- Your Guide to Marketplace Costs
- Analyze the Market and Start Small
- Building a Successful Marketplace
- Resources Required for Developing a Marketplace.
- Finding Your Development Partner
- Calculate the Costs of Developing a Marketplace
- Process of Developing a Marketplace
- How to Choose the Right Development Company?
Your Guide to Marketplace Costs
Digital marketplaces are becoming popular day by day. A marketplace platform consists of a buyer-seller community, like eBay and Amazon. Amazon currently has over 300 million active users and generates a revenue of more than $170 billion annually.
Online marketplace connects service providers and customers via an engaging platform. Service providers and service seekers need a bridge, and an online marketplace serves as that bridge. The number of marketplaces has increased dramatically in the past few years for the extensive convenience offered. Also, a marketplace is accessible to a broader audience than a retail store.
Customers prefer convenience over anything. It’s the development team’s responsibility to ensure that the marketplace platform allows users to access the inventory electronically and have real-time information about all the products.
The cost of developing a marketplace app depends on various factors, including app features, platforms, and more. Let’s have a look at the process and costs of developing a marketplace platform.
The cost of a marketplace depends on the following factors:
- Type of Platform – Desktop, Mobile, or Both
- Platform –Android, iOS, Windows, or others
- Features of the Marketplace
- Functionality of the Marketplace
- Design – Basic, Individual, or Customized
- Development Partner
Analyze the Market and Start Small
The first step is to focus on global and local competition when creating an online marketplace. Instead of competing directly with powerhouses like Amazon or eBay, shift your attention towards building an exceptionally well-designed app with key features. Start small, target a niche, and gradually expand your business.
With an increase in marketplaces across the globe, competition is getting tighter. Your marketplace must have a unique selling proposition and should target a niche.
Here is why you investing in a marketplace is a lucrative business opportunity:
- Because it’s not a brick and mortar store, marketplaces require a less initial investment.
- In 2019, $2.03 trillion was spent globally on the top 100 online marketplaces.
- US-based marketplaces enjoyed a sales growth of 18% in 2019.
- In 2020, online shopping is expected to hit $4 trillion.
- Millennials spend $420 on average during Black Friday and Cyber Monday.
Building a Successful Marketplace
The success of a marketplace depends on its innovative features and convenience offered through the platform. Amazon has over 5 million registered vendors, allowing an incredible number of vendors to use the platform. Amazon’s scalability is one of the many reasons for its popularity, offering almost everything customers might night. Being a hybrid marketplace, Amazon connects buyers and sellers to interact on a shared platform and is self-producing as well.
Developing the right marketplace model is the key to building an engaging platform. The right marketplace offers features that support both buyers and sellers. Buyers want to buy, and sellers want to sell, which means as a developer, you need to design a platform that will:
- Allow sellers to list, sell, and dispatch products efficiently.
- Allow buyers to search desired products, place orders, and have a hassle-free shopping experience.
- Offer seamless experience to buyers and sellers via the platform.
Resources Required for Developing a Marketplace
The development team for a marketplace usually includes:
- 1 X Project Owner
- 2 Web Developers
- 3 Mobile App Developers
- 2 UI/UX Designer
- 2 Devops
- 1 QA Engineer
- Solution Architect
- Database Administrator
|Project Manager||$20+||Ensures effective communication between the client and the development team. Ensures deadlines are met and helps avoid misconduct with the client.|
|Web Developer||$25+||Is responsible for the right communication between the database, server, and the marketplace platform. Takes care of the flawless functionality of the web.|
|App Developer||$25+||Writes the codes and integrates the mobile app with the data source. Is responsible for fixing bugs in the app.|
|UI/UX Designer||$20+||Takes care of the interface. Ensures that the platform’s look and feel resonate with the brand persona. Responsible for web and app optimization.|
|System Administrator||$20+||Responsible for uninterrupted system administration, supporting the development team, and enabling successful deployment.|
|QA Engineer||$20+||Ensures that the platform meets all requirements, controls design and code quality, and ensures that the platform runs flawlessly.|
How Much do We Charge?
$50 per hour, for everything!
What Does this Mean?
Now, when you look at the charges of every individual professional, you might notice a huge difference between the hourly rates of a freelancer and the hourly rate of a full-fledge software agency like Cubix. A project manager charging more than $20 an hour focuses only on providing his expertise and agile hours when it’s flexible. Their hours don’t include flexible meetings, extra hours per week, and comprehensive workshops breaking down the project life cycle for clients.
