How to Build Online Marketplace MVP and Not Fail

Creating a MVP allows you to save costs and time. In the meantime, it provides valuable feedback on the product and its primary features. Using this approach, you will definitely understand whether your idea is worth investing in or not.

Minimum viable product development can be a straightforward task with the right approach. It involves several steps, such as product discovery, UI/UX design, development, testing, and launch.

At Codica, we professionally develop MVP solutions for clients in various niches and with different functionality. We have solid experience handling everything software development-related from small startups to enterprise-level businesses.

Hence, in this article, we will discuss how to build a marketplace MVP through several simple steps. We will reveal interesting insights and points you should always have a keen eye on, along with actual steps to take when building an MVP for your marketplace.

Benefits of building an online marketplace MVP

An MVP is a version of your custom marketplace that contains only the most basic features. Once the MVP marketplace is created, you will be able to understand what should be modified/removed/added on the website. It can be done with the help of useful feedback from your early adopters.

This approach allows you to rapidly and viably build a marketplace MVP that can further be scaled and corrected.

Here’s how the MVP approach works in product development:

Basically, the minimum viable product is way more beneficial than you think. It has a vast range of advantages that will help you stabilize your marketplace and ensure stable growth. Such advantages are as follows:

• Market validation. Launching an MVP enables you to validate your marketplace idea and assess its market potential. By releasing a simplified version, you can gather user feedback, gauge engagement, and determine if your target audience sees value in your offering.
• Cost efficiency. Building an MVP is cost-effective compared to a full-featured marketplace. By prioritizing core features, you save on development costs and avoid investing in non-essential or undesired features.
• Time-to-market. An MVP launch speeds up your marketplace's entry into the market. By focusing on essential features, you shorten development time and quickly attract users. This early market entry helps establish a competitive advantage and provides valuable insights from user interactions.
• Risks mitigation. An MVP reduces risks in developing a full-fledged marketplace. By releasing a scaled-down version, you can test market demand and idea viability without significant upfront investment. This iterative approach enables you to identify and address challenges early on and make necessary pivots if required.

Core parts of an online marketplace MVP

As we said before, when you want to build a marketplace MVP, its functionality should be valuable to the potential users. However, to ensure success, the marketplace has to be a viable platform for vendors as well. It means you must build features that will cover most of both platform sides’ needs. It includes providing the best user experience, easy navigation, and others.

Now, let’s take a look at the main features of your online marketplace MVP.

Home page

Being an initial page of your marketplace, an MVP version of the home page should include various objects. Normally, it has to have a dedicated logo space, search bar, featured categories and products, testimonials, call-to-action buttons, and footer links to important pages.

It should provide a clear yet comprehensive introduction to the platform and guide users toward the main features and categories of the marketplace. Moreover, the home page must have a dedicated space for banners. They usually display current special offers or discounts to catch newcomers’ attention.

Account page of buyers and vendors

This function is more important for suppliers than buyers. The matter is that the information about an online store or vendor should be clearly presented and easily manageable by the seller.

The buyer needs to know the general store information like the functionality marketplace provides, fees it charges, and privacy policy, for instance. The neat presence of these little aspects can help both vendors and buyers to see shop offers at a glance. It increases the user experience as it takes a little time to get the required data.

Product page

This feature allows buyers to know details about the goods listed by sellers. It includes description, item information, technical specification, customer reviews, and warranty. Product pages are the most viewed and visited throughout the website. The reason is that buyers conclude whether to buy an item at this stage.

Registration page

A registration page for a marketplace MVP should be as clear as possible. It is the primary gateway that will ensure users attend the platform. It should always include a form for users to input basic and more detailed information. Besides it should also have a clear button or checkbox for agreeing to terms and conditions and read them if needed.

Ideally, a proper registration page has to have enough space to add several buttons which allow users to create not only an account but also signup with their social media profile, Google or Apple ID.

Lastly, it should clearly handle and display error messages like an invalid email address, a too-simple password, or any similar issues.

Search option

Search is extremely important for a marketplace MVP, as it enables buyers to find the required item rapidly and smoothly just by entering a keyword in the field. Suppliers can use the search option to navigate through the website and find information on competitive goods. This way, they conduct a market and competitor analysis.

Messaging

The feature allows both sides to get in contact and discuss a product or service. Besides, they can communicate on any issues connected with the cost, payment methods, delivery, etc.

