Illia PinchukCEO
How to create peer to peer marketplace
Air drone delivery has proved that shopping nowadays has many new solutions for buyers. Online shopping marketplaces have evolved and gained innovative approaches. For instance, Facebook uses more than 11,000 chatbots.
Nowadays, peer-to-peer marketplaces are becoming very popular. PwC predicts that this market will be worth $355 billion by 2025.
The process of creating a marketplace is difficult and demands a lot of effort. The topic is so wide that the information will be enough to write a book. That is why we’ll only give you the key tips to launch your platform.
Need to create an e-commerce website? Here’s how we can help you.
What is a peer to peer marketplace?
Nowadays, online cooperation is more popular than ever. Teachers, articles, workshops teach you to share knowledge with your peers, and preferably online. It doesn’t eliminate the value of people around us because sometimes we forget about their importance in our life. The main thing is that online platform allows capturing the audience without geographical boundaries.
Fiverr, Airbnb and Etsy showed that peer-to-peer marketplace suits every business area. The peer-to-peer marketplace is an e-commerce model that allows buyers and sellers to switch their positions. There is no strong line between the roles, and the key goal is gathering ground for both sides to exchange goods.
Let’s consider an example, Bump, a peer to peer marketplace for streetwear. After 6 months after the launch, the startup gained 200 000 users. The idea is to sell and buy unique streetwear brands.
Back-and-forth negotiation is welcome there, so feel free to discuss the price. Also, Bump doesn’t invest in physically accessing the goods. Quality checking relies on crowdsourcing and moderators. Each user may say that this product is fake in order to exclude it from the website.
Another example is Paxful, a peer-to-peer marketplace where sellers and buyers place offers. It is similar to eBay but more focused on Bitcoin. It works as an international payment logistics website with a significant support system. Traders have received an open ranking based on their activity and have a trading history as well.
Popular marketplaces like Amazon and Alibaba are dominating marketplaces, but gig economy growth keeps increasing. Last year, 34% of US employees were engaged in the gig economy.
How to build a peer to peer website
1. Find your niche
In the book Zero to one: notes on startups, or how to build the future, Peter Thiel, the founder of PayPal, teaches to become a unicorn. It means finding a niche with low competitiveness and high value for the users. This is one of the most important things for the peer to peer commerce. You need to find the needs of your specific audience and cover them. Because if your services appeal to everyone, finally, services may engage nobody.
The best choice is to base your future business on an area that is related to your experience. It will make you able to sell the services people can’t reject and create products that are nice to have.
2. Be custom-oriented
It is useful to develop products with clients in mind. Think deeply about when and how your potential audience may use these services or products, what they will expect, and most importantly, how to improve their experience. For example, research showed that many people use their cell phones over desktop computers for buying. That’s why many web developers created call-to-action buttons on apps that are comfortable to use with the thumb. Also, key elements are saved, and additional functions are hidden to improve user experience as well.
A great example of peer to peer commerce is Etsy, a global marketplace with a whole community of members that are engaged to join events and teams and make use of workshops.
3. Find a partner.
Collaborating with the giants can bring you success. Learn from their knowledge and experience, and make this partnership your must-have for the initial stage. This cooperation will help you to fulfill gaps and solve problems.
4. Be yourself
If this is your first business, you will fail from time to time and have challenging moments. Most people that have no idea how to build a business will advise you to give up. But successful entrepreneurs in the book Stay hungry, stay foolish teach us to listen to their hearts and believe in our ideas. Sometimes, your idea may sound crazy to others, but it doesn’t mean that it is impossible. Driverless cars might be perceived as a dream, but nowadays, it is real. So, follow your way and do things in what you believe.
5. Work on technical issues
You may create a peer-to-peer market from scratch or develop it with a marketplace software open source, such as Magento or Sharetribe . Also, you may use a SaaS solution involving Marketplacer or Near Me.
The business development manager at DICEUS adds that there are 3 important issues before launching your marketplace:
- Tech support team to ensure the required security
- Quality products or high-skilled service providers
- A path to monetization to generate revenue
Scratch vs. Open-source software vs. SaaS marketplace platform
Let’s dive deeper to know what it takes and how to build a peer to peer website.
SaaS Marketplace Platform
SaaS-based marketplaces mean that these companies deliver products that the client applies to run its business and some additional marketplace features that help them unite and transact with third parties.
It has various benefits, including simplified hosting, automatic updates, greater accessibility, and relevant customization. Because of saving the data in the cloud, you don’t need to pay for the hosting. Moreover, SaaS allows users to choose desirable features and pay-per-use options. It is a scalable solution to the project specification and clients’ expectations.