When you’re looking to outsource your marketplace development project, there are several factors that come into play. You can easily hire different professionals and make up a team, or you can reach out to a software agency that will do your work for you, like Cubix. The major difference is the variation in basic hourly rates. Let’s go in detail about the price structure.
With freelancers, you have to pay $20+ to 5-6 individuals to turn your marketplace app into a reality. With a software agency like Cubix, you can have a standby team on your side, charging only $50 per hour. Yes, that’s way more than the hourly rate of a freelancer, but the benefits you reap out of $50 per hour are commendable.
When you don’t have the technical skills to do the job, you rely on outside opinions and information. This is where software agencies come into play. The planning, approach, and execution of complex solutions, for instance, a marketplace app, is advanced 5 times more through a software agency. No one charges a certain rate without considering all affecting factors. if we charge $50 per hour, we commit to delivering quality work as well.
$50 covers a whole range of activities included in marketplace development. At Cubix, or a software agency, for that matter, you will find years of experience in their pocket. We’ve been in this industry for more than 12 years, which allowed us to gather firsthand experience taking over some of the simplest and most complex projects of all time. But, not one of them seemed impossible because of the team we have. Every seat we have at the table, every resource we hire, every hour they give in, and every ounce of hard work that goes into turning your idea into a reality is why we charge more than freelancers.
With freelancers, you have the choice to pick people and assign tasks. With a software agency, we choose the right people for your dream project. We do all the work on your timeline, your budget, and your requirements
Developing a marketplace requires a lot of effort, money, and time. When a client is looking to outsource their project, they want to make sure the agency they hired can deliver high-quality results and reach their expectations within their budget.
Finding Your Development Partner
Finding the right development partner for your marketplace is essential to create an excellent platform. You have multiple options to choose from, depending upon your marketplace requirements, budget, time constraints, and other factors.
are some of your choices:
Marketplace Development Costs with Freelancers
Freelancers will develop your marketplace at a fraction of the price. It will help minimize costs but comes with various risks associated, such as miscommunication, zero face-to-face meetings, no project manager, different time zones, and more. These challenges directly impact the quality of the digital product.
Before hiring any freelancer, make sure to do your homework. Go through their projects, identify their interests, and align them with the goals of your marketplace app. You don’t want to work with someone who isn’t capable of understanding your idea.
Let’s take a look at the average hourly rates freelancers charge around the world.
Marketplace Development Costs with App Development Agencies
App development agencies have a team of veteran developers, designers, engineers, mathematicians, creative artists, project managers, and everyone else needed to build extraordinary products. Unlike freelancers, app development agencies have diverse experience, expertise on modern technologies, and infrastructure required for next-level developments. App development companies are your best choice for a flawless platform within your budget.
App development agencies, like Cubix, charge $25 per hour or $1800 per week for a project. No one wants to build another Facebook or another Snapchat. They know it won’t turn successful. Every idea has a Unique Selling Point integrated into it. You just need the right team to identify it.
Understanding $50 Per Hour
To understand more, let’s dive into the breakdown of this price.
When you choose to outsource your project, you firstly share your idea and the requirements needed. A meeting or a workshop is conducted with the team heads and core developers to evaluate and understand every requirement you have for the project. We make sure to dedicate 220 hours to conducting workshops to streamline tasks and revise any errors. Understanding these requirements and drawing out a mind map takes 110 hours for a team which equals at least 4 days, which means every member of the team is putting more than 8 hours every day. What does this mean? $ It gets you professional expertise, multiple workshops, agile working hours, and revision.
Selecting a platform and working on it takes approx. 530-695 hours depending on whether it’s Android or iOS. Designing the web panels, APIs, frameworks, and libraries take up 1589 hours or almost 10 weeks. $79,450 plus $5,500 cover the required development hours where project managers, developers, and UI designers work hard by putting in 10 weeks’ worth of time for your marketplace project.
From revising requirements and choosing a platform, to designing Admin and Service Provider panels and integrating APIs for web services, we involve the client in every step. We stick to the agile model of SDLC as we believe in building relationships with our clients, not a business deal. We aim to make sure the project we deliver is exactly the same or even better than what the client is paying for.
