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Want to stand next to the other premium online marketplaces such as Amazon, Etsy, and Airbnb? Or Want to Invest in an Online Marketplace? Or This article will take you to the various aspects of Marketplace Business Models.


What is Marketplace Business Models?

For any business, there are two persons required one is the seller & other is the buyer. Without each, there is no existence of business by all means. The days have been gone when sellers search for the customer and customers search for the seller.

Now, due to the evolution & influence of technology, the physical border is diluted, and from one corner to another, both these can be connected where the buyer has the chance to buy a product with the best offer or a deal.


business models


If we go with the official definition, then Online Marketplaces are e-commerce websites that connect buyers & sellers via the internet. Two techniques take place here one is an app, and another is the website. Several service providers work as marketplace app development or marketplace website development company.

With the help of an app or website, transactions occur and are handled by the website owner. Although various business Models exist, you can choose and implement them with the help of on demand app development services.

What Are Marketplace Business Models Available?

Crucially, the marketplace business models are available based on three strategies, i.e., Commission Based, Subscription Based, and Listing Fees. On a per real-time basis, if we want to form a list, then there are the top 7 online marketplace business models available –

1. Commission Revenue Model

As the name implies, this revenue model is based on the commission that website owners charge sellers or buyers,s or both. The commission may be a fixed fee or some percentage of the transaction amount.  Each website owner has a policy that works accordingly.

Although these types of online marketplaces also offer free services as marketplace services on some items or products. The best examples of commission revenue models are – Amazon, Airbnb, Fiverr, and TaskRabbit.

2. Subscription Revenue Model

As per the basic nature of this model, the user has to pay a fee for accessing the platform. The websites or portals, or platforms that work on this model do not control the transaction between buyers and sellers. It helps several suppliers find out new customers and provides access to the database to find potential customers.

The payment takes place directly via credit card, debit card, or net banking. Behind this mechanism, the marketplace development solutions providers ensure a secure payment environment for all stakeholders.

Example: Couchsurfing

3. Listing Fee Revenue Model

These online marketplaces charge the customers to post the ad on their portal. The platform owners earn money through each posted ad. As an advantage, the fee remains less than the subscription model. Instead of posting multiple ads, the sellers post quality ads.

Example: Etsy

4. Freemium Revenue Model

It has both services paid and free. The free services come with limited features, but paid services have several premium features that help the sellers overcome market competition. As advantages, these are available for unlimited use and are the best way of fast lead generation.

The freemium revenue model platforms can be created with the help of some professional mobile app development company. If you wish to have it, you can hire a web development company in the form of a website. As an advantage, it helps to build a strong customer base and gain the trust of several customers.

Example: Craigslist 

5. Featured Listing and Ads

It is another type of online marketplace, where sellers subscribe for payment to buy the advertisement privileges to have strong visibility among the visitors on the platform. The featured listing empowers them to stay om the top among the category they have to choose for posting an ad.

Example: Zillow

6. Lead Fee Revenue Model

It is one of the marketplace business models that charge the suppliers in due of placing the bid against the request submitted by customers. One of the best examples of a lead-free revenue model is Thumbtack; at this site, the suppliers have two options: exact leads and partial leads.

While opting, for exact leads, the suppliers or service providers have to pay automatically forbidding, but the supplier will only pay for partial leads if they accept the work request(s).

Example: Thumbtack

7. Mixed Revenue Model

It contains the advantages of all business models. If you want to establish your own online marketplace, you don’t need to choose any of the above-listed models; you can opt for the combination as per your business strategy.

With the help of an on-demand solutions provider, you can have excellent online marketplace software in the form of an app or website. It will work as a revenue stream.



What Are The Advantages of Online Marketplaces?


Advantages of Online Marketplaces

Where the whole world is online, then how businesses can remain offline!

Technology’s influence is everywhere, so online marketplaces are one of the latest technologies-enabled business trends that serve as the platform to connect buyers & sellers in one place. So, here are some key advantages related to it.


  • It is a great source of revenue
  • Less marketing costs required
  • The best medium to expand the business(s) beyond the borders
  • It provides great insight to the customers about product availability & cost.
  • Generates trust between brand, suppliers, and customers
  • Due to the availability of the product’s wide range, customers used to purchase from it.
  • For vendors, it works as a great place for business
  • It can connect you with multiple suppliers or vendors worldwide
  • While having services from an online marketplace development, you can have a great business.


