Create an Online Marketplace – 10 Facts about the Development of Marketplaces

The internet has now become a constant companion and is indispensable. This is especially true in industry and retail. Applications and web platforms enable companies to present their projects and services to customers, facilitating online purchasing as well as the payment and processing of invoices and liabilities. For this reason, there are a variety of systems—such as e-commerce applications and content management systems (CMS)—that address this topic and can provide a web platform for a company in a short time. If that is not sufficient, the software must be custom-developed. In this article, we will show you what to pay attention to when developing and using an online marketplace. 

The Essentials at a Glance

What Exactly is an Online Marketplace?

It is not possible to define exactly what an online marketplace is in general terms. Fundamentally, there are many possibilities and options, depending on which product or service is being traded. For example, eBay and Amazon are two very well-known online marketplaces and market leaders. Even the portal where you buy your newspapers or the local electronics retailer’s online shop is usually an online marketplace. 

In a broader sense, an online marketplace is also understood as an online platform or web app – a very complex application with many functions and possibilities. They are connected to a database and are often linked via an API to payment service providers or other programs.

Advantages and Objectives of an Online Marketplace

The benefits of an online marketplace are obvious. They offer visitors, customers, employees, etc., a wide range of options and services. For instance, a lonely user can search for their dream partner on a dating platform, a student can apply for a job at a company of their choice after graduating, or a family can book their vacation during the summer holidays. Online platforms and marketplaces are developed according to the wishes and requirements of the company. They are highly specialized, and virtually anything you aim to achieve with the app can be implemented. 

The advantages are equally clear. A good online marketplace is user-friendly, combining a multitude of functions and directly connected to the company and its database. For example, the platform can send emails, notify specific responsible persons, etc. Just think back to the last time you used a dating portal, booked a trip online, or applied to a company. Once you consider all the functions, you’ll understand what it’s all about and the benefits and objectives such a platform offers. And: what you see as a user is just the frontend. The backend, with all its functions and tasks – such as who is informed, when, and how they interact with the platform – is an entirely different matter. 

Online Marketplace Software – How the Website is Developed

The development of an online marketplace is very extensive and demanding. For this reason, modern software is used here that goes far beyond what is needed for a normal website. Thus, an online marketplace is usually developed not only with HTML and CSS but also with JavaScript, jQuery, and Node.js. In some cases, programming languages such as C or C++, Kotlin, Scala, or Java are also used. 

How exactly the development of your online portal will look, however, mainly depends on where the platform is to be used and what goals you aim to achieve. For example, a platform for booking travel requires different functions and different software than an online shop or an online portal for booking online courses that customers attend over the internet. In addition to booking software with payment capabilities, the online marketplace must also offer courses and educational materials, maintain records on participants and their performance in courses, and, if applicable, offer certificates to participants in the end. In contrast, a travel portal only needs to propose and present various trips and, if necessary, offer payment and booking options. 

Online Marketplace Features – What Must the Portal be Able to Do?

Online marketplaces offer numerous features and possibilities to provide visitors with an extensive range of products and services. For example, a purchasing or booking function in the form of an online shop can be found on almost all portals. 

However, the exact range of features of the website or online marketplace depends on the functions the portal is intended to serve. Almost all platforms include a registration function and a user area. In addition, there is usually the option to sign up for a newsletter and a booking or purchasing function. Some platforms, such as learning portals, also offer courses and educational materials, videos, exams, and tests, as well as a way to track the performance of participants and the courses they have attended. Some platforms even offer a certificate upon completion of a course. 

What are the Costs Involved in Developing an Online Marketplace?

The development of an online marketplace is very complex and extensive, and high costs can be expected, especially if the entire platform must be developed from scratch. The good news is that this is not necessary in most cases. Often, you can rely on existing solutions or use software such as a CMS (Content Management System) for assistance. A CMS can handle many of the platform’s simple tasks, such as user registration and account management, at a low cost. Costs then only arise for the development of the components that cannot be handled by the CMS. 

Furthermore, the type of portal influences the costs. The nature of the platform, its complexity, and the additional functions that must be developed in the end are all factors that affect the price of the final software. 

Content management systems such as WordPress or Joomla, Drupal, and Typo3 are free. In this case, you may only have to pay for the necessary plugins and extensions. Moreover, there are many good online shops that are already ready-made and can be used for a monthly license fee. If you really want to develop a platform from scratch, you must expect base costs of around 12,000 euros. Depending on which additional functions are required, roughly another 5,000 euros may be incurred. It depends on how complex the desired features are and on the method of implementation.