Now, let’s dive into the non-development hours the tech team puts into the marketplace app. The UI designers and core developers work hand in hand for 110 hours to set up the architecture and database of the marketplace platform. 110 hours are divided into 55 hours for each. From research to coding to executing, the project manager, the developers, and the database administrator work relentlessly to deliver things on a strict deadline.
Network, testing and release per sprint take almost four weeks. These tasks take 5.7 weeks to complete requiring the team to put in 973 hours collectively in total for these tasks only. While we charge 50$ an hour, we don’t charge extra for revision and believe in agile working. ‘No’ is not a concept we follow. Listening to the client’s feedback and making changes at the same cost helps nurture our relationships with the clients.
In the tech industry, research is a critical aspect. The team you hire will decide how your dream project ends up. You certainly want to know all your options before choosing who to get in bed with.
Marketplace Development Costs with Silicon Giants
Silicon Giants will undoubtedly cost you an arm and a leg. It is difficult for startups to afford high-end development companies, like Oracle and IBM. The average hourly rate for such companies starts from $150 per hour.
Calculate the Costs of Developing a Marketplace
Costs for Different Platforms
Development costs for a marketplace vary with the platform, due to the difference in platform requirements, device configuration, and more. Here is a breakdown of costs, as per the platform you choose to develop for:
|iOS||$34,650||All iOS devices, including iPhone, iPad, MacBook|
|Android||$26,800||All Android devices, including Samsung, Huawei, Lenovo, and others|
|iOS and Android||$61,450||All iOS and Android devices|
|Web Panel||$42,250||Web portal|
Costs for Different Features of the Marketplace
Features for Service Providers
You may allow service providers to sign-up with their email address, social login, or with two-step verification. It is recommended to have a two-factor verification to ensure the reliability of the service providers.
Feature Cost Sign-Up with Email Address and Password $525 Social Login, with Facebook, Twitter, LinkedIn, Google+ $1,725 Two-Step verification, with a unique code, sent to the users’ mobile phone. $975
The main goal of a seller profile is to provide relevant seller information to customers. The buyer will view contact information, seller rating, and the number of completed orders. Seller profile management includes editing, adding, and removing information regarding the seller.
Feature Cost Simple profile with contact information and rating $525 Complex profiles with one-on-one interaction with customers $900
Ratings and Reviews
It enables transparency between service providers and customers. It develops trust and increases the credibility of the service provider. These reviews and feedback will help sellers improve their products and service and enable easier decision-making for buyers.
Feature Cost Rating and reviews on seller profile $600
Service providers can receive notifications for new orders, accept and decline order requests, view shipping information, and view order status.
Feature Cost Complete order information, from order placement to delivery $300
Seller Dashboard and Analytics
A personal dashboard will allow service providers to monitor and manage their performance accordingly. As a service provider, you want to know which of your products are generating the most revenue, common issues faced by customers, and areas that need improvement. The right metrics will help sellers improve their performance.
Feature Cost Seller dashboard with a graphical summary $750 Analytical metrics to review periodic performance $1800
Features for Customers
Customers can sign-up their email address, social login, or two-step verification. It is recommended to have social login or two-factor verification as users don’t like filling long forms and prefer quick sign-ups.
Feature Cost Sign-Up with Email Address and Password $525 Social Login, with Facebook, Twitter, LinkedIn, Google+ $1,725 Two-Step verification, with a unique code, sent to the users’ mobile phone. $975
Customers do not like waiting for their products to arrive. It is frustrating to wonder when the product will arrive or if it will ever arrive or not. It is important to offer order-tracking, build credibility, and keep the customer at ease.
Feature Cost Order status update via email $975 Real-time tracking of order when dispatched $1050
Some customers browse the marketplace, unsure of what they are looking for. Such customers explore the products and then decide what to purchases. Other customers know what they want and prove to be power searchers. They quickly find it and purchase it.
The marketplace you are developing should cater to both types of customers. Integrate power search tools, which include category filters, product tags, and more.
Data such as most-viewed categories, most popular filters, and top search items can promote sales. It’s your job to make product-searching easy for them.
Feature Cost Arrange products into categories and sub-categories $750 Wish List for users to mark products they are interested in $675
Chat with Sellers
Just like communities, online marketplaces require communication as well. Providing an active communication channel that allows buyers and vendors to communicate freely is essential. In-app messaging is the way to go. A communication-centric platform not only increases user engagement but also enhances user experience.
