Want to know how much you need to invest to start a marketplace business? Today, you learn all about the cost of creating a marketplace.
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What is the cost of creating an online marketplace?
Creating a marketplace business starts with building the marketplace platform. And today, you’ll learn what it costs to create an online marketplace.
Want to learn more? Read on!
Can you create an online marketplace?
Marketplaces are more popular than ever. Companies like Amazon, Airbnb, Etsy, and eBay are just a few examples of successful marketplaces that have shown us how powerful marketplace businesses can be.
According to Statista, 47% of worldwide digital purchases in 2019 happened via online marketplace platforms. And consider how 53% of US adults start their search on Amazon when they’re planning on making a digital purchase. That’s how significant marketplaces are today.
But how do you build a marketplace platform?
The thing is:
A decade ago, building a marketplace was far more difficult than it is today. You had to either be a developer yourself or hire a team of developers to build your website or app. Obviously, that meant a big upfront investment. Either you, as a marketplace entrepreneur, had to invest your own money or get an initial round of startup funding.
Today, building a marketplace platform is much more accessible. Just like Shopify changed the rules for building single-merchant e-commerce businesses, marketplace software has changed the way we build marketplaces. Thanks to this software, you can, these days, set up a marketplace platform fast and without all the development costs (which leaves more money for growing your platform).
In other words, it’s more possible than ever for most of us to create marketplace platforms. How much do the different alternatives cost, though?
How much does it cost to create an online platform?
You have two options when you’re creating an online marketplace platform. You can either create it from scratch or use a marketplace website builder.
Here are your alternatives.
Build a platform from scratch
Your first option is to build a marketplace platform from scratch. The cost can be quite steep, especially when you take into consideration that you likely need to test your Minimum Viable Platform (MVP) first and make adjustments.
A basic website can cost anywhere from $20,000-$150,000, depending on the complexity and where you develop it.
As a marketplace website can take around 1044 hours to develop, the cost structure in different countries would look something like this (based on these hourly rates).
Ukraine (avg. $31.5/h)
Germany (avg. $60/h)
USA (avg. $100/h)
That said though, you need more than just a website developer if you want a well-functioning marketplace, including UX designers, project managers, and so on.
And remember to take into account the costs required to run your platform on an ongoing basis, such as hosting, security, and software.
A self-developed marketplace does have an advantage, though: you can design a unique marketplace that looks and works exactly like you want it to work. And you have full control of it.
That said, there’s a good option for most businesses: marketplace website software.
Use a marketplace website builder
A marketplace builder is a software tool that lets you use ready-made templates and features to build your platform. Typically, you can use drag-and-drop tools to create your marketplace.
For instance, our own tool, Kreezalid, is a marketplace website builder.
In your dashboard, you can choose a design (with beautiful website templates), add and remove features (such as listings, payment options, and more), and update your website right away.
Because it’s a no-code tool, you don’t need a developer to help you; you can do it all by yourself, even if you have no technical skills.
Some of the features Kreezalid offers are:
- User accounts
- Vendors and buyers profiles
- Listings and listing features
- Payment tools
- Different order types
- Email templates
The cost of creating an online marketplace with Kreezalid is $299/month or $3,228 billed annually. That’s compared to $30,000 to $150,000 for a from-the-ground-up website.
That said, if you’re a bigger organization or have specific needs for your platform, you might need customization services. We offer them, too. As the price is case-specific, the cost depends on your project. However, the price is significantly lower than a website built from scratch, partly because we already have the foundations in place.
If you’re thinking of using a marketplace website builder, these resources can be useful for you:
- Choose a marketplace website template/theme
- Design a marketplace website
- Choose a marketplace payment solution
How long does it take to build an online marketplace?
Now you know the cost of creating an online marketplace.
But how long it takes to develop an online marketplace depends on a few things.
First, are you developing it from scratch or using a marketplace website builder?
If you’re building it from the ground up, then the development can easily take several months. Even a simple marketplace website will take a few months to develop.
But if you’re using a marketplace website builder, the time to build your marketplace declines dramatically. With website builders such as Kreezalid, you set up your website in less than an hour.
Plus, updates take significantly less time, too. A marketplace builder lets you update your marketplace (add or remove features, change the design, change the copy, and so forth) right away.
A website that is developed from scratch requires more time. You might be looking at ongoing project management to incorporate your change requests.
So, it’s safe to say that a marketplace website builder is likely the best option for most marketplaces, both because of the cost aspect and because it’s a more effective solution.
How to create a successful marketplace
Building your marketplace website is Step One. But how do you ensure that your marketplace is successful?
Here are our best resources to help you get started:
- Come up with a marketplace idea (This guide shows you how to find your idea, if you’re looking for one)
- Create a marketplace strategy (When you start growing your marketplace, you need a launch strategy -- and that’s what you get here)
- Market your marketplace (Use this guide to create your own marketing strategy to promote your marketplace)
- Grow your marketplace (Once your marketplace is up-and-running, how do you grow it? Learn all about it here)
If you want more strategies and tips, take a look at our blog.
Over to you!
There you have it! Now you know what the cost of creating an online marketplace is.
Building a marketplace will require its own investments. But you can choose between costly and inflexible solutions (development from scratch) and cost-effective alternatives, such as marketplace software.
Want to get started right away?