What Are The Challenges & Opportunities With Online Marketplaces?

Having a business and not facing challenges might be something wrong because, without challenges, business is nothing.

There are several challenges associated with each business, so the same is applied to the marketplace business models. However, you can consider these as opportunities to grow more while overcoming these.

The following list represents the key challenges faced by a marketplace app/website in the real-time scenario-

1. Supply & Demand

There is a standard principle on which every business that exists in this world is supply & demand. It is the prime objective of any business. It takes a lot of effort to overcome the gap, but it is a prime necessity. If marketplace development solutions are fine, then it is the best way to overcome this where buyers will meet sellers, and the supply gap can be filled.

2. Product Showcasing

Product showcasing is one of the important aspects of any online marketplace. If we look closely, we can observe that successful portals have better product showcasing mechanisms than their companions.

The marketplace platforms fail due to it. With the help of website development services, the products can be showcased efficiently to attract more customers. Once it has been done greater revenue will be generated.

3. Trust

Still, people did not move 100% online for the shopping they used to purchase some items from the physical shops because it gives them psychological satisfaction and also, they have less trust in online platforms. So, if there will be an online marketplace software with genuine & trustworthy services, then there are high chances to divert the customers to your portal.


Building a marketplace platform CTA

4. Revenue Generation

Still, revenue generation is one of the biggest challenges, especially when you are a small business owner. So before starting anything, first you have to hire dedicated developers who can perform website development & then you have to tap into the right customer market. After that, it will be such a great source of revenue.

5. New Marketplaces

Limitations to anything are not fruitful; in terms of business, if you have started your portal, you should seek new marketplaces for expansion. If you will be able to cater to the demand worldwide, then success is guaranteed. You can also generate the demand for products by providing quality products to the customers.

6. User Experience

One of the biggest reasons for failure is the worst user experience, so you need to get the best out of the best marketplace development solutions because it will help you provide a fantastic experience to the users such as buyers & sellers.

The latest technology integration is the need for time to provide a comprehensive experience to the users. It helps you retain the customers, but it also helps in connecting with new potential customers.

7. Return Policy

Fine-tuned return & exchange policy always works as the superglue for having a great bond with the customers. It is one of the crucial elements that is required for the trust-building activity. It will be highly beneficial in all terms, especially in the case of new or small businesses.

8. Customer Service

Excellent customer services always turn into earning more customers and is required for trust gaining & customer satisfaction. Therefore, it is a must element for any marketplace, irrespective of location.

How to Start an Online Marketplace?

If you are also searching for the same question, then you are at the right place. It doesn’t matter when you are going to start, it matters only how you will start your marketplace and what you will follow for it.

After reading the above segments of the blog, it clears that market business models can be established via an app or website or both as the other such as Amazon, and Flipkart. For the same, purpose you can hire dedicated developers. They will develop on-demand marketplace development solutions on behalf of you.

These online marketplaces are not bound by any technical platform. For example, if you want to launch an app on the android platform, you can go with the android app development services, or if you want to be specific about the Apple platform, you can hire iOS developers.

There are several app development marketplace providers which you can choose after consultation. It is your choice that you want to go with an app or website. Still, both of these must have some unique features that must provide an enriched experience to the customers and perform well in security, execution, and maintenance.


marketplace business models

What Are the Best Essential Features Your Online Marketplace Software Needs?

As an entrepreneur, you are only limited to idea generation. The responsibility of crafting online marketplace software is with the hired developer/developers. Whether you go for having app development services or opting for website development services, your software must have the following features-

1. A High-End App

Your app must be flexible and scalable, so the users must have a smooth experience using it at their end. It will not only be beneficial for the customers but also for the sellers and managers as well. All stakeholders must enjoy the online marketplace software while working on it.

2. Customized Design

Instead of having a standard design, a customized design always works fine. Here you need to hire mobile application development company whose team must be proficient in producing tailor-made online marketplace software or website, that helps users with easy navigation throughout all the sections so, the user can search for specific information with ease.