There are numerous ways to implement messaging functionality. For example, you can choose to integrate messengers, many of which are available for free. You can also integrate real-time calls or even add a chat embedded into the platform that appears with a pop-up.

Payment processing

It is vitally important for users to both choose the desired item and pay for it expeditiously. With the idea of implementing effortless payment, you can come up with various ideas. For example, it became extremely popular to implement Apple and Google Pay. Besides, it is always a perfect idea to provide your customers with multiple payment methods, e.g. PayPal, Stripe, and Square.

Reviews and ratings

Make your marketplace MVP reliable. With reviews and ratings, you can make buyers feel confident and give them a sense of trust when buying goods. This way, they will more likely place an order.

Notifications

This feature enhances the user experience for visitors and boosts traffic. They inform users about new messages, order requests, special deals, etc. It means that users always stay engaged with your brand.

Administration panel

It gives you (as an admin) an opportunity to monitor and manage all the seller-buyer interactions. It includes editing info about the platform users, items, and payments. Using this feature, you can take into account the users’ feedback and locally improve the marketplace workflow

Related reading: How to Build a Multi-Vendor Marketplace Platform

Steps to build an online marketplace MVP

There are several options you can take into consideration:

• Team of freelancers;
• In-house custom software developers;
• Software consultancy specializing in custom software development services.

Each option is viable and deserves your attention. They may differ in rates, delivery time, and quality of the solution you will get in the end. Besides, you must also consider potential management challenges and allocate resources for recruitment processes.

We recommend you pick a software company that offers high-quality online marketplace development services and can especially build a marketplace MVP for you.

The matter is that such a company already has solid experience in developing and launching marketplace websites. They will not only meet your requirements but can also advise you on the UX and the functionality you need or not. Such an agency knows how to build a marketplace MVP and make it successful.

Product discovery

Being the initial phase of the whole marketplace development process, product discovery plays an enormous role in this matter. It has several major benefits.

Performing product discovery, you can see the whole picture of your future marketplace. For instance, at Codica, we:

• Analyze the market and the potential competition to help you stand out.
• Provide detailed budget documentation, including prices per each feature and time estimates.
• Form a thorough project documentation including numerous aspects.
• Conduct user experience (UX) research and create working prototypes for your future marketplace.

Overall, the product discovery we conduct is a highly beneficial approach to your future marketplace to make sure it will be successful upon release.

Choose a business model

Selecting a business model for your marketplace to operate on is a crucial task. It depends on several factors, such as the type of products or services being offered, the target market, and the revenue goals of the platform.

Normally, there are several major ecommerce business models marketplaces stick to. For example, the most popular are:

• B2C – business-to-customer model focuses on delivering goods to single users.
• C2C – consumer-to-consumer model allows marketplaces to engage in cooperation between individuals providing them with the platform.
• B2B – business-to-business model allows marketplaces to target enterprise-level customers and sell goods in bulk instead of targeting individuals.
• P2P – peer-to-peer model is the most popular choice for marketplaces that connect people who offer services or own products with those willing to pay for them.

Knowing the types of business models is one side of the coin. Another lies in figuring out which one is the most suitable for your future marketplace. Here’s a list of steps that may ease your choice.

• Identify the marketplace's value proposition. Determine what unique benefit the marketplace provides to its users.
• Evaluate your target market and audience. Understand the needs and preferences of the marketplace's target market. This can help determine the pricing and revenue models that will be most effective.
• Explore different revenue models. There are several revenue models that can be used for a marketplace MVP, such as transaction fees, subscription fees, advertising, or a combination of these. Each model has its own advantages and disadvantages, and it is important to consider which will work best for the marketplace.
• Monitor and adjust the business model you chose. Once the marketplace MVP is launched, it is important to continuously monitor the business model and adjust it as necessary based on feedback from users and the performance of the platform.

Defining the main features of your product

The minimum viable product of your marketplace should include all possible features you’d like to see in the final product. To prioritize features, you can follow a rule that many companies adhere to. Choose features that deliver the most value to users while requiring the least amount of effort to build.

Simply put, you will need to gradually move from the core features of your marketplace to the ones which can be considered helpers. The latter are usually planned the last because they bring improvements, but the marketplace can operate without them.

Looking for a way to add profitable features to your marketplace?

We can help.

Let’s discuss

Technologies to use

Once you have chosen the list of the required features for your website, you can proceed to the technical implementation of your ideas. You surely want to build a scalable, maintainable, and sustainable marketplace MVP.

