Ever wanted to build an app that allows users to shop smart by connecting directly to merchants? This is what peer-to-peer marketplaces do. Just look at Amazon and Alibaba and see how they leveraged from marketplace business model.
Fortunately, you don’t need to build another Amazon to succeed. You can start from the development of web platforms like Etsy or Fiverr. It will also get you far better results than e-commerce website. Moreover, you can get straight to building another peer-to-peer mobile app like Uber or Airbnb.
- Definition of P2P Marketplace
- Challenges of Peer-to-Peer Shopping Apps
- Types of Marketplaces
- How to Estimate Shopping Apps Like Etsy
- Features that Increase KPI
- Bottom Line
Difference between P2P marketplace platform and online store
According to our experience, this is a theme that most e-commerce newcomers are interested in. So for better understanding, we decided to outline the specific nature of both.
An online store is a multifunctional site which makes possible sales through the Internet. It means that you, as the online store owner conducts the sale, you bring suppliers and buyers together, you set prices and carry all expenses for the maintenance that your store requires.
A marketplace platform is a place where two groups of people meet: someone is looking for particular services or goods, others want to provide these products under particular conditions. Some marketplaces allow monitoring the execution of the transaction and comply with the obligations of suppliers and customers.
A person-to-person marketplace owner doesn’t make any sales, you just providing people with a platform for the exchange of things. The main challenge for you to make this platform user-friendly.
A special feature of Peer-to-Peer marketplace
There is an option of the marketplace to create separates shops on its platform. This type of online places are lucrative, but their development requires great investments. As a result, every online store must have certain functionality. So when we’re talking about the marketplace model, we advise you to make a trading platform where anyone who has a suitable product (or can provide a service) and wants to exchange it in return for an appropriate income. The approach makes much easier the development process and you will meet the goal faster.
Definition of peer-to-peer marketplace
Traditional e-commerce is one of many exchanges of goods and services. But peer-to-peer marketplaces similar to Etsy or Amazon are a many-to-many exchange of goods and services. And that’s where the revolution is happening thanks to stronger social connections and increased volumes of product you can sell through such platform.
Event traditional brands are also powering up peer-to-peer marketplace strategy in order to close the loop and sell a product without intermediaries. For example, they’re creating certified second-hand marketplaces for their products to be resold, or they’re linking their experts with customers together within a branded marketplace.
Online marketplaces make a profit through commission sales, affiliate programs, and promotional tools. Also we should mention the scalability of projects and geographic coverage that is unlimited indeed.
Challenges of Peer-to-Peer Shopping Apps
Building a two-sided marketplace app is hard. You build a platform and hope that people on the supply side and demand side come together to complete a transaction. But this lays some additional challenges. Especially if you’re aiming at FMCG (fast moving consumer goods) that require flawless logistics.
The reason it’s so challenging is due to the fact you’ve got two sides of the market to figure out. The process completely different from the situation when you build a normal company with only one type of customers and demand. But with a marketplace, you’ll have the same concept times two.
That’s why you should narrow your proposition to one single use case and only then stuck up new categories.
- Supply side: Restrict it to the very specific products category, that you can control and deliver on that promise.
- Demand side: Focus on finding the ideal customer that has the need for specific use case you marketplace offers.
The product category you choose will directly affect shopping app design. In particular, it will indicate how wireframes and product description pages should be structured: Product-centered, description-centered, rich in pictures.
If you choose housing market the app will focus on such properties as apartment size, location, and facilities inside. On the other hand, if your app will sell cars your app design should focus on mileage, vehicle class and terms of the lease.
Popular Types of Marketplaces
Choosing the right marketplace approach is vital for business success. This is very challenging subject, and unfortunately, a lot of entrepreneurs try to figure out their strategy after the app is created. But as you would see, each of types needs a specific set of feature in order to perform well.