Suppose you want to launch your marketplace services on the iPhone platform, then the iPhone app development company must solve as per your requirements.

3. Cart and API Integration

The cart feature is a must for any online marketplace, so you also need to integrate it into your online marketplace software. In addition, it must be easy to use for providing the best experience to the user.

4. Secured Payment Gateway

You must have a secured payment gateway so the sellers and buyers can do easy transactions without fear of security & data breaches. The gateway must provide multiple payment options such as credit card, debit card, net banking, UPI, or other available options. It will be implemented by experts from an online marketplace development company.

5. Quick Onboarding

The buyers and sellers must be able to a quick onboard with the help of your online marketplace software. The reason is if onboarding is complex, then it may distract the interest of users. Therefore, it should be done with fewer efforts, including appropriate verification and validation.

For the same, marketplace developers for hire will be a great help. They will consult you but also make you understand how this will be going to happen.

6. Streamlined Process

Other platforms also exist on the internet, and the vendors or suppliers who have an account on your marketplace already may have an account on those. So, your platform must facilitate them to sell and manage their account easily. The process such as the listing of products, maintaining the records, and maintaining the stock inventory must be streamlined.

Your online marketplace software must provide on-demand solutions to them. On behalf of you, the hired website development services provider must be proficient at implementing it. The vendors must have smooth order management & processing via your marketplace.

7. Power Product Display & Search

If any user or customer is unable to find the available product on your portal easily, they will skip to another instead of wasting time. So, with you, they should find a powerful search option that facilitates them having great navigation to the desired product.

8. Tailored Check-Out Flow

Again, here is the importance of marketplace app development services provider because they will design a tailored check-out flow for you. After ordering the item, there will be no kind of complexity regarding check-out by the users. Before hiring marketplace development solutions, you should enquire about their existing products that do they have the facility or not.

9. Order Tracking

The order tracking should also be easy to have insight about that when they receive it. For the same, two things required reliable vendors and on-demand app development services. You will verify the vendors, but the eCommerce marketplace developers will create the system for easy order tracking.

How to Hire An Online Marketplace Development Company?


marketplace business models


It is one of the important questions that every marketplace owner must ask before hiring any mobile application development services. Although several service providers are available, it is quite a tussle task to find out the best.  Multiple factors affect it, so the following are listed that will help you find out outstanding marketplace development solutions.

1. Scalable Approach

The mobile app development company & its team must be proficient in providing scalable, flexible, and transparent on-demand app development that must provide ease & smoothness to all stakeholders such as buyers, sellers, suppliers, or vendors.

They should have experience developing robust architecture, so it must help handle complex operations such as database management, inventory management, and user management. Finally, whenever required, the developed solution should be scaled in need of expanding business.

2. Security 

It is one of the most crucial requirements for an online marketplace software. So, here you should seek a mobile app development companyIf you need an app or want to go with the website, then a web development company has a proven track record in providing secure solutions.

Cybersecurity is a major concern for all organizations, and multiple cases of data theft & security are regularly reported so, the solution developers must ensure it.

3. Social Media Compatible

Social Media is one of the powerful tools for any business. The marketplace website development company must have experience in developing social media and SEO-friendly compatible solutions.

It helps in improving brand awareness, and greater visibility. It creates a path to reach the potential customer base via various social media platforms such as Facebook, Instagram, Twitter, Pinterest, Tumblr & so forth.

4. Empowered with Analytics Tools

The online marketplace software must be equipped with salient dashboard features, and analytics tools will help the platform owners to analyze the sales, and user behavior, track the performance, great future insight, etc.

Only an experienced marketplace development solutions provider can make it happen, so check it before placing the deal with mobile app developers for hire.

5. Customer Service

The marketplaces run 24/7, so in the event of any technical fault or assistance, the online marketplace development company’s support team must be available to assist with the same.




The marketplace’s business models are one of the hot trends as customers migrate rapidly to online platforms. If we go with the data, then in 2018, 1.8 billion digital buyers existed, and by the end of 2021, it will rise to 2.14 billion approximately, or maybe the number will be high.

So here the point is to be considered is that there are ample chances of success to go with this idea, so for the same, you have to own a perfect online marketplace with the help of a marketplace development solutions provider that you can check from here.