After determining proper business models for your marketplace, it’s time to find an appropriate technical solution to build up the platform. To create an online marketplace, there are 3 popular options: writing the codes on your own, hiring a web professional team, or using WordPress software. Each choice has its own pros and cons, which will be discussed in this post to help you have a better decision.
In the series:
- An overview of online marketplace and its challenges
- Determine marketplace business models for your business
- How to make commission model work for your online marketplace
- How much commission fee to charge your users in online marketplace
Code your own
To code a website, you need coding skills, which are not easy to acquire by a majority of people. Moreover, a marketplace platform has a more complicated structure than a normal online shopping site, so, unless you’re an expert in web development, coding the website yourself is not a viable option. Since this solution is only for coders, a minor part of the whole business owners, this article will not dig deep into this field. Instead, the other two alternatives, which are likely to work better for many business owners, are discussed more thoroughly.
Hire a web development team
Yes, what you need is not only 1 or 2 web developers but a team including at least developers, designers, and quality controllers. Having your own development team gives you full control of the website building process. Everything is up to your decision from the idea to design and product features. But, the most premium solution is also the most expensive one, which could cost up to tens (even hundreds) of thousands of dollars. You need them not only at launching stage but also after the site goes live for maintenance. And remember, you’re building an online marketplace platform, so everything is more difficult, hence more expensive. 3 typical challenges when building an online marketplace include:
- Allowing multiple sellers to join and sell on your marketplace.
- Designing a payment flow from buyers to marketplace owner, then to sellers.
- Managing user database and all activities on site.
The first challenge stems from the fact that marketplace is where many sellers gather together while in a single store, you’re the only seller. To solve this challenge, you need a system that allows users to become a member and register to sell on your site. More importantly, identity verification is necessary to check if they’re qualified to sell on your site.
The second challenge is a serious one as money is involved. As discussed in previous posts in the series, since almost all modern marketplaces use commission fee in their business models, the chances are you’ll apply this model in your marketplace. In this situation, the money doesn’t simply flow between customers and you. 3 parties are involved in the process: the customers, you – marketplace owner, and the sellers. Therefore, the money division is also more complicated. The system needs to be able to transfer the payment from customer’s account to yours, from which the commission fee is subtracted from the total payment, and finally send the rest to seller’s account.
Thirdly, having many sellers on site requires you to set up a complete management system to control the user database and all activities happening on site. Now that you don’t directly perform all the transactions, you need an effective tool to provide you with necessary transaction data when needed.
But these few challenges are just a small part of a long journey from creating the platform design to the very first version of your marketplace. After validating your business idea, you need a web designer to sketch your idea into professional designs, then hire web developers to code your website, and finally get a quality controller to test your marketplace before exposing it to the first few thousand customers. As your site goes live, the team is needed for further improvement.
With such many things to do, the amount you have to pay the web development team is a lot. If you’ve got a big budget, this option is a great investment.
What is WordPress?
WordPress is a completely free, open source software that helps you create your own website with no coding knowledge required. In non-geek language, WordPress is probably the most popular and easiest web creation tool in existence today.
“Beautiful designs, powerful features, and the freedom to build anything you want. WordPress is both free and priceless at the same time.”
Started out as a blogging platform, WordPress has quickly evolved into a powerful software that empowers a wide variety kinds of websites, one of which is online marketplace platform. There’s hardly anything you couldn’t do with WordPress theme and plugin collection.
Misconception about WordPress: WordPress isn’t made for eCommerce
One of the most common misconceptions about WordPress is that it’s just a blogging tool so it’s not a good idea to build a marketplace with this software. This is an outdated viewpoint as WordPress has strongly developed ever since to become the most popular content management system (CMS). 28% of the web uses WordPress, serving different purposes from personal blogs to business websites. In other words, one out of every 4 websites on the Internet is created based on WordPress, and interestingly blogs just take up a small piece of the cake. So, you can rest assured that you can totally build a marketplace website with WordPress.
WordPress for your marketplace
Comparing WordPress with 2 options above, you might be worried that:
- The pre-built UI/UX design from an external software like WordPress might not live up to your expectation. But, marketplace site structure is built by WordPress experts who have experience in creating online marketplaces that convert, so they know how to design an excellent user flow for your business. In addition, WordPress is an open-source software so you can easily make some customization whenever you want. Most WordPress marketplace theme and plugin providers have their demo sites available, so you can take a tour around all potential themes to see if they match your desired concept.
- Default WordPress doesn’t support shopping cart and payment gateways. This problem has been solved when popular payment gateways like PayPal and Stripe are included in almost all WordPress marketplace themes. Local payment gateways can also be easily integrated in the form of a plugin. This is what makes WordPress incredible when everything you need for an online marketplace website is solved within a plugin or two, and a theme. Great-looking and feature-rich marketplace themes help you with the site’s aesthetics and design elements, while a limitless collection of WordPress plugins is a powerful addition enabling you to extend your marketplace’s functionality.
Additionally, using WordPress to build your marketplace, you have the system update and maintenance work taken care of by WordPress theme and plugin providers. You don’t need to touch the code, just focus on growing your marketplace instead.
And now comes an important point: Pricing. Among 3 options, WordPress is the most economical one. Let’s do a quick math!
Let’s start with a marketplace theme – called MicrojobEngine. It’s gorgeous and it’s only $89.
Next, you’re going to need some plugins: PayPal Express Checkout – which is free, Job Verification, Bookmark, and other plugins to count on this plugin list. All plugin’s price ranges from $0 to $45. Adding up everything together, the total amount is around $500 or even lower. How about the other 2 options? Sure that their cost can’t be counted by hundreds but by thousands of dollars!
So, I would say that WordPress is an economical choice for small to medium business owners and for those who don’t want to touch the code lines but want a premium, easy to use software with continuous support.
After validating your business idea, the next step is to turning your hand to a minimum viable product (MVP) marketplace platform to expose it to first few thousands of customers. There are three possible options to build your marketplace: writing code yourself, hiring a web development team and using WordPress software. The first choice requires you to have expert coding skills and a great amount of time and effort. On the other hand, the second option gives you full control of the marketplace from the idea to conceptual model and the final platform but it’s also the most expensive solution. Last but not least, using WordPress software is an economical choice as it costs you just hundreds of dollars to create a MVP platform plus it’s easy to use for most non-tech business owners.