Free-for-all: eBay, Craigslist, OLX. These are basic marketplaces where everyone can place their products and sell them directly to customers. All the in-details here, like shipping and payments, are settled whatever way users want. The quality of offerings and reliability of sellers was based on the user’s ratings.
Required features: Straightforward user rating, ability to add new product categories on the fly, clear layout that can easily display a large number of offers at once.
Curated marketplaces: apps similar to Etsy, Airbnb. These are very focused platforms, with identity, privacy and trust users demand nowadays. Such marketplaces leverage their social trust and convert this trust into liquidity of offerings. The more trust they gain – the more attractive sellers’ offering is. Thus the more transactions are made through those online shopping platforms.
Required features: Strict layout for offerings, advanced admin panel for pre-moderation of offerings, clear and trustful design, a specific set of delivery/payment services.
Fixed supply side: Uber, Fiverr, Homejoy. Such marketplaces are usually built on top of the existing curated platform. They usually have fixed offerings for a specified price range and proved value consistency. The supply side in such online shopping sites is locked to specific list of contractors that is strictly curated and refined by price and value.
Required features: Closed ecosystem build for a very specific product category. Inner payment system and mass pay gateway. Client support panel.
Those are basic approaches on how to build the liquidity of your mobile shopping app similar to Etsy, Amazon, or ASOS. Choosing specific approach is vital for successful business development.
How to Estimate Shopping Apps Like Etsy
There is a number of features and development tasks that are needed to be performed regardless of the type of marketplace you’ll choose.
Once you decided on the business model type your online shopping application will have, it’s time to pick up additional features.
Features that Increase KPI of Your Online Shopping App
As an owner of shopping app like Etsy, you earn money only from the successful transactions made through your platform. Meaning the more transactions are completed – the more money you gain.
Consider these features in order to increase the conversion rate of your shopping application:
- Style Boards – A flexible styling system will allow merchants better design their stores and make products more appealing to users.
- Badges – This feature will help merchants highlight specials propositions and get additional sales. It mayto suggest items based on previous searches. For example, if users click through Gucci scarfes, there will be shown closets that it thinks users will also like.
- Virtual Try-on – Virtual try-on system is especially useful if you’re thinking about development of something similar to ASOS shopping app. This function will definitely reduce the number of returns and thus your profit margins.
- Social Logins – This is a must feature. Integrating you mobile app with social platforms will speed up the registration process, improve user conversion rate, and offer users more personalized experience.
- Analytics – A straightforward sales statistics inside the app will make your app more appealing to merchants because they won’t need any kind of additional software to calculate expenses and marketing efforts.
- Loyalty program – The app can recommend things to users they may like and offer your customers personalized rewards, so they shop at your store more often. You can even reward user for being a frequent shopper and build loyalty programs starting from a certain sum of money spent in your store.
- Choosing option – It allows the users to trade items with a swap feature. Users can list an item and make it available for selling and/or swapping.
Also you should about such factors that mentioned below to consider while developing an app:
- Smart navigation system. Your app should provide easy search of the desired product for the user and don’t forget about smart filters.
- User-friendly interface. The intuitive clean design is half of the success and your online peer-to-peer marketplace platform is no exception. Therefore, it is important to hire a competent UI/UX experts to create an interface of your mobile resource.
- Entertaining element. The majority of popular trading platforms use a typical and boring approach to business that reduce user engagement. Therefore, any conceptual innovations can attract the target audience and help to stand out from the competition. Say, you can diversify the process of selecting and buying goods with the game component and thereby increase the involvement of users.
Summing up all the required features and function we can finally estimate the project. The full process of estimation is intricate and too complex to list here. You can get more info on how estimation works here. Or you can give us a call and we’ll send you a detailed quote for the project.
Here’s a rough numbers to give you a sense of budget: the basic shopping app development price will start somewhere near $20,000 and goes up to $100,000.
Peer-to-peer marketplace is still new and there’s many industries, assets, services, products, and niches that haven’t been occupied yet. This means if you have a unique idea or value-proposition, you can become one-stop shopping app.
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