How to make an online auction marketplace like eBay: time, cost, features, monetization

How to make an marketplace like eBay

Driven by changing consumer preferences, the e-commerce market is growing by leaps and bounds. According to Insider Intelligence, global e-commerce sales are projected to account for $5 trillion in 2022 and $6 trillion by 2024.

The US online retail sales are poised to see the most significant increase, reaching $1.6 trillion in 2022. Prior to the COVID-19 outbreak, Insider Intelligence did not expect e-commerce sales to cross $1 trillion until 2024. ThriveMyWay reports that now around 79% of Americans prefer to make purchases via the Internet.

In this context, the popularity of marketplace applications is rapidly increasing. Last year, $3.23 trillion was generated through the top 100 marketplace platforms. Since online sales offer convenience, the demand for digital auctions has surged. Additionally, electronic auctions provide users with flexibility in terms of time and place. Technavio says that the digital auction market value is anticipated to amount to $1.9 billion, showcasing a CAGR of 9.7% during 2021–2026.

This way, auction marketplace development brings excellent opportunities to attract an audience and earn income. As of today, eBay is the worldwide leading auction marketplace that connects merchants and buyers across multiple countries. Currently, eBay has over 185 million active shopper accounts and more than 109 million visitors per month.

In this article, our software experts describe how to create an online auction marketplace like eBay, including the primary features, monetization strategy, technology stack, and budget assessment. Have a look.

Table of contents

A success story of the eBay auction marketplace

Initially known as the AuctionWeb, eBay was launched in 1995 by computer programmer Pierre Omidyar. Two years later, the US startup was renamed eBay. Acting as part of Pierre’s personal site, soon eBay became the first web auction marketplace supporting person-to-person trading.

In the beginning, the founder treated a bidding website as a hobby. While originally the platform was available for free, the Internet service provider forced Pierre to upgrade to a paid business plan with the increasing amount of traffic. Since the price per month climbed from $30 to $250, Pierre decided to monetize an online auction marketplace to cover costs and generate profit.

In 1997, the startup managed to raise $6.7 million from a VC firm Benchmark Capital. A year later, a bidding marketplace had 500,000 users and a revenue of $4.7 million in the US. In September 1998, eBay conducted an Initial Public Offering.

Starting out by selling collectibles, eBay expanded categories into almost any saleable product, this way streamlining business growth. Furthermore, in 2000, an online auction marketplace introduced a “Buy it now” button, thereby allowing shoppers to make purchases instantly and boosting user engagement.

Aiming to earn a higher income and reach new markets, in 2002 eBay acquired the iBazar European auction website and PayPal online payment service. As of 2008, eBay had 15,000 employees and a revenue of nearly $7.7 billion.

In 2008, the organization released the first mobile e-commerce app for iOS. After some time, eBay provided support for the Android operating system, too. With the view to facilitate shipping to international customers, eBay implemented global shipping programs in 2012.

To date, eBay has transformed from a small marketplace startup into a multinational company. In fact, eBay operates as a customer-to-customer and business-to-consumer e-commerce marketplace. If you want to learn more about the types of marketplaces, read our article on the topic. As of 2021, eBay’s revenue amounted to $10.42 billion.

How to make a UI/UX design for an online auction marketplace

Creating a modern user interface (UI) / experience (UX) design is vital to auction marketplace success. By providing ease of use and delivering an amazing UX, you will engage the audience and minimize churn. Analysts found that 88% of visitors will not come back to the website after receiving a poor user experience.

However, making an excellent UI/UX design is anything but a trivial task. Let’s see a few important rules of how to make a UI/UX design that will surpass user expectations.

1. Create a custom UI/UX design

Prior to e-commerce marketplace development, it is important to decide whether you purchase a design template and tailor it to your needs or make your own from scratch. At Arateg, we recommend that you choose the second option to receive the best quality and the highest level of customization.

With a custom UI/UX design, you will also prevent the risk to meet a clone of your online auction marketplace like eBay. On top of that, it will be easier to increase Google search rankings to drive traffic to the website.

2. Provide design intuitiveness

In order to create an appealing design and improve the audience’s satisfaction, it is crucial to develop an intuitive user interface. Vendors and consumers must be able to easily complete the required actions, from adding items and their descriptions to finding product reviews.

For this purpose, design elements—dropdown menus, text, buttons, icons, close windows, etc.—have to be placed where people expect to see them. It is also advisable to keep a design theme minimalistic without using too many colors and unnecessary elements that will only overwhelm the interface and ruin the audience’s enjoyment.

What’s more, UI experts should minimize the number of fill-in-the-blank fields and include only those graphics that will help users perform their tasks.

3. Ensure smooth navigation

Another important rule is to provide smooth navigation between online marketplace screens or pages, so that users can move from A to point B as fast as possible. With this aim in view, designers should organize content and elements in a way that visitors can interact with an auction marketplace like eBay without even thinking.

Then, it is essential to enable convenient search across various filters and categories. In addition, software experts should incorporate navigation (Categories, About the company, Terms of Use, Contacts, etc.) into the footer of an e-commerce marketplace.

4. Make sure the app looks great on all devices

Achieving responsiveness is among the principal design guidelines. According to Statista, in the Q4 of 2021, mobile devices (except tablets) generated 54.4% of worldwide website traffic, consistently surpassing the 50% mark since 2020. Hubspot revealed that 93% of visitors left a website that did not display as required on their mobile devices.