The table above gives you an overview of the costs you can expect when developing an online platform. However, the figures provided here are only approximate; the exact costs can only be determined once the details of your project and the workload are known. 

Shopboostr specializes in the development of online shops and online portals and, with its teams in Berlin and Munich, is a professional in the field. If you are planning your own online marketplace and need information about implementation or costs, we invite you to contact us without obligation. Our team will be happy to advise you and looks forward to your message. 

CMS or Custom Development – Which Solution is Better?

Nowadays, almost no one has to develop a website from scratch. Content management systems such as Drupal, Typo3, Joomla, and especially WordPress are very advanced and offer many features. Furthermore, the CMS can be expanded with additional functions through plugins and extensions. In particular, there is a huge range of such extensions available for almost any need in WordPress. If something is lacking in functionality, it can usually be added by programming a suitable extension oneself. WordPress is free, and the prices for plugins and extensions range from 10 to 200 euros. Thus, it is not difficult to recognize the cost advantages. Even if you have to program an extension, it is still cheaper than developing an entire website from scratch. And: you can later offer the plugin to the community for free or for sale, thereby generating additional income. 

So why develop your own online marketplace? There are certainly situations where, for reasons of security or flexibility, you may want to opt for your own platform. Although CMS like WordPress are flexible and offer many options and features, the code does not belong to you, and for some requirements or functions, you may be dependent on the software developer to implement them. Moreover, WordPress is based on open-source code. The software is run on millions of PCs and servers and is used for websites, shops, and other online presences.

This poses a certain risk, especially if you are working with confidential or sensitive data and products. The source code of WordPress is public and freely accessible. Anyone can download the software, view the code, and modify it. Furthermore, since WordPress runs on a large number of web servers worldwide, the software is also a target for hackers and attackers. The same applies to other CMS that are less widely used. Everyone is familiar with Drupal, Typo3, Joomla, WordPress, or plugins like WooCommerce.

So, if you plan to work with confidential or sensitive data, or if you are planning a project that is so complex and extensive that it cannot be implemented with a CMS, we recommend that you have an online marketplace developed from scratch. Another reason for custom development can also be compatibility with API interfaces or the development of your own APIs that you need for your portal. 

Shopboostr can provide you with extensive and competent advice on this matter and discuss and analyze with you whether, in your case, a custom-developed online marketplace is necessary, or if implementation using existing software such as CMS and plugins, etc., is possible. 

Online Marketplace Design – What Should be Considered? Who Can Do It?

If you decide to develop an online marketplace, you will need a professional who takes care of the implementation. It does not matter whether it is based on a CMS or if you have the new platform developed from scratch. An online marketplace is always a very complex project. This does not change even if WordPress or the CMS of your choice appears to be easy to use and manage. 

For your online marketplace, you will almost certainly need plugins and extensions, logos, and an attractive design. In addition, you may also need additional extensions that must be developed. To ensure that everything works together and integrates well, API interfaces are important. There is a lot that can go wrong here, and thorough work is essential. Especially if you are collecting customer data or payment information on your online portal, caution is advised. Appropriate security measures in the form of necessary certificates, the corresponding software, and its configuration are a must.   

For this reason, there are specialists in the development of online marketplaces who are experts in the field. Simple web designers are usually no longer sufficient for this. Shopboostr is such an agency, specializing in the development of online shops and online portals. Our team handles your project according to your requirements, either by utilizing a CMS and the corresponding software or by developing a fully in-house online marketplace that is specifically tailored to your needs and demands. 

In addition, you must not only create the online portal but also the corresponding content. This means you need photos and, if necessary, videos, texts, etc. If it is a learning portal, you will need teaching materials and exam papers. For a tourism and travel portal, you need images and information about the respective accommodations and offers, as well as their prices, etc. Then you will need the necessary licenses, a partner to handle payments for you, etc. These are just a few examples. Nevertheless, it is clear that a lot of work and many tasks await you. 

Security and Responsive Design

Two additional aspects that are of great importance in the design and development of mobile platforms are security and responsive development or design. Security is particularly important when you are working with customer data or payment information. But even otherwise, you naturally want to prevent your portal from falling victim to hacker attacks, your website being misused, or your services being exposed to the risk of an attack in any other way. Especially when working with customer data and payment information, security is, of course, of utmost importance.

Another factor to consider during development is responsive design. This refers to adapting the website and ensuring its compatibility with mobile devices such as tablets and smartphones. In our digital and mobile age, where more people access the internet via smartphone or tablet rather than a home PC or laptop, responsive design is indispensable. Again, you will need an expert who is knowledgeable in this area and knows how to make your online portal accessible to mobile users, and how to positively influence rankings and listings in search engines like Google.

