How do you build a peer-to-peer marketplace platform and how much does it cost?

Peer-to-peer (p2p) marketplace platforms offer excellent opportunities to attract an audience and earn income. With the fast-growing demand for peer-to-peer marketplaces like Airbnb, Uber, BlaBlaCar, Upwork, Craigslist, eBay, and Etsy, companies across various sectors are increasingly investing in a p2p business model.

As for real-life success stories, let’s consider Etsy. Established in 2005, Etsy transformed from a technology startup into the world’s leading p2p e-commerce marketplace for handmade and vintage items. In 2020, the organization was able to generate a revenue of $2.32 billion, showcasing a 34% y-o-y increase while net profit was valued at $349 million. A year later, Etsy’s revenue accounted for nearly $2.33 billion.

Launched in 2015, Upwork is another example of a successful peer-to-peer marketplace. In 2020, Upwork’s revenue amounted to $373.63 million whilst the number of core active clients reached 145.4 thousand.

This article describes how to build a peer-to-peer marketplace, from implementing a basic set of features to choosing a technology stack. You will also learn what budget you should have to develop a p2p marketplace application and how much time it will take.

Table of contents

What is a peer-to-peer marketplace?

Also known as a customer-to-customer (C2C) marketplace, a digital peer-to-peer marketplace connects companies and individuals for exchanging goods or services via a single platform. In a p2p business model, a user can be either a vendor or a consumer. Basically, a p2p marketplace brings together people with similar purposes.

Online peer-to-peer marketplaces are usually characterized by a shorter sales cycle compared to other types of marketplaces.

Examples of globally recognized p2p marketplaces in different niches:

• E-commerce — eBay, Etsy
• Ride sharing — Uber, BlaBlaCar
• Hospitality — Airbnb, HomeAway
• Crowdfunding — Kickstarter
• Freelance, project outsourcing — Upwork, Helpware, TaskRabbit

At the moment, p2p marketplaces are seeing steady growth across multiple industries, with temporary declines triggered by the COVID-19 pandemic.

What should you do before making a p2p marketplace?

Before hiring a software development partner to build a peer-to-peer marketplace, it is important to determine a business model and specify the main requirements. At Arateg, we recommend that you take the following steps:

1. Define a project idea and choose a niche

An organization should decide the target audience and the sector in which a digital p2p marketplace will operate. For this purpose, a company can analyze the leading marketplace platforms in every vertical, communicate with potential customers, as well as study investment reports and market statistics. To learn more, read our article about the top 7 online marketplace niches for 2022.

It is worth noting that the idea does not have to be unique and break stereotypes. The key to success is to deliver a quality software solution that adds value to users and stands out from the crowd.

2. Identify the core functionality

Regardless of the industry the app belongs to, all digital peer-to-peer marketplaces have basic features, such as registration and authorization, user profile, search, listings, online payments, as well as an administrator panel.

However, it is crucial to develop functionality that will allow you to address domain-specific issues. For instance, p2p freelance marketplaces may include private chats and video/audio conferencing while users of e-commerce platforms generally do not need this functionality.

3. Choose a p2p marketplace revenue model

As a rule, peer-to-peer marketplace owners do not produce, supply, or sell any products or services. In fact, they provide a platform that connects merchants and buyers. Regarding income, p2p marketplace operators depend on the sales volume generated through the app. This way, it is reasonable to identify a monetization model prior to peer-to-peer marketplace development.

For example, if you are going to provide vendors with valuable but comprehensive functionality, say, real-time data analytics and reporting, you should consider implementing a freemium monetization strategy. Other popular monetization practices involve registration fees, transaction commissions, listing fees, subscriptions, and paid advertising. Read our article about marketplace revenue models to find out which one will meet your business objectives.

Now, let’s consider how to build a peer-to-peer marketplace, from creating a quality user experience design to delivering the functionality that will meet end-user goals.

How to create a UI/UX design for a peer-to-peer marketplace

User interface (UI) / experience (UX) design has a direct impact on return on investment. Amazon Web Services revealed that 88% of users are unlikely to revisit a website after receiving a poor experience.

Therefore, it is essential to not only create an appealing design of a peer-to-peer marketplace but provide an amazing UX, making it enjoyable to interact with the product. For this purpose, software experts should follow certain guidelines.

1. Develop an intuitive user interface

With the aim to make an appealing design, it is crucial to ensure simplicity. As people come to a p2p marketplace for exchanging goods or services, they should be able to easily complete the required actions. In this regard, unnecessary design elements will only overwhelm the interface, making it difficult for users to achieve their purposes. So, designers must place elements such as a menu, buttons, and close windows where visitors expect them to see.

