Building a marketplace presents distinct challenges not often found in other startup models. The biggest of these challenges include:
- Generating enough revenue – since a marketplace facilitates transactions without directly producing goods or services, finding ways to generate enough revenue to cover operational costs is critical. You have to provide enough value to keep users on the platform and prevent them from seeking alternatives, as well find effective ways to charge for the platform’s services.
- Finding liquidity – marketplaces must be built to service and balance the needs of a wide range of stakeholders. Sellers must be able to find a buyer, and buyers must be able to find the product or service they’re looking for. Without finding this liquidity, a marketplace isn’t valuable to both sides and has a much lower chance of success.
- Cracking the chicken-and-egg problem – nobody wants to be in an empty room. So how do you get enough supply to attract buyers? How do you attract sellers without buyers? Inevitably, you will need to convince one side to commit before the other.
Building a marketplace that successfully tackles these challenges can require extensive customization to meet the needs of each side, and build trust and convenience. This has historically made building marketplaces a tricky endeavor. There aren’t many available SaaS tools that can build any type of marketplace in a similar way to how Shopify created a tool for launching eCommerce companies, and developing with custom code is very expensive and time-consuming.
But that’s quickly changing thanks to no-code software development.
No-code has lowered the speed and cost barriers to creating custom marketplace apps – without requiring any coding knowledge or technical expertise – and opened new opportunities for people to more easily launch new types of marketplace businesses.
In this post, we'll cover:
- Why no-code for marketplaces
- Options for building a marketplace app with no-code
- Marketplace opportunities
- No-code marketplace considerations
- When to use traditional code
How does no-code make building a marketplace easier?
Unlike custom programming, no-code platforms allow you to build marketplace products through a drag-and-drop interface instead of writing lines of code. The end result is the same as with traditional coding: a fully-functional web application that users interact with. But by using a more intuitive visual building interface, no-code tools make software development faster and more accessible to people without coding experience.
What this means is that no-code tools have lowered the technical and cost barriers keeping many entrepreneurs and businesses from building their own marketplace apps. If you have a clear vision and goal for your marketplace, you no longer need the deep technical expertise and training to execute it. And with a faster time to development and lower cost, marketplace founders can get their products into market faster and rapidly iterate on their path to product-market fit over time.
Building a marketplace app with no-code
There are a wide variety of no-code tools and approaches to choose from depending on your needs. No-code is not focused on one specific industry or area of work, there are many kinds of tools. However, all no-code tools have a specific purpose – and some are better suited for certain use cases.
Below are 3 different approaches for how to create a marketplace app without code and explanations around when they make the most sense for you to use:
- Software as a Service (SaaS) platforms: These types of tools are great if your product is standard and rudimentary. They’re typically one-size-fits-all solutions created for non-developers and they offer templates that allow you to build an MVP multi-vendor marketplace inexpensively, and usually in a matter of hours. However, the downside is that your marketplace is entirely constrained by the functionality that the SaaS tool offers.
For example, Sharetribe is a perfect option for someone without a large budget or tons of time who wants to build an online marketplace app. It offers standardized, common marketplace templates. Just be aware: as soon as you need more customization, you’ll hit a wall.
There are also a few open source multi-vendor marketplace platforms on the market, for example multi-vendor extensions to WooCommerce, which itself is the eCommerce layer built on top of Wordpress. Unfortunately these are often a dead end as they can be difficult to maintain, have large technical overhead, and no product support for non-technical users if something goes wrong.
- Hack together multiple no-code tools: To get started on your own at a really low cost point, but enjoy more customization than what an off-the-shelf SaaS tool can offer, you can build your online marketplace app with several different no-code tools.
This could include using tools like Softr, Zapier and Airtable to cobble together a multi-vendor marketplace app. One point of caution: this approach is best for crude tests around your marketplace’s viability and can be time consuming to figure out.
- General visual development tools: If you need lots of customization in your marketplace, but cost and speed are important too, these tools are your best option. These are a subset of no-code tools built to allow anyone to build applications to their specification without needing to code. This option will give you the ability to build your no-code marketplace in around 4-6 weeks, and continuously iterate.
For example, a no-code tool like Bubble.io is the closest alternative that there is to traditional code. You can build almost anything you want on Bubble without limitations. However, there’s a much steeper learning curve than just logging into a SaaS platform. See why many businesses have chosen to build their no-code marketplace with Bubble.
Rising opportunities for marketplaces
Thanks to the proliferation of no-code development, we're seeing more of the following types of marketplaces being built:
- Managed services marketplaces: In comparison to marketplaces that sell products (typically physical goods), marketplaces for services – ones that connect customers to humans to perform tasks – have lagged behind. However, we see a potentially massive business opportunity for marketplaces targeting services typically carried offline. The legal, home care, upskilling, industrial, and healthcare markets are all areas with addressable markets largely untapped. While services in this category typically have higher amounts of regulation, the ability to successfully navigate these areas simply means the creation of a larger moat around your business.