Feature Cost Live text chat with sellers $150 Audio calls with sellers $675 Chatbot for instant queries $150
Multiple Payment Options
Advanced payment functionality is a core requirement of your marketplace. Enabling multiple payment methods will allow the buyer to complete payment comfortably. Many customers like having the freedom to pay through either credit cards or digital wallets like PayPal.
Feature Cost Description Handle and store card data directly $3,075 Customized branded experience for your clients. Includes Payment Card Industry Certification. Existing mobile POS $2,475 Accepting payments through a mobile point-of-sale app, for example, PayPal. Mobile payment widgets $3,975 Using gateways like Stripe or PayPal. Card data is handled by their libraries, restricting your exposure to PCI compliance and effort of implementation. Using a gateway API $4,000 Applying gateway API gives you full control over user experience. The advanced-development-complexity expense, and gateway lock-in.
Push notifications are integral to engage the customers, push offers and discounts, and reach the customer at just the right time.
Feature Cost Drop messages to customers at any time $375
Features for Admin Panel
The administrator is responsible for moderating the platform. Without an administrator, the quality of the platform can drop fast. Let’s look at the features required by the admin:
The admin will be responsible for approving the registration of all users. Upon registration, users will receive an authorization email, which will confirm their approval to the platform. Verifying users sustains the quality of the platform.
Feature Cost Authorization rights $800
The admin interface panel will oversee every activity and issue on the platform. The admin panel will include tools to support
- Product Management
- Publisher Management
- Profile Management
- Banner Management
- Order Management
Feature Cost Management of products, categories, profiles, orders, and more. $3800
Help and Support
In case of any issue or drawback faced by any user on the platform, requests will be forwarded to the admin panel dashboard. The support and help requests will then be managed by the authorized user.
Feature Cost Support panel $500
Process of Developing a Marketplace
Knowing Your Technical Goals
Having a clear understanding of your requirements is the first step to building an incredible marketplace. Clearly communicate the requirements to your development partner and specify your expectations.
Designing the Marketplace
Designing takes up to 15 to 20% of the development time, depending on the complexity and functionality of the platform. The versatility and flexibility of the plays a vital role in the success of the platform. The design of the app is the single most crucial element of the app. Without a well-designed interface, there is no chance of attracting customers.
If you want to get a wireframe of the app before investing in the design, the estimate of the wireframe alone can cost you up to $5000.
Before the whole development process begins, setting an environment is essential. The developer needs to create a system that includes all the necessary APIs. In this stage, your ideas would come to life. This is where coding, designing, and quality assurance come together.
We, at Cubix, believe communication is essential in making anything work. Every piece of code, every design element, every functionality is communicated throughout the development process by our project manager. Apart from strictly sticking to deadlines, we make sure that every app we develop is thoroughly tested by our QA specialists to avoid bugs and issues in the future.
Deployment and Testing
Testing the app is necessary before the big launch, as it helps detect errors and mistakes.
Deploying the marketplace app to the app store will make it accessible to the public, and it’s the developer’s responsibility to fully optimize the platform for the app store’s search engine so it can gain attention and recognition from the audience.
Maintenance and Support
For people to keep using your platform, the app needs to be regularly updated with new libraries to support new operating systems and new versions.
After-sales services are a crucial part of your platform’s lifecycle as it includes maintenance and support of the app.
How to Choose the Right Development Company?
You certainly want to know all your options before choosing who to get in bed with. The team you hire will decide how your dream project ends up. Before hiring an agency, going through their portfolio, policies, experiences, and pricing are crucial.
Research, Research, Research
Learn about the agency’s projects and analyze its portfolio and expertise. Read testimonials and reviews so you can assess the agency’s abilities. Make sure you have communicated the project requirements effectively before deciding. After all, signing a contract means beginning a relationship, and you don’t want to be caught off guard in case of any drawback in the future.
Explore Your Budget and Set a Timeline
Developing a marketplace requires a lot of effort, money, and time. Make sure you hire an agency that can deliver high-quality results and reach your expectations within your budget.
Setting a realistic timeline is essential, so the development agency knows when to produce results.
Read the Contract
Make sure you read every point stated in the agreement. Go through the contract and discuss every legal obligation before finalizing the deal.
Ready to Develop a Marketplace?
In today’s digital times, we see online marketplaces taking over retail stores. Now is the best time to set up your marketplace and build a community of service providers and potential customers.
Our team is excited to hear your business idea. Schedule a meeting with us today!