At Codica, we prepare a list of the best suitable technologies before starting a new project. It is crucial as different tools have their specific benefits. It means that we can combine them to build the best possible solution within particular requirements.

Below you can see the list of programming languages, libraries, frameworks, and other tools we use in practice for custom marketplace development.

Server-side tech stack

Backend or server-side technologies are tools that allow interaction with servers. This way, we can get or update the existing data. It is then used in the app’s view layer to give users relevant information depending on their actions.

So, we work with Ruby, Ruby on Rails, ElasticSearch, Redis, i18n gem, MySQL, and Sidekiq for handling server-side operations.

Client-side tech stack

Frontend or client-side tools allow displaying of webpage elements to users. For example, we can get some data from servers using backend tools. Then we utilize frontend technologies to display this data properly.

Considering the client-side tools, we use HTML5, CSS3, JS, Ruby on Rails, React, and Vue.js in practice.

Tools

Integrations and tools simplify development, communication, DevOps, and other processes. Also, some of them allow adding extra functionality to your marketplace MVP.

At Codica, we prefer the following tools: AWS S3, GitLab, GitHub, Slack, Digital Ocean.

To conclude, the right choice of technology stack influences your product scalability, sustainability, and maintainability. We believe that the tools mentioned above will help you build a web solution of any scale and complexity, For sure, you can choose other technologies to meet your goals.

UX/UI design

The design of the minimum viable product of your marketplace has to show all functionality it has to have clearly. UI/UX design services greatly impact your MVP and its further success. This impact and its help can be outlined in several ways.

• It helps to create a user-centered design. The UI/UX design process involves understanding the needs and preferences of the target audience and designing the marketplace interface in a way that meets those needs. This ensures that the marketplace MVP is intuitive and user-friendly.
• It enhances the user experience. UI/UX design is focused on creating a seamless and enjoyable user experience. By designing the marketplace MVP with a clear and consistent visual language, users can easily navigate the platform and complete transactions without frustration.
• Supporting scalability. UI/UX design can also support the scalability of the marketplace MVP. By designing the platform with a modular architecture and consistent design patterns, it is easier to add new features and functionality as the marketplace grows.

At Codica, we are experts in delivering designs and adapting them to the platform, client, and niche-specific demands. Let’s take PlanMyKids as an example.

This online service marketplace allows people to browse through available activities and book them for their kids. Moreover, its user-friendly design and user experience make the project seamless and understandable at a glance.

The marketplace is packed with convenient features. For instance, PlanMyKids has an advanced booking system, adaptable web forms, and a calendar. In fact, all these features would be way more difficult to implement without testing them with MVP web development.

As a result, we managed to deliver a fast, robust, and highly performant marketplace. Here’s an overview of how it works.

Development of the online marketplace MVP

At this point, your marketplace's minimum viable product is being built. It’s a vast step, with numerous steps for developers to take. Normally, the development process can be divided in several parts, each managed simultaneously by a variety of specialists.

Frontend development is a part of the development process that involves coding the user interface design using web development technologies we picked earlier on during the product discovery. This step ensures that the marketplace MVP has a consistent and responsive design that is optimized for different devices and screen sizes. Moreover, frontend development also includes building logic, data processing, cookies, and everything in between. Simply put, frontend development is all about building everything except for the server side.

The backend development, on the other hand, involves coding the server-side logic of the marketplace MVP. This includes developing the database architecture, creating APIs, and integrating third-party services such as payment processing and messaging.

Lastly, security is another critical consideration in the development of a marketplace MVP. Developers need to implement security measures to protect user data and ensure that the platform is secure against hacking attempts and other threats.

Testing

It is a critical part of developing a marketplace MVP to ensure it is functional, user-friendly, and meets the needs of the target audience. The QA testing services can be quite vast, involving absolutely different methods to ensure all functional parts work as intended.

Different types of testing include unit testing, integration testing, functional testing, performance testing, and user acceptance testing. Note that this process should be ongoing throughout the development phase to continuously refine and optimize the marketplace MVP.

Further reading: MVP Testing: Techniques, Strategies, and Plan

Customers feedback

Collecting user reviews and feedback can greatly boost your marketplace. Besides, enough feedback about your MVP can reveal ways for potential growth and development. Here are several ways how customer feedback can be beneficial for your MVP.

