How to Build an Auction Website Like eBay

Ecommerce platforms offer a greatly simplified shopping experience. People can purchase any kind of goods or services in a matter of minutes. We believe you have definitely heard of eBay - one of the most popular marketplaces in the world. Building it, however, is a challenging task that involves many crucial steps, from initial market research to testing and maintenance.

Speaking of eBay and similar platforms, they give you an opportunity to supply and purchase any product you can imagine. Hundreds of categories attract lots of users interested in numerous categories. This way, the platform generates an enormous profit. Following its success, you may wonder how to create an online marketplace like eBay, and we have just the answer.

In this article, we will share steps on how to create a website like eBay, including all the required functionality it should have. Besides, we will cover the ups and downs of creating an auction website while shedding light on approximate costs.

An eBay overview

Let’s begin by the definition and figuring out what type of website is eBay. It is an online auction website that connects buyers and sellers within B2C and C2C sectors. It means that the marketplace provides entrepreneurs and sellers with an opportunity to place their goods and buyers to purchase them online.

The platform has two possible pricing models: fixed price and auction. The first one is widespread and works as on any online store. The second model - auction - means that sellers choose a starting price for their listed product and those buyers who are interested place bids. When the auction ends, vendors sell the product to the highest bidder.

eBay is one of the most well-known and profitable auction websites. According to Statista’s research, eBay has been not only profitable, but also maintained high revenue caps throughout the years.

As you can see, the revenue eBay generates, although it had fluctuations in the past, is quite stable in 2022-2023.

The history of eBay

The marketplace was created in 1995 by developer Pierre Omidyar as a hobby. It was initially called AuctionWeb. By the end of the first year, the website reached a level of 1000 lots per month.

Below, you can see the first AuctionWeb homepage, which was designed in 1995.

Monetization strategy

The revenue model allows you to charge customers for using the platform in various ways. Simply put, when building a website like eBay, you can earn money by implementing different fees.

Let’s now take a look at the monetization strategies used by eBay in detail.

• Fees for sellers.

  Each time the vendors sell some goods, they are charged a certain percentage of the deal value. This strategy serves as the main profit generator for eBay.

• Insertion fees.

  The option is pretty widespread among marketplaces like eBay: sellers are charged for providing their goods per classified or per category. In case a vendor lists goods in several categories, they pay for each one.

• Listing fees.

  Sellers need to pay $0.35 for an item in case they publish more than 50 products per month.

• PayPal fees.

  PayPal is the most frequently used payment method on eBay. Thousands of transactions are made daily. On the marketplace, vendors are charged 2.9% on the total deal value and $0.30 fee per transaction.

You may also like: 10 Best Marketplace Monetization Strategies to Succeed

Pros and cons of auction websites like eBay

When considering multi-vendor marketplace development like eBay, you need to know the strengths and weaknesses of similar platforms, with their respective ups and downs. This knowledge will help you stand out from other marketplace rivals and get customers interested, especially sellers. It’s them who evaluate your platform rules and guidelines and decide whether to join your platform or not.

So, let’s take a look at the advantages and disadvantages of websites like eBay for users.

Pros of eBay

Target a huge audience

The core benefit of selling on eBay is its high traffic. However, reaching the desired traffic is challenging without solving a chicken and egg problem. The problem arises because buyers won't use the marketplace if there aren't enough products or services available, and sellers won't join if there aren't enough buyers. Thus, regarding eBay-like platforms, following the strategy where buyers are sellers and vice versa can be highly beneficial to build up an audience.

This fact makes starting an online marketplace a beneficial solution for both sellers and platform owners. It works the following way: vendors can provide tons of products and target a huge audience of potential customers. When buyers start purchasing goods, sellers pay different commissions and fees to marketplace owners. This way, it becomes a beneficial mechanism for website vendors and entrepreneurs.

Get support as a new seller

To launch a store, a new seller can read the guidelines for starting a successful eBay business. In this regard, eBay offers different community features like discussion boards and question-and-answer (Q&A) forums. This way, they can get important knowledge from the vendors who have already succeeded in the marketplace.

Get loyal customers

If sellers are interested in growing their profit in the marketplace, they will want to offer a perfect buying experience for customers to get loyal clients. This can be reached by providing high-quality goods, fast delivery, and shipping, and giving repeat customers certain bonuses. Put simply, once a sale is made, sellers have good prospects of getting repeat buyers by providing excellent service or high product quality.