On top of that, it is important to minimize the number of fill-in-the-blank fields and other fragments on the page. Additionally, it is advisable to include only those graphics that will help vendors and consumers perform their tasks or entertain them.

2. Create a unique branding theme

With a custom UI/UX design, it is much easier to gain recognition and stand out from rivals. Certainly, a company can purchase a market-ready design template and customize it according to business objectives, this way reducing costs and time to market (TTM).

However, other marketplaces may have almost the same user interfaces that differ from yours by just text size and color themes. In addition, when using a template, optimizing a p2p marketplace website for search engines is anything but a trivial task.

Thus, to improve user engagement and increase project success chances, we recommend that you create a unique branding theme.

3. Implement a visual hierarchy

A visual hierarchy is about arranging and organizing p2p marketplace content and elements (for example, colors, typefaces, text size and position) in a way that users pay attention to the most vital things first. In fact, this means guiding sellers and buyers to perform the desired actions in an enjoyable manner.

4. Provide smooth navigation

To build a peer-to-peer marketplace with an outstanding UI/UX design, it is essential to enable smooth navigation between mobile app screens or web pages. Users should be able to easily move from A to point B in the fastest way possible.

For this purpose, software experts need to enable search across numerous filters and categories while making a convenient menu structure. It is also important to include navigation in the footer of a p2p marketplace application.

5. Achieve responsiveness

Since the number of smartphones is increasing at a rapid pace, people access p2p marketplace websites via mobile devices more and more often. Statista reports that in the fourth quarter of 2021, mobile devices (except tablets) generated 54.4% of global website traffic, consistently surpassing a 50% mark since 2020.

Meanwhile, visitors are unlikely to interact with web solutions if they do not look identical on all screens and operating systems. Analysts at Hubspot found that 93% of users had left a website as it did not display properly on their devices.

Hence, a peer-to-peer marketplace application has to look as intended on all devices and platforms, including macOS, Linux, Windows, iOS, and Android. It is also crucial to ensure compatibility with all modern browsers that involve Firefox, Safari, and Google Chrome.

Time to create a UI/UX design: 180 hours

Top 10 features of a peer-to-peer marketplace app

1. Registration and authorization

In order to boost the audience’s satisfaction, peer-to-peer marketplace owners need to provide users with multiple ways to sign in and sign up, for example, via phone, email, and social media accounts (i.e., Facebook, Instagram, LinkedIn).

What’s more, users should not be forced to register on the platform to start interacting with it. Having no possibility to try out functionality and check out goods or services, visitors will leave the marketplace without a willingness to come back.

Time: 60-80 hours

2. User profile

A user profile is among the main features of a digital peer-to-peer marketplace. As a rule, a customer profile involves information such as a photo or icon, name, age, gender, contacts, location, zip code, and purchasing history. A seller profile generally contains vendor descriptions, offers for sales, and the number of fulfilled orders.

Time: 100 hours

3. Listings

When building a c2c marketplace platform, it is important to implement listings. Both sellers and buyers should have the possibility to add their products or services to the system, change and remove advertisements, edit descriptions, upload photos, as well as delete items.

Time: 120 hours

4. Search

The search bar is among the primary features of an online peer-to-peer marketplace. In order to enhance the user experience, a company has to provide as many filters and categories as possible. Thanks to this, customers and vendors will be able to quickly find the necessary information, for example, a product, merchant description, or client reviews.

Time: 100-120 hours

5. Online payments

With the view to boost user satisfaction and increase sales, it is advisable to deliver a variety of payment methods. To deliver this comprehensive functionality, software engineers basically integrate payment gateways that act as virtual analogs of third-party terminals.

Serving as intermediaries between vendors and consumers, gateway systems verify customer identity and authorize transactions whilst protecting parties against issues like fraud, insufficient funds, and exceeding credit limits. Examples of popular gateways are PayPal, Stripe, and Braintree, each providing its own application programming interface (API) that can be integrated into a web or mobile solution.

Using a gateway, peer-to-peer marketplace developers can implement a wide range of payment options and ensure support for multiple cryptocurrencies. For instance, Braintree allows for enabling online payments via:

• cards (Visa, Mastercard, Discover, and American Express)
• digital wallets (Apple Pay, Google Pay, Secure Remote Commerce, Samsung Pay)
• PayPal
• Venmo
• ACH Direct
• local online payment options (MyBank, BLIK, Giropay, P24, SOFORT, iDeal, Trustly, and Bancontact)

Find out how to choose a payment gateway that will align with your business objectives. Here at Arateg, our team can integrate a lot of payment gateways into your online p2p marketplace, involving PayPal, Stripe, Braintree, 2Checkout, Amazon Pay, Authorize.net, and Square.