• Prioritize features. Customer feedback can also help you prioritize features and functionalities that are most important to your target audience. This can help you focus on building the features that will have the biggest impact on user engagement and satisfaction.
• Validate assumptions. Gathering feedback can help you validate assumptions about your target audience and ensure that you are building a platform that meets their needs and expectations. This can help you avoid building features that your target audience doesn't want or need.
• Identify pain points. By gathering feedback from customers, you can identify pain points and areas of the platform that need improvement. For example, if customers are having trouble finding goods, you can focus on improving the search system and user experience.

Support & maintenance

After the MVP has been released, there’s always room for maintenance and ongoing support. Accordingly, there are several ways you can improve your MVP once it’s published. In this matter, technical support is important. It implies providing users with assistance once they are stuck, answering questions, and addressing any concerns they may have.

Hotfixes and bug fixes are other important aspects. As with any software platform, bugs and other issues can arise over time. It's important to have a process in place for identifying and fixing these issues quickly to minimize disruption to users.

It is also vital to regularly update your platform. A marketplace should continue to evolve and improve over time to meet the changing needs of its users. This can include adding new features and functionalities, as well as making enhancements to existing ones.

Further marketplace MVP development

Once building a marketplace MVP is over, you will get feedback from your website users. It stands mainly for the features that should be improved or added. You need to put your visitors’ demands first and enhance the platform.

Here comes the Build-Measure-Learn (BML) technique of Lean Startup methodology. Using this approach, you make the online marketplace development process efficient. So, you build the product, analyze it, collect feedback, and then decide what should be added/deleted/modified. This is a cyclic process that results in constant improvement.

Below you can find examples of additional marketplace features that can be implemented after the main functionality is built.

Mobile app

Apart from making the solution compatible with mobile browsers, which is a must in today’s world, you must consider extending your business with a real mobile application. Why?

Because the number of mobile users is growing rapidly and is expected to reach 7.5 billion users worldwide. For this reason, build a user-friendly mobile marketplace to cover more potential visitors, which can greatly increase website conversions.

Luckily, it’s quite a beaten path where you can freely choose between a particular platform or making the app work on all of them. Additionally, there are numerous tools you can use to build the app from scratch. However, mobile app development services are a whole new world that you have to consider separately.

Read also: Native vs Cross-Platform App Development: The Right Way for Your Business

Comparison of goods and services

The ability to compare products with each other will be highly useful for the buyers. This feature on your marketplace platform will boost visitors’ user experience. They can avoid opening separate l product pages to compare goods. Here’s how it looks at Amazon.

It is simple to implement, yet it saves a lot of time for users. This feature is practically a must in most modern marketplaces.

Social network sharing

This feature massively promotes your marketplace business within the users’ social networks. Social network sharing is important for a marketplace MVP because it increases visibility, enables viral growth, encourages user-generated content, facilitates referral programs, and provides valuable feedback and insights from users. It helps create awareness, drive user acquisition, foster engagement, and gather feedback.

Wish list

It gives users an opportunity to have all the products they want in one location. Thus, you can send them notifications with discounts on the products from the wishlist and further help them make an easy purchase.

Localization

An adaptation for customers from all over the world. Usually, this includes choosing the country, language, currency, etc.

Cost of development of a marketplace MVP

The final cost depends on several factors, including the complexity of the platform, technology stack, team size and expertise, third-party integrations, design and user experience, and testing and quality assurance.

These factors can vary widely and impact the overall cost of the project. It's important to carefully consider each of these factors when estimating the cost of building a marketplace MVP. At Codica, though, we can provide pretty accurate costs, conveniently describing them in a table. Let’s take a look.

Main principles to follow when building a marketplace MVP

To create a successful marketplace MVP, it's important to follow key principles throughout the whole development process. This section outlines three main principles we adhere to at the Codica team.

Narrow focus

Aim both your financial and mental efforts at covering the smaller groups of the audience in the early days. This will narrow your focus and thus make the most of your budget. Once you get a positive response, you can focus on larger target groups.

Users in mind

In order to positively impress your customers, you need to fix their pain points through your custom marketplace. How will your product make their lives better? Why do they need your product, and what can it offer them? When you come to building your marketplace MVP, keep in mind these questions and always try to answer them.

A slow but promising start

Success always takes time. You need to implement all the primary and additional features, target both customers and vendors and promote the platform. Obviously, it cannot befall overnight. However, if you spend much time and defined goals are not reached, then reconsider your business model.