Thus, it’s a win-win strategy for both parties: sellers want to stand out from the crowd and provide high-quality products due to high competition that generates more profit for the marketplace.

Sell anything

One of the advantageous features of auction websites like eBay is the all-in-one approach: vendors can sell and buy everything. Regardless of the niche, sellers can definitely find any specific audience.

It is beneficial for both marketplace owners and users: buyers can find any product and purchase it, thus allowing the platform to get more transaction fees. This way, everybody wins.

Cons of eBay

Limited layout opportunities

The platform offers sellers to create a personal online store layout with the ability to manage the position of different elements. However, many restrictions still exist in manipulating the layout structure and elements’ positioning. This is explained by the fact that most websites, like eBay, are interested in promoting the products, not the sellers. For this reason, the website primarily determines and restricts the features in management.

Shipping speed affects store visibility

The platform rewards those sellers who can ship the item on the same day or the following one. If vendors face certain shipping challenges, their online store visibility will be decreased.

High competition

eBay has millions of users willing to sell their products, so vendors will face huge competition. To overcome this issue, they need to offer a unique product, cut prices, or avoid listing some categories. Anyway, sellers should find a strategy to stand out from the crowd.

To conclude, websites like eBay have both benefits and drawbacks. You need to consider all of them and find the optimal balance to satisfy all the platform parties.

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Steps in developing a marketplace like eBay

The more complex the product, the more challenging it is to develop. However, the difficulty level can be easily overcome with the right approach. At Codica, we know how to make a website like eBay, and it is by dividing the entire development process into sizeable milestones. Let’s take a closer peek at those.

Market research

If you are going to build a marketplace website like eBay, you need to think up-front and solve the core challenges that can appear in the future. It will help you save time and money in the future when the platform is built and functioning. Thus, in the majority of scenarios, the development starts with product discovery.

At Codica, product discovery service is a process we conduct that encompasses numerous aspects before the design and development start. In fact, it is somewhat similar to the business model canvas.

Similar to this lean startup template, product discovery can help you realize the business model in a structured way. It allows you to get together the information about the customers you serve, what value propositions are offered through what channels, and how you can generate profit.

Speaking of developing an eBay-like platform, our product discovery services can be helpful in many ways. Among all the activities, here are the most crucial to developing a marketplace like eBay.

Find your specific niche to overcome huge competition

The rivalry in the marketplace domain is pretty high. It may become rather complicated to succeed in developing an all-in-one platform with a wide range of products and services nowadays. The matter is that ecommerce juggernauts such as eBay, Amazon, Etsy, AliExpress, and others have already occupied many market segments and are trying to leave behind any competitors.

There is a more efficient way to start your business. Choose a specific niche initially to narrow your focus and stand out from the competitors in the market. For this reason, our product discovery is an excellent choice as we conduct all the research, making sure your product starts on solid ground.

Choose the optimal business model

After finding a niche, our team can analyze and suggest ways you will earn money from the marketplace. Depending on the type (vertical/horizontal), participants (C2C, B2C, C2B, B2B, and niche (goods, services, information, investment/fundraising), you can choose a particular monetization model.

Now, let’s take a look at the main revenue sources you need to take into account.

• Commission. The platform receives a percentage or a fixed sum when a buyer pays a seller.
• Membership fee. This revenue option is quite good when you provide high value to the customers. For example, you can offer customers a wider range of vendors to have more product options.
• Listing fee. This monetization tool allows you to charge sellers for each listing.
• Lead fee. It is a seller-oriented revenue model with the following flow: buyers place requests, and vendors pay a fee to bid on these consumers.
• Featured listings and ads. General listing is entirely free, but in case sellers want to get featured, you can offer different types of posting: the top ad of a category or post on the marketplace homepage, etc.

Come up with an idea for solving the chicken and egg problem

Who to acquire first: consumers or providers? Is it reasonable to target the sides one after another, or is it more beneficial to invite them simultaneously? There are multiple solutions to the chicken and egg problem, and all of them deserve your attention. Here are the most efficient tips.

• Acquire the hardest side first;
• Fix attention on a particular market;
• Stimulate the most essential platform party;
• Arrange astounding live action;
• Tie up a deal with an influencer;
• Take up a producer’s position;
• Set a time or demand constraint.

The functionality required

After finding out some essential data on the future product, we start planning the entire development process. Thus, one of the most important parts of this planning is encompassing the functionality required.

Authorization process

This feature is important to divide users into sellers and buyers. Vendors create online stores, list their items, and provide product descriptions and details. Consumers search for goods, read a product’s page, visit online stores, and contact suppliers to purchase items.