Online Marketplace Financing

An online marketplace is an expensive and elaborate project. Therefore, it is not surprising that in many cases the necessary capital for development is not available. This is especially true when it comes to a platform that is developed completely from scratch.

In this section, we present you with some tips and options to successfully secure financing despite the high costs. Of course, options include banks offering loans. In the following table, you will find some loan options that could be suitable for financing your online portal. 

In addition, there are also financing options that have nothing to do with banks and loans. For this, we now present you with a few options and possibilities. Many of these options and possibilities can not only be used on their own, but can also be combined with each other. 

Option 1: Thorough Planning and Preparation

The first and most important step is the thorough planning and preparation of your project. An online marketplace is a very complex undertaking, and thorough planning and preparation are important not only to understand the workflows but also to accurately calculate the costs. The information and data from the planning and preparation are very important later on for financing.

Option 2: Create a Business Plan

Whenever you start a new company or project that relies on external financing, you must create a business plan. The development of an online marketplace is, of course, no exception. The business plan must include information about your project, its forecast, competition, etc. The business plan itself is a very important and extensive undertaking. We recommend that you thoroughly inform yourself about how to create one and, if necessary, consult a professional.

Option 3: Hire an Agency

An online portal is an elaborate and complex project. It requires solid expertise, the necessary tools, and the appropriate software for programming and development. So if you do not have a professional and experienced IT team, you should entrust the development to a professional agency. While this does increase the costs, it demonstrates that you are serious and significantly improves the success chances of your project and its financing. It is important that you compare various offers from agencies. This allows you to get to know different services and prices and make a selection. You can include the different offers with your financing application. This is further evidence that you have been actively involved and have dealt with the topic.

Option 4: Inform Yourself About Financing Options

Before deciding on a loan—for example, from your local bank—you should familiarize yourself with the various options and possibilities. There are a variety of loans and grants available, all with different terms and conditions. While a loan from your local bank is one option, a startup founder loan, which generally offers better terms than traditional banks, might be more suitable for your online portal. A thorough and detailed comparison is worthwhile here. This is especially important because you might not qualify for a traditional loan with your project, but you might be eligible for a founder loan, etc.

Option 5: Research the Competition, Find a Niche

There are online marketplaces as numerous as grains of sand. For example, if you want to create a video platform, there are established competitors like Vimeo, YouTube, or Dailymotion. All offer more or less the same services and share the majority of the market among themselves. Therefore, you must find a niche for your video platform that these competitors do not offer, and with which you can succeed. Otherwise, no one will grant you a loan for financing. For example, Dailymotion is known for allowing users to watch full movies and series, as there are no restrictions on the length of videos or content. On the other hand, Vimeo is a platform primarily used for professional videos and courses, while YouTube is a platform for many creators to earn money.

Option 6: Marketing and MVP

In general, a lot can be planned and talked about. However, implementation is often not so straightforward and lacks the necessary expertise. This can be mitigated by developing a prototype or MVP (Minimum Viable Product). This is essentially a prototype of the final product, although usually with very limited, only basic functions. Nevertheless, an MVP has the advantage of showing your project to customers, potential investors, and financiers, while simultaneously proving that you possess the necessary skills required. Furthermore, the MVP is also important for marketing, which you should definitely not neglect when planning a new project and its financing. 

Option 7: Contribute Your Own Capital

In every loan and financing, equity plays an important role. It shows the banks that you are willing to take action yourself and invest in your project—a sign that you believe in its success. For this reason, you should also contribute your own capital when financing an online marketplace. And: equity does not always have to be in the form of cash in the account. Expenses incurred in advance for marketing, servers, etc., can also be counted. It is important that the bank sees that it is not solely bearing the responsibility and risk, but that you are also contributing your part.

Option 8: Do Not Submit the Financing Application Alone

In many cases, the chances of obtaining a loan are better if there is a co-applicant. After all, the co-applicant brings their own capital and collateral to the loan. The same applies to the financing of an online portal. Here too, it may be sensible to submit the financing application together with a partner. The prospects for success increase manifold.

Option 9: Seek Investors and Partners

In addition to bank financing, it is also sensible to look for investors and partners. While investors primarily provide financial support and improve your available capital, partners can contribute in many areas. Partners can be companies that offer you a server or perhaps firms that agree to host internal courses and learning videos on your platform. Investors and partners demonstrate that people are interested in your project, which in turn increases the appeal for potential financing.