There are two types of SaaS-based marketplaces:
For example, Zenefits, an HR tool that may be used without the “marketplace features”. Zenefits brings free advantages to businesses and creates revenue from commissions when companies or employees purchase insurance plans through the website.
Zenefits offered a solution to these problems. By delivering their software as a service, they freed companies from investing in products that would almost certainly be outdated by the end of the year. Delivering the software online meant that updates could be pushed immediately, regulatory changes could be adopted immediately, and staff training was reduced as changes rolled out incrementally instead of in large annual updates.
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Scratch
Creating a marketplace from scratch is time-consuming and expensive. The reason why people are still willing to use this method is the uniqueness of the ready product. You may develop a marketplace with an entirely original user experience and user interface and apply the specific business logic your project requires. For example, Pindify, is a custom-built peer-to-peer marketplace. It doesn’t have an Amazon-like interface.
Scratch helps to build the app architecture to match your goals the best. It is a flexible tool to align the future product to your expectations. With a ready platform, it’s quite challenging to rewrite some website elements.
Moreover, scratch allows choosing the technology stack for your project. And if your marketplace will capture a big audience and rapidly grow, you’ll adapt the code to the changes to reach the needed performance.
Remember that to develop a marketplace from scratch, you need to have a strong minimum viable product (MVP). Then, you need to test your idea and whether your MVP is good enough to capture the attention of your audience.
Marketplace software open source
If you wonder how to create a marketplace app, simpler, ready-free platforms will be a good choice for your project. Feel free to choose any e-commerce platform: Drupal , Magento , Sharetribe , Spree Commerce , OpenCart , etc. They’re more suitable for online stores, so you may consider paid platforms. Except for the fact that Drupal is free, to use it for marketplace creation, you need to apply paid extension, Drupal Commerce.
In order to use the free template Magento, for example, you need to install a Magento extension to gain marketplace features. Nowadays, Magento is a famous CMS with marketplace extensions, such as Multi-Vendor Module, Magento Marketplace, uMarketplace Suite.
If taking into account Sharetribe, it’s simpler than other platforms because it was created for marketplace development. Besides, it has all the required features for free that allow broadening your development, for example, creating a significant user interface. The key features are personal storefronts, product listings, and PayPal support. But you need a team of programmers in order to create additional payment gateways. Moreover, the team needs to be ready to work with Ruby and Ruby on Rails because Sharetribe is based on it.
Blockchain marketplace
The blockchain marketplace has a decentralized structure without a mediator. It brings distributed databases without the need for permanent support for security. So you can achieve your goals while saving costs.
Moreover, blockchain technology brings transparency thanks to a huge amount of users that monitor and check the data. And the most important thing is quicker transactions that are made within the network.
Blockchain platform doesn’t demand any personal information. The blockchain brings a business model with new payment opportunities, user interactions, and agreements.
For instance, Soma is a Blockchain-based website that develops an online community of sellers and buyers through a P2P network. By building cards that present the products or services, the website has developed a marketplace with transparent feedback and history. Moreover, an innovative rewards system boosts cooperation. It has AI-based integrated logistics for quick delivery. The platform involves traditional social media interactivity for user engagement.
Learn more about our marketplace development services.
Advantages of creating peer to peer market
- Networking. Word-of-mouth is the best way to share information about your products and engage new customers. The best thing is that this is an entirely free marketing tool when your visitors will provide the task of promoting your service.
- Ability to broaden your audience. Online trading is not limited by your location. Your goal is to create just a platform for meaningful interaction between the buyer and the seller. The system will work without additional efforts that make P2P very attractive.
- Financial advantage. So, buyers and sellers will come to your website to fulfill their needs, and you will get revenue with minimal effort. If comparing launching an e-commerce site with a peer-to-peer website, the second one is a winning proposition for business owners with a limited budget.
- Easiness. Peer-to-peer website has a huge simplicity. Consider the ability to outsource needed services and development in order to use their expertise and decrease time to market.
- One place for various solutions. The client will have all the services or products under one roof, which helps to generate revenue faster.
- Opportunities for branding. Various sellers help to strengthen your branding of the marketplace and make it popular.
- Improved marketing. You may offer relevant discounts connected to the holidays and other occasions in order to boost sales.
- Geographical freedom. The number of potential clients is not limited by your physical location. Users can access services or products from anywhere.
So, now you know how to build an online marketplace. Build your idea around potential clients’ demands and assess all pros and cons. Your startup may bring you huge success or failure, and everything depends on your skills to bring people winning solutions to their struggles and business approach.
Scratch, open-source software, or SaaS marketplace platform are possible ways to create needed marketplaces. For projects with limited budgets, open-source software is the best choice. Unique ideas with a requirement to deliver specific customer experience demand development from scratch. The SaaS marketplace platform delivers a number of features for your business needs.