Also, authorization allows platform users to provide personal data (name, email address, password) for further purchases.

Inventory management

It boosts the sellers’ user experience. With inventory management functionality in place, vendors have an opportunity to manage their listings: publish, view, modify, and delete. Also, it allows suppliers to track their product shipping status.

Admin panel

Every online website requires an administrator who can handle any operation and solve any issue. An online marketplace with auctions is not an exception. Admin panel provides you with the ability to monitor the interaction between sellers and buyers, their transactions’ status, whether both sides comply with the cooperation rules, etc.

Product search

Provide users with multiple product and service categories on your platform. With this feature, consumers can easily navigate and search for particular items using different advanced filters. They specify product category, condition, price range, buying format, seller, shipping options, etc.

Product page

It allows consumers to see the item details, payment, shipping, and delivery information and get the seller’s contacts. At this stage, buyers conclude whether they want to buy a product.

Live auctions

One main feature that makes eBay stand out from the competitors is live auctions. It is a unique function that allows sellers to choose a starting price for their listed product, and those buyers who are interested place bids. When the auction ends, vendors sell the product to the highest bidder.

Shopping cart

It’s impossible to imagine a functional auction website without a shopping cart. It gives buyers an opportunity to pick several item options from different stores and purchase them in one stroke. Also, consumers can manage their in-cart items, changing the product quantity or removing it.

Chat

The integrated feature gives website users an opportunity to get in touch and discuss the transaction details.

Payment method

This feature allows consumers to buy an item and the seller to get the requested price. eBay customers can do it using different payment methods: credit/debit card, Stripe, and PayPal.

Reviews and ratings

The current option allows buyers to increase their trustworthiness with the platform and its sellers. Thus, the marketplace sellers are interested in providing excellent service and keeping their store ratings high.

Analytics

The tool gives suppliers an opportunity to monitor their business activity: the most-visited products, session duration, the number of views by date, total sales amount, etc.

Choose the technical stack

The last important aspect of the discovery is the technical stack the development team should use to create such a complex platform. It is pretty good to determine the exact functionality you want to have on your online website like eBay.

Let’s take a look at the main online marketplace development tools and technologies required for the implementation of platform features before building a website like eBay.

• Backend

  Backend is responsible for all the marketplace logic and operations handled on the server side: processing your filter criteria, uploading the items in the feed, providing you with the product’s page and its data, etc.

  We recommend using the most up-to-date and modern tools, as they allow you to make your product scalable, maintainable, and sustainable. To develop the server-side part, you can take into consideration Ruby, Ruby on Rails, ElasticSearch, Redis, i18n gem, MySQL, and Sidekiq.

• Frontend

  At Codica, we use the technologies that allow us to provide customers with a brilliant UI solution with both high performance and stability. We believe you should take a look at the following tech stack for frontend development: HTML5, CSS3, JS, React, Vue.js, Angular.

• Tools and integrations

  Apart from coding, you should create an efficient development process and pick a suitable hosting service. To achieve this, pay attention to the next tools: AWS S3, GitLab, and Digital Ocean.

UX and UI design importance

Website design is the first thing users see when visiting your platform. Thus, it is crucial to consider UI/UX design services when building a website like eBay. Clearly, UI/UX design as a whole is a huge niche with many moving parts. So, let’s narrow it down and see the most crucial design aspects that play a huge role in eBay-like marketplace development.

Navigation

In short, make it as simple as possible. In ecommerce website design, try to avoid multiple dropdowns and nested lists. The easier it is to find a “Buy Now” button, the more purchases are made. Users tend to evade complex logic and too many clicks. Build a comprehensive user journey to make clients happy while browsing your auction website.

Trust and security

Credibility is the key to success. Create trust-based relations with users, and you will have more chances to get loyal customers in the long run.

In the design realm, it means that you need to use only high-quality and real product images and full item descriptions. It greatly boosts the buyers’ purchase experience. Also, provide users with reliable payment options and a refund policy, as it increases your credibility.

User involvement

Provide visitors with clear benefits of your platform that make it unique and stand out from rivals. Also, users love staying up-to-date, and following modern marketplace trends can be of great help in this regard. For example, one of the tactics eBay uses is that it involves users by showing them popular daily deals and categories with quick access.

To conclude, to build a successful website like eBay, you should pay much attention to the UI/UX design services as marketplace design defines the first impression of users and further ease of use. Make the navigation intuitive and visible to users so they find it simple to visit a certain page.