Time: 120 hours

6. Checkout

A checkout is a page that customers fill out before making an order or purchase. This page usually asks buyers to provide details such as name, surname, phone, email address, and preferred delivery option. Additionally, it is important to allow shoppers to confirm that they have correctly completed the necessary fields.

Time: 120 hours

7. Reviews and ratings

To build a peer-to-peer marketplace that will meet the audience’s needs and expectations, it is essential to add a review and rating section. Thanks to this feature, buyers will be able to find the best deals based on client feedback. Sellers, in turn, will manage to measure user satisfaction with their goods and services. You, as a p2p marketplace owner, will increase the consumer credibility in your platform.

On top of that, you can let users ask vendors about their products and request information, for example, about shipping or refunds. By making merchant replies visible to all p2p marketplace visitors, you will improve customer loyalty and motivate more users to register on the platform.

Time: 120 hours

8. Notifications

By enabling notifications, merchants can send buyers email or/and smartphone messages about order status, price decrease, shares, special offers, and product availability. In order to build this functionality while shortening the time to market, p2p marketplace developers can integrate an API, for example, Firebase.

Time: 160-200 hours

9. Data analytics

Employing data analytics, vendors can identify the most popular goods, track the number of product views, and monitor the sales volume generated within a certain period. To develop this feature, software engineers can utilize off-the-shelf solutions, this way saving time and costs.

In our online marketplace development company, we integrate marketplace applications with tools such as Mixpanel, Kissmetrics, Firebase Analytics, Brandwatch, Zoho Pagesense, Sprout Social, or Woopra.

When creating an e-commerce fashion marketplace, for instance, our team used Mixpanel, which allowed brands to see what groups of leads showcase the best conversion rate, determine reasons for churn, make the audience’s segmentation, and much more.

Time: 100 hours

10. Admin panel

In fact, an administrator panel is not a feature but a web app inside a p2p marketplace platform. Only your employees will have access to an admin panel that can allow for monitoring vendor behavior, initiating promotions, analyzing sales reports, and deleting inappropriate content.

With this functionality, you will be able to view the history of transactions and change pricing plans. Additionally, it is possible to add and block users, enforce p2p marketplace terms of use, as well as assign data access permissions.

Time: 2000-2500 hours

How much time does it take to build a peer-to-peer marketplace?

How much does it cost to build a peer-to-peer marketplace?

The price of creating a p2p marketplace is based on the time required for project delivery and software expert salaries that significantly vary across the world. Western European IT firms typically earn $40–$100 per hour while UK and US agencies can request $50–$150 or even more. Online marketplace development companies in other countries, for example, in Georgia, may charge $20–$50 per hour.

Let’s consider an approximate budget that you should have to build a peer-to-peer marketplace depending on the location of an IT partner:

• US, UK — $159,000–$564,000
• Western Europe — $127,200–$376,000
• Georgia — $63,600–$188,000 (including our company)

So, by outsourcing peer-to-peer marketplace development to Georgia or another country with lower rates, you will manage to cut expenses by 2.5–3x while software quality will not be worse.

However, enterprises may encounter issues like different time zones and project control challenges. Read our article to find out how we set up effective communication with clients, ensure process transparency, and provide data confidentiality.

Technologies used to build a peer-to-peer marketplace

By choosing a technology stack properly, it is possible to improve the speed of p2p marketplace development while achieving high availability, scalability, and data security. Furthermore, software experts can enable stable, uninterrupted performance and zero-time infrastructure maintenance.

To create a peer-to-peer marketplace platform, software engineers can employ the following technology stack:

• Programming languages: TypeScript, JavaScript, Python, Swift, Kotlin, React Native
• Libraries, tools, and frameworks: React, Redux, Redux-Saga, Storybook, Django, Flask, Node.js, RabbitMQ, Memcached, Redis, Firebase Cloud Messaging
• Database: PostgreSQL
• DevOps: Amazon Web Services, Docker, Kubernetes

For the purpose of saving time and costs, programmers can integrate an online p2p marketplace with various APIs for:

• Sing in/up: Gmail, Facebook, LinkedIn
• Notifications: Firebase
• Payment gateways: Stripe, PayPal, Braintree
• Feedback and comments: Disqus

As p2p marketplace developers do not have to build this functionality from scratch, you will improve TTM whilst preserving end-solution quality. Have a look at the list of third-party integrations that you can use when making a digital p2p marketplace.