- B2B marketplaces: The U.S. restaurant industry alone does over $800 billion in sales a year. Yet wholesale food purchasers still rely on predominantly offline systems to take care of their food sourcing needs.
Online marketplaces that connect food distributors with local businesses is a marketplace we would love to see, and could help target issues like the fact that a third of all food produced for human consumption goes to waste. And the potential for B2B marketplaces is not just limited to the food industry.
- Niche marketplaces: Not every business must be built to scale. Niche marketplaces address specific, long-tail needs of a choice few customers - albeit extremely well. While many marketplaces will be built for fewer customers than Lyft ever hopes to reach, the lower cost structures involved in building these marketplaces means they can still be very viable, profitable businesses.
4 things to consider before building your no-code marketplace
If you’re worried about the costs and timeline of traditional software development and want to explore no-code to build your marketplace, we recommend you consider these tips to get started.
- Decide which features to build into your product: each marketplace needs certain platform components. The features they include will vary by the type of marketplace you are building and the specific needs of the user. Below are the core items every marketplace must include and considerations for deciding which features to incorporate into your platform:
- User onboarding - this is how users can join and engage with your platform. To ensure onboarding is simple for users, you should consider who can access the platform, when buyer signup is required, how users sign up and login, the style of the onboarding experience, etc.
- Supply management - this is the way sellers make whatever they’re selling available to buyers. To ensure sellers can easily manage their profile and availability of offerings, you should consider how the seller creates their profile, the complexity of the products and services being offered on your platform, how to manage quantity and availability, who can post and manage items for sale, how pricing gets set, and more.
- Discovery and matching - this is the process by which your platform connects buyers and sellers. It’s the key value proposition of your marketplace. To ensure this can happen smoothly, you should consider which user side does the searching, at what level buyers browse, how much choice users get, how options are displayed, how users filter and sort options, how additional product details are shown.
- Booking the transaction - these are the steps buyers and sellers take to initiate a transaction. To reduce friction points and ensure positive outcomes, you should consider how users can communicate between each other, how transactions are initiated and confirmed, and how the terms of the transaction are determined.
- Payments - executing payments that go with the transaction is a critical part of any marketplace. There are many things to consider when it comes to payments on your platform, including how the price is determined, when the payment happens, acceptable forms of payment, when sellers get their payouts, how payment delays are handled, payment providers, and more.
- Order/service fulfillment - this is the step in which sellers fulfill their promise. While this process often happens offline, you should consider what fulfillment services to incorporate into your platform, what updates and notifications users need, and how fulfillment completion is confirmed to help ensure buyers receive what they paid for.
- After the transaction - once the transaction has been fulfilled, you should consider a few additional things, including whether users review one another, how you will handle returns, disputes, or other post-transaction problems, and whether users get incentives for activity.
- Identify which tool(s) best serve your needs: if your needs are simple, a one-size-fits-all SaaS tool like Sharetribe might be just right. However, if your requirements are above average and you want to build something with custom features, visual development tools like Bubble are your best bet. This option will allow you to build your no-code marketplace to your specifications in around 4-6 weeks, and continuously iterate.
- Determine whether to DIY or get help building your no-code marketplace: if you’ve decided to use a no-code visual development tool, you have 2 options for building: DIY it or hire a no-code development agency. Tools like Bubble are still 5-10x faster than traditional development, but there’s a much higher learning curve to using it than the off-the-shelf services.
If you have the time and desire to learn a new skill or want to control every aspect of the product-creation process, go with DIY. This will save you a lot of money. However, if you have the funds and need to launch your app as soon as possible, don’t have an appetite for technical things, or prefer working with a team, hiring professional Bubble developers is a great option.
- Consider how you’ll support your product over time: no marketplace product is complete after the initial build – it must evolve in response to user feedback. When just starting out, the exact processes for how you’ll handle every need your users might have aren't known. To sustain a successful marketplace, make sure you have a plan to execute follow-on builds and an overall product roadmap over time. The ability to constantly iterate is where no-code really shows its value.
When should you create a marketplace app with traditional code?
In our experience, no-code software is the ideal approach for creating multi-vendor product, gig, rental, and digital marketplaces – however, it’s not right for every case. Sometimes, traditional programming is a better fit depending on the marketplace product and team needs.
If the underlying technology of your marketplace app is novel, or there’s a big strategic advantage to your app being proprietary, we recommend you build with traditional software developers.
Common reasons for bypassing no-code and instead needing traditional code include:
- Novel technology (e.g. machine learning algorithms)
- Huge scale (e.g. app needs to support millions of daily users)
- Custom visual interface (e.g. create something like Photoshop or iMovie within app)
- Team capabilities (e.g. you have existing developers who need to stay busy)
Ready to build your marketplace app faster with no-code?
We’ve worked with hundreds of startups, growing businesses, and Fortune 500 companies to launch complex, marketplace apps in a fraction of the time and cost of traditional development. Learn more about our process of building no-code marketplaces.