Also, require high-quality photos and detailed product descriptions from sellers to build trust-based relationships with buyers. Finally, try to stand out from the crowd by making your platform unique, offering popular daily deals, and tailoring content to users’ preferences.

Looking to design a successful online marketplace?

Our team can do it.

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Development, testing, and maintenance

These three stages share similar practices across different projects, they are natural next steps after conducting product discovery and creating UI/UX design. So, let’s take a look at major considerations during these key stages, shedding light on the critical aspects that ensure a robust and sustainable marketplace platform.

Development

When it comes to developing an auction marketplace from scratch is a challenging task yet with preparatory steps, we know how to realize it. When the development starts, developers already have everything required to build a marketplace.

For instance, the technology stack and all functionality are predefined during the product discovery. Also, developers work in accordance with the documentation designers prepare by the end of the UI/UX design process.

Testing

Once the marketplace is built, software testing comes into play. QA, or quality assurance specialists, employ various types of testing, ensuring different parts of the platform work as intended. For instance, there are:

• Performance testing. Assesses how well the app performs under expected stress and loads, ensuring it supports the anticipated number of simultaneous users, manages memory usage, and maintains optimal response times.
• Compatibility testing. Checks the marketplace’s compatibility with various browsers, allowing you to choose the most popular ones for your customers.
• Security testing. Validates the secure storage of sensitive data and ensures the resilience of the product against common security attacks.
• Backup and recovery testing. Verifies the app's capability to revert to the previous version and recover data in the event of a fault.

Maintenance

Even after your marketplace gets released to the public, there’s always space for performance monitoring and updates. For instance, we monitor various parts of the platform. On the one hand, we conduct analytical monitoring to identify bottlenecks and find ways to increase sales. On the other hand, we also analyze the performance to see if everything works as intended.

Сost to build a website like eBay

Before you proceed to make a website like eBay, it’s important to understand what budget you will need.

To calculate the cost of an auction website, you need to consider numerous aspects, such as the functionality you want to have, the development process, testing, marketing expenses, and more. Another aspect that influences the cost of your platform is the hourly rate of your software development team.

In this regard, we used the list of functionality discussed earlier in this article. As for the hourly rate, we took $50/hour - the average for Eastern European development agencies.

So, if you want to know how much does it cost to make an auction website, the minimum price is $64,600. Of course, the cost will be higher if you decide to hire a development team from Western Europe or the United States. On the other hand, consider that the price may change dramatically, and only your software development partner will be able to provide a final estimate based on your particular requirements.

Read also: How Much Does It Cost to Build an Online Marketplace in 2024

Codica's expertise in marketplace development

Throughout the years, we have gained impressive amounts of experience in building complex online marketplaces like eBay. We focus on creating unique, fast-loading, secure, engaging, and user-friendly ecommerce websites that drive traffic, increase conversions, and push up sales. In online marketplace development services, our specialists thoroughly analyze the end user's needs to build an auction website that your customers will definitely love.

At Codica, we have experience building any ecommerce marketplace platform differing in functionality, complexity, and content. One such example is a multi-vendor marketplace platform, a very significant projects we were happy to work on.

Being built entirely from scratch, this marketplace comprises C2C and B2C segments, allowing it to cater to a much wider audience. Looking at it from the marketplace perspective, it has all the required functionality to operate, scale, and even analyze the performance successfully.

As marketplaces tend to grow huge, the platform we built is highly scalable and features various integrations to fulfill customer needs. For instance, UI/UX design, the importance of which we covered earlier on, plays a crucial role in this marketplace, making it user-friendly and not overwhelming.

Additionally, the integrations we populated the platform are also important. As such, we implemented an advanced search system so that users can always stay on track of their journey. Besides, we also implemented Google Maps, which is of great help for customers shopping locally.

Here’s a sneak peek demonstration of how the multi-vendor marketplace we built works in greater detail.

Bottom line

Success stories of auction websites like eBay attract many entrepreneurs to build a similar platform. It is fully reasonable as knowing how to build a website like eBay pays off with tons of users and a high conversion rate, thus generating much profit. However, marketplace development can be a tough hill to climb.

In this regard, having an experienced custom software development company is beneficial. The Codica team has built multiple marketplaces and auction websites, and we will gladly help you build an auction marketplace too. As always, you can refer to our blog page, where we regularly cover new aspects of software development. Additionally, get in touch with us if you are looking for a team to transform your idea into a successful product.