketplaces based on specific criteria and user intent. However, there are some must-have features that most web app development specialists incorporate into a marketplace: 


  • User account management, product listings, and search functionality  
  • Simple sign-up process 
  • Secure payment processing, transaction management, and platform temporal deposit 
  • Search and browse functionality 
  • Admin panel  
  • API access for integration  
  • Responsive website design 
  • Easy options for ratings, reviews, and disputes and conflict resolution 
  • Advanced vendor dashboard
  • Notification system 
build a marketplace

Developing Your Marketplace App

E-commerce marketplace developers use their knowledge and skills to find the best solutions based on your specific industry and goals. They’ll work closely with you to choose the best features for your project. 

Deciding Between Native, Hybrid, or Web Apps for Marketplace App Development

Since the marketplace itself is a powerful server-side system, it’s usually only hosted on one of the cloud platforms and lightweight end-user (buyer) UI applications. That’s why an important part of the development process is choosing the type of app you want to build, depending on your specific requirements and goals. 

Native apps are accessed through the app store rather than on the web and are typically Android or iOS apps. These platform-specific apps are generally considered to have better performance, security, and user experience. However, they have a longer development time and higher costs. 

Web apps are accessed through web browsers; users can access them on any device with a compatible browser. This type of app generally has the lowest performance and limited access to features. However, their code can be reused across different platforms easily, and it is considered the most cost-effective and fastest option. 

Hybrid apps can be downloaded and installed on multiple platforms, combining elements from both native and web applications. Since this is a cross-platform app, there may be more limitations in features and performance when compared to native apps. They often require additional work to achieve a great user experience, but they tend to be more cost-effective and faster to develop than native apps. 

Push Notifications and Mobile-Specific Features

Push notifications may include discounts, limited-time offers, order updates, new listings, or even reminders to complete a purchase. The goal is to urge users to take the desired action, resulting in increased sales and a better user experience. A good practice is to allow users to customize their push notifications within the app; this respects their preferences and doesn’t overwhelm them with notifications that they may not be interested in. 

Marketplace app developers will also include mobile-specific features that cater to your target audience. This may include geolocation services, mobile payments, in-app messaging, QR code scanning, social media integration, and a range of other features that cater to mobile device users. 

Marketplace App Development Cost Considerations

So, we’ve discussed some of the important elements of marketplace app development, but there’s still that lingering question: How much does marketplace app development cost? 

There are many factors that could affect the cost of marketplace app development, with complexity being the biggest component. For that reason, apps can range from anywhere between $20,000 and $300,000+. 

Since this is a huge range, the best way to get an accurate estimate is to consult an application development company. 

How to Build an Online Marketplace: The Technical Side

And of course, the software development process has a technical side that experienced developers must tackle. Here are some of the elements that must be considered: 


  • Choosing the right technology stack for online marketplace development. Choosing the right technology stack may seem overwhelming, but experienced developers have a deep understanding of software products, programming languages, and other tools that may be used to create an online marketplace. This will address both back-end and front-end development. 
  • Security aspects and reliability. Building a highly reliable and secure application should be a high priority for your project. One of the ways to achieve this is by creating a scalable system, which helps increase performance and improve the sustainability of your marketplace. Developers will apply security best practices, such as ensuring secure user authentication, implementing secure payment processing, and protecting against common web application attacks. To build a scalable marketplace, developers implement load balancing and caching, use cloud-based infrastructure, and choose the right technology stack, to name a few. 
  • Multi-Vendor Marketplace Dynamics. Multi-vendor marketplaces have multiple sellers and a vast product catalog. The diversity among products and sellers means that developers must customize the online platform to accept a wide range of payments, have accurate tax calculations, integrate with multiple shipping carriers, and build a multi-vendor marketplace that has advanced features to streamline the process. 
  • Understanding the software developer marketplace for hiring talent. Just as you want to create an online marketplace, you can use software developer marketplaces to compare different companies and freelancers. Online marketplaces such as Guru connect you with talented developers. 

The Future of Marketplace Development  

The demand for niche marketplaces has skyrocketed and will continue to grow over the following years. As more online marketplaces emerge, the role of AI and machine learning positions itself as an important tool used by marketplace developers. 

One of the current marketplace trends is chatbots, which have played a major role in customer service in recent years. The use of conversational AI and machine learning allows marketplace owners to engage with their audience and answer questions in real time. 

Another trending theme is smart recommendations, which involves AI analyzing users and making recommendations based on their behavior. 

Marketplace developers must employ these new trends to create a more personalized experience for the customer. As time goes by, we’ll continue to see advanced features that incorporate AI and machine learning. 


Online marketplaces are growing by the year, and customers are increasingly turning to them as a means to find products and services. While it’s a complex task to build a marketplace, experienced developers understand the importance of creating a custom solution that applies security best practices and advanced features. 

If you’re ready to build a marketplace and start increasing your revenue opportunities, contact us at Scopic. Our team of experienced developers uses modern techniques to make your niche marketplace stand out from the crowd. 

About Marketplace Development Guide

This guide was authored by Baily Ramsey, and reviewed by Vyacheslav Korchagin, Principal Engineer with experience in leading and delivering complex software and application development projects.

Scopic provides quality and informative content, powered by our deep-rooted expertise in software development. Our team of content writers and experts have great knowledge in the latest software technologies, allowing them to break down even the most complex topics in the field. They also know how to tackle topics from a wide range of industries, capture their essence, and deliver valuable content across all digital platforms.

Note: This blog’s images are sourced from Freepik.

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