Examples of marketplace MVPs

To provide more understanding and supplement the theory we discussed, let’s take a brief look at the examples of MVPs. Even worldwide known brands started with a minimum viable product. Hence, we hope these examples will bring even more confidence in favor of creating MVP for your marketplace.

Amazon

Nowadays, it is pretty hard to find a person who does not know about such a multi-vendor marketplace development juggernaut as Amazon. However, few do know that in 1994 the company began selling low-cost books with the simplest design. However, they had to create an MVP to see where to grow and how to extend the platform. Here’s how it looked like.

It was an extremely successful MVP as the books are easy-to-sell and easy-to-ship goods that do not require any customer expenses. Step by step, the marketplace started expanding the product categories. This way, they boosted the conversion rate and became the largest ecommerce marketplace platform.

Related reading: How to Build a Marketplace Website Like Amazon

Airbnb

The website was initially started to gain some money for rent payments. However, it happened that the platform has become a major lodging rental marketplace competing with Booking.com.

The MVP version was the simplest website. It included the only accommodation option published by the platform creators. After a while, their idea was successfully validated. People found an interest in staying in someone’s home instead of picking a hotel with a complex sign-up procedure.

Further reading: How to Start Online Marketplace like Airbnb

Zappos

US-based footwear marketplace Zappos couldn’t become that popular without the MVP. It provided enough time and space to build the platform and master it to perfection. Today, it generates nearly $1 billion annually thanks to the foundation laid with the minimum viable product development.

Benefits of partnership with Codica team

We always offer our customers to try MVP development services first. This way, they get initial feedback from users, present their app to stakeholders, and save custom marketplace software development costs. Also, with the help of an Agile approach, customers can make changes at any stage of the development process.

Solid expertise in building marketplace MVPs

Since 2015, the Codica team has helped numerous startups build successful and profitable Minimum Viable Products. Specifically, we have delivered 45+ solutions, 20+ of which are marketplaces. They have succeeded in e-commerce, finance, automotive, accommodation rental, travel, and insurance domains.

Strong programming experience and technical expertise

The Codica team includes 60+ technical experts. We use the most up-to-date programming tools. It allows us to build scalable, maintainable, and high-performance solutions for customers.

Our technical specialists combine their experience with the best practices to build a marketplace MVP product. This way, it meets clients’ business requirements and caters to end-users needs.

Speaking of the proficiency, multi-vendor vehicle online marketplace is another fitting example of our work. Building a big solution, both our client and us knew that MVP is essential in such project. Hence, we delivered it in short time frame and within budget. It helped our client to attract investment and make the platform thrive.

As a result, now it’s a full-scale marketplace allowing people to sell and buy wide range of vehicles. Apart from the MVP, it has a solid progressive web app, convenient UI/UX design both designed to attract not only desktop, but also mobile users.

Lastly, it has all features an edge-cutting marketplace must have. For example, advanced search system, communication, and even ad creation functionalities.

Project management approach

At Codica, we apply an agile methodology which is extremely helpful in custom software development. It helps us choose the best option for the early delivery of a product. Following the methodology, we break down our work process in sprints, allowing us to deliver small parts of the product gradually. In terms of building marketplace MVPs, we provide clients with factional iterations. They help customers see results during the first stages.

So, we deliver product functionality step by step, test early, and make our solutions work from the start. Additionally, we constantly meet with our clients, sharing updates or bottlenecks. This way, both our clients and us can figure out the direction to move and priorities.

Excellent communication and timely reporting

Good communication is the key to project success. It influences the understanding of the project, the accuracy of deadlines, and the final product quality. For these reasons, we have built an efficient and transparent communication process. It allows our clients to see results at each development stage and monitor their progress.

Usually, we use Slack, our time-tracking software Timebot, and Trello to communicate with our teams and customers. With the help of these tools, we have created a solid development process and provided clients with timely reports on the work done. This way, customers always stay up-to-date with the project's progress and get high-quality product delivery.

At the same time, we are flexible in terms of working tools and are more than willing to use any other tools that our clients prefer.

Final words

Marketplace web development is a tough hill to climb which takes a large amount of time and effort to succeed. The more efficient way is to know how to build a marketplace MVP version that validates and verifies your ideas in the early days. This way, you collect initial feedback from potential users and investors. As a result, you can generate a client base early and further improve the product.

At Codica, we have built multiple complex and unique marketplace MVPs, and we will gladly help to create yours. Check our ready works or contact us to discuss your project.