Option 10: Learn About Discounts and Reimbursements

In Germany, there are many tax incentives for startups and new projects. Additionally, there are various ways to have costs reimbursed. For example, office supplies, server costs, etc., are tax-deductible. This refers to money that you do not get back immediately and cannot use directly. However, over the course of the fiscal year, these can add up to significant sums that are well worth it. If in doubt, you should have a tax advisor provide you with comprehensive information. 

Hosting Your Online Marketplace – A Powerful Server is a Must

An online portal is a very elaborate and complex website. Therefore, good hosting is required. Shared hosting or a simple webspace are generally no longer sufficient here. You need a VPS, or preferably your own server. For larger companies with their own IT department, this is usually not a problem. Usually, there are already servers available that can be expanded if necessary, and the required personnel are also on site. 

If this is not the case, as is often true for startups and smaller companies, then you may need to opt for renting your own dedicated server. The monthly costs for such a server should not be underestimated, but you benefit from several advantages. All rented servers typically come with a guaranteed uptime. This means that the server is technically flawless and almost never experiences downtime. In the event of a failure or a technical defect, for example with the hardware, the provider must take care of the repair and, if necessary, replacement. Additionally, the support team is available around the clock in emergencies, so problems can be addressed at any time—even if you are not available or if the failure occurs in the middle of the night. This way, you may save costs and effort, and you always have competent personnel to turn to. 

Of course, you also always have the option to purchase your own server and use it. In this case, however, you will need to set up and configure the server yourself, and you will be responsible for handling technical problems and failures. Which option is better for you is something you must decide on your own. Our team will be happy to advise you on this and assist you in finding suitable and reliable hosting partners for your online marketplace. 

Online Marketplace Marketing – How to Get Noticed

Unfortunately, the creation of an online marketplace is only the first half of the work. The second half is almost just as challenging and equally important. Because this involves marketing. Every online marketplace needs substantial marketing, and the costs for it should be budgeted from the beginning. It is also important that the allocated budget is not too limited, so that the platform can differentiate itself from its competitors. Although this item is often neglected in favor of investing in development costs, this is where the greatest hope for ROI (Return on Investment) lies, which is why good marketing always pays off and should always be prioritized. Imagine your expensive online portal is finished and no one knows about it or uses it. Then you will only incur losses and have wasted both money and time.

Among the most important marketing measures for online marketplaces are, among others, the following options and strategies:

Content: A content strategy is indispensable for any online marketplace in its early development phases. This includes the costs for running a blog, creating high-quality articles, videos, and other content, as well as promoting them. The exact offering depends on the type of online marketplace your portal is.

SEO: Can be quite cost-efficient and, especially in the long run, almost always delivers a positive ROI. However, it takes some time (3 to 6 months) for it to take effect. SEO involves, among other things, creating specialized texts with relevant keywords and an appropriate structure. This results in these texts – and consequently your website – being better recognized and ranked higher by search engines like Google. Visitors searching for platforms like yours will find you more quickly this way. 

E‑Mail Marketing: E‑mail marketing is one of the most cost-efficient marketing measures. Here, you send emails with news and, for example, special offers and promotions to interested parties. The challenge: You first need to get users to subscribe to your newsletter list. 

Paid Advertising: Can quickly become quite expensive, especially if managed by inexperienced individuals. It is therefore only worthwhile if you have an adequate budget available. This budget can vary greatly depending on the competition for keywords and the industry, but should be at least 5,000 EUR for a two- to three-month campaign.

PR: Can be as expensive as paid advertising. It is best not to buy placements, but to promote your online marketplace with high-quality content. A good ranking in search engines and on industry portals and websites will then naturally and completely free of charge follow. Create a so‑called press release and send it to online media. This will draw attention to you and give the respective media the opportunity to contact you and list and promote your portal. 

Guerilla Marketing: Guerilla marketing includes relatively cost‑effective and innovative marketing strategies that are considered unconventional and can be groundbreaking for the success of an online marketplace. One example is the social network Twitter, which, several years ago during the Super Bowl in the USA, displayed users’ tweets in real time on large screens. By the end of the day, the number of Twitter users had quadrupled. Although the investment was not cheap at all, this tactic significantly contributed to Twitter’s success today.

Examples of Online Marketplaces and Portals

Now that you have received a wealth of information on the topic of online marketplaces and know what to look out for, we would like to share some well‑known online portals with you. These are intended to show you what a good online portal looks like and how your platform might look at the end of its development.

Conclusion and Summary

Examples of an Online Platform