Due to the rapid expansion of the sharing economy, many entrepreneurs like you aspire to start their own online B2B marketplace. Web-based markets can facilitate the exchange of goods, services, lodging, and pertinent information.
More than 80% of all worldwide purchase is done online, as per a recent statistics study. According to Forrester, 63% of B2B e-commerce business passes through marketplaces.
The first question that arises in your mind when you decide to create a marketplace is, “How Much Does it Cost to Build an Online B2B Marketplace in 2023?”
This blog is an answer to this tricky question. We’ll go through the different ways to build the marketplace and its cost structure. Also, I’ll help you decide which option is right for you during your starting stage.
How to Make an Online Marketplace?
Well, depending on the marketplace type, the cost of the marketplace differs since each multi-vendor marketplace platform has different features and tech stack.
You have a choice of three methods for starting an online marketplace,
- Custom Marketplace Development
- Ready-made Script Marketplace
- Marketplace SaaS
Note: Depending on the needs, price varies from time to time and from location to area. Only important considerations have been taken into account in this case. This estimate does not account for maintenance expenses such as CDN, security patches, transaction fees, commissions, taxes, etc.
Custom Marketplace Development – Building a marketplace from scratch
If you want to create a marketplace as per your business logic, then choose custom marketplace development. In this, you can decide the functionality of your marketplace.
The customized solution commonly needs extra resources, which obviously increases the cost of developing a marketplace website. But this is a perfect solution if you want to upgrade your marketplace platform and include some advanced features and integrations.
The cost of developing a marketplace website depends on how you launch the development process. The following are the primary choices,
- In-house development team
- Freelance services
- Software development agency.
The primary advantage of the final choice is that such businesses have extensive expertise in market expansion. You can be sure that you’ll receive the appropriate response in this manner.
How much would it cost to use a custom software method to create a marketplace website? Your development team’s location and hourly rates are the only two that may affect this decision. The typical hourly wage for a web developer in the USA, for instance, might exceed approximately $100, according to PayScale.
The rates are lower in nations in Eastern Europe. For instance, you would pay approximately $45 to $75 per hour if you decide to work with Ukrainian software development businesses.
Considering the typical hourly rates for web developers, find out how much it costs to construct an online marketplace. According to my reach using the information from the Payscale, the approximate cost to develop a marketplace in US and Europe countries are,
- The United States – $120-$170 per hour
- Western Europe – $75–$100 per hour
- Eastern Europe – $45-$75 per hour
On the whole, it will cost approximately $97,000–$155,000 for a marketplace with basic features. If you need any additional features, it will cost more.
Off-the-shelf Marketplace – Ready-made script software Marketplace
You can pick an off-the-shelf option if you want to develop a marketplace platform smoothly. Since you can launch the ready-made software marketplace faster than a custom software development solution, most entrepreneurs choose it. Most often, it occurs because you have the option to forego wireframing, development, and testing.
On the other hand, there are drawbacks to an off-the-shelf option, such as, Due to the software’s originality, some adjustments might not be possible. This software lacks uniqueness, also your competitors will have the same marketplace website as you.
You must make the appropriate adjustments for it in order to set it apart from the competition and stand out from the crowd. For instance, you and your competitors may have utilized the same Fiverr script from the same vendor to create a website like Fiverr. It confuses your audience as you both have the same features, template, and technology.
When you purchase pre-built script software, at first it seems like your website won’t need to be adjusted, and you won’t have to spend extra money.
In reality, this software installation calls for more staffing. Additionally, there is a chance that costs will increase due to improvements. Not to mention investing in the necessary gear for consistent performance. Furthermore, it is challenging to adapt a standard template for your marketplace to unique business logic.
Therefore, it takes much more time and works to make your online marketplace website totally customizable. As a result, both the timeframe and the development cost may increase dramatically.
So, give an answer to the following question, “How much will it cost to develop a marketplace for off-the-shelf scripts? is approximately $6,000–$9,000, according to Codesera.
Marketplace SaaS – Create a Marketplace
If you want to launch your marketplace instantly, you can go for a SaaS marketplace. The main advantage of using a SaaS for your marketplace is instead of purchasing, rent the platform.
Marketplace SaaS helps you have control of control over your platform and more room for customization. You can customize your entire platform from theme, logo, site template, description, static content, and many more.
“Why can’t I build my own SaaS Marketplace?” this might be your next question.
To answer this question, Yes, you can build a SaaS Marketplace, but it’ll become similar to the custom-made software.
You may spend costs on resources, technology, and time, and you cannot create a marketplace immediately.
But another question you may have is, “What is the difference between the Marketplace SaaS and the Off-the-shelf script Marketplace?”
In a pre-build script marketplace, you need to buy the software, whereas, in a SaaS marketplace, you only rent the software.
Also, because SaaS Marketplace is a no-code marketplace, it does not require coding expertise. Contrary to the other markets, you need strong technical skills to start a marketplace there.
In SaaS marketplace platforms, the provider host maintains the software. You need to have a resource or yourself maintain your software in the pre-build script.
The main advantage of the SaaS marketplace is that you can cancel the subscription at any time of starting a marketplace. You also have a free trial. You can testify about your marketplace before renting.
So, how much does it cost to build an online marketplace when you opt for ready-made solutions?
The SaaS marketplace’s approximate pricing starts from $50. Here is an example of an online B2B SaaS Marketplace, “QMarket.” One of the best marketplace SaaS, in my opinion. To build a market, they provide pricing based on subscriptions. The below image explains the SaaS marketplace’s pricing model.
So far now, you have seen the cost of developing the marketplace.
You also need to know the things that affect the cost of the marketplace.
Factors Influence Marketplace Cost
A marketplace requires you to invest a specific amount of money depending on the tasks it performs. The expenses paid toward its development depend on several factors. So, let’s examine the elements influencing the price of developing a marketplace website.
The price of developing a marketplace website is highly impacted by platform complexity. A software company exposes the cost as you provide your ideas, feature by feature.
Your marketplace only needs the essential features if you initially develop it as a minimum viable product. However, consider all the “extras” because they determine your anticipated operating expenses as you add functionality to the website. Make sure you take into account all factors that might result in future expenditure.
Verify that any feature you wish to add to your marketplace will benefit both you and your consumers before moving on.
While deciding the cost of the marketplace, you need to consider the expenses after development.
Branding Positioning & Promotion
Brand Positioning is all about how your target audience considers your marketplace. The marketplace rating is based on vendor profitability, customer satisfaction, improved communication, and simplicity of use, which is the most intriguing component of this data.
To position your brand, you need to promote it. Brand awareness and association are boosted by brand marketing initiatives, which are crucial. However, advertising efforts cost money, and you must invest in several campaigns across numerous media.
You cannot disregard the promotional charges because they are a crucial component of your growth plan for your company.
Better customer service and after-sales support may improve a brand’s position. As a result, your brand positioning will influence your audience reach, and this is where you can master your price strategy. Your pricing plan should be appealing to vendors and buyers if you operate a new marketplace with few users.
I conclude this blog by,
I hope this article gives you a detailed guide regarding the cost to build a marketplace. Cost is one of the many issues you need to deal with when building an online marketplace platform.
I suggest you start a marketplace in SaaS. The SaaS marketplace is the best option for creating a marketplace. Since in marketplace SaaS, you have a minimum initial investment for starting a marketplace. Find the best SaaS B2B Marketplace provider with the least initial startup amount so you can save your initial expense for the after-development process.