In this regard, it is crucial to make an e-commerce marketplace design that will look identical on all devices and operating systems, involving macOS, Linux, Windows, iOS, and Android.

Time to create a UI/UX design: 180 hours

Top 15 features of an online auction marketplace like eBay

1. Authorization and registration

Authorization and registration are among the core features of an e-commerce marketplace like eBay. Depending on the user role, merchants and shoppers will get access to different functionality.

In order to prevent customer churn, it is important to allow for interacting with an online auction platform without creating a user profile. This way, buyers will have the possibility to browse products and register only when they want to make purchases.

It is also crucial to offer multiple ways to sign in/up, for example, via phone, email, Google account, and social networks (Facebook, LinkedIn, Twitter, etc.). Thanks to this, you will manage to attract a larger audience and improve user engagement.

Time: 60-80 hours

2. User profile

A user profile enables merchants to introduce themselves and list their goods for sale. When creating a profile, vendors fill out their name, contacts, location, item prices and photos. Shoppers, in their turn, can save their personal, payment, and shipping details, avoiding the need to provide this information every time they make an order.

Time: 100 hours

3. Catalog

A product catalog is another key feature of an online bidding marketplace like eBay. With this e-commerce marketplace functionality, consumers can view goods, item details, prices, delivery information, and vendor contacts.

Time: 200 hours

4. Product search

Search enables shoppers to browse goods by price range, brand, color, size, location, and shipping methods. When implementing this feature of an online auction marketplace, it is essential to add as many filters and categories as possible.

Representing a global e-commerce marketplace, eBay has a variety of categories that involve Motors, Electronics, Clothing, Shoes & Accessories, Sporting goods, Health & Beauty, Toys & Hobbies, Business & Industrial, Jewelry & Watches, Collectibles & Art, Home & Garden, Books, Movies & Music, Baby Essentials, and Pet Supplies.

To boost consumer satisfaction, you should allow buyers to find and view products by their rating, cost (i.e., starting from the lowest price), and popularity.

Time: 100-120 hours

5. Product page

A product page contains item descriptions, photos, videos, reviews, and ratings, so that shoppers can view the necessary details and make informed buying decisions.

Time: 40 hours

6. Live auction

A live auction is a distinctive feature of an e-commerce marketplace like eBay that allows it to stand out from the crowd. With this online marketplace functionality, shoppers can place bids for goods they are interested in. Merchants, in turn, should have the possibility to set a starting price for their products.

Time: 300 hours

7. Shopping cart

When building an online auction marketplace similar to eBay, it is essential to add a shopping cart that will let consumers select goods from different merchants and buy all of them at once.

On top of that, shoppers should be able to add and remove items, as well as update product quantities. The final price has to be automatically calculated and displayed taking into account discounts, special offers, and user bonuses.

Time: 120 hours

8. Checkout

Checkout is among the top-priority features of an online bidding marketplace like eBay. Shoppers fill out this page before making an order, providing details such as name, surname, contacts, and a preferred shipping method.

Furthermore, checkout enables customers to verify whether they have correctly completed the necessary fields.

Time: 120 hours

9. Online payments

To reach a larger audience and increase the conversion rate, you should offer a number of payment options. In order to implement this comprehensive e-commerce marketplace functionality, software developers can integrate a payment gateway API, for instance, PayPal, Stripe,, Braintree, or Square.

Serving as an analog of a virtual third-party terminal, a gateway solution allows for verifying customer identity and processing transactions. What’s more, a gateway protects parties against various issues, including insufficient funds on user accounts, expired cards, and fraud.

By using the API, software engineers do not have to build this marketplace app feature from scratch, thereby saving you time and costs. A gateway system also lets you connect numerous payment methods and ensure the support for dozens of currencies.

As an example, Stripe can enable you to incorporate a range of payment options that involve:

  • cards (Visa, Mastercard, Discover, JCB, Diners Club, China UnionPay, and American Express)
  • electronic wallets (Apple Pay, Google Pay)
  • local online payment options (SOFORT, iDeal, eps, Bancontact, Afterpay, and GiroPay)

It is worth noting that trusted gateways are compliant with the Payment Card Industry Data Security Standard (PCI DSS), which requires companies operating with the credit card information to safeguard sensitive data and ensure payment account safety.

In addition, you can incorporate online payment methods such as WebMoney and QIWI.

Time: 120 hours

10. Reviews and ratings

Reviews and ratings are among the main e-commerce marketplace features. By providing this section, you will let consumers express their opinions, so that other buyers can estimate the quality of goods and make better purchasing decisions.

As a result, you, as the owner of an online auction marketplace, will manage to increase customer loyalty and credibility in your services. Having the possibility to analyze user feedback, sellers will benefit from this functionality, too.

Time: 120 hours

11. Notifications

When creating a marketplace app like eBay, it is important to implement notifications to inform vendors and shoppers about new bids and the end of auctions. On top of that, merchants will get the possibility to notify consumers about special offers, discounts, price decreases on favorite goods, and order status. Thanks to this e-commerce marketplace feature, you will be able to attract more users and boost the audience’s satisfaction.

To reduce time to market (TTM) and project costs when delivering this functionality, software engineers can use the API, for instance, Firebase.

Time: 160-200 hours

12. Data analytics

Data analytics is a powerful feature of an online auction marketplace like eBay. Employing a data analytics tool, sellers can monitor key performance indicators that encompass the most viewed products, session duration, bounce rate, the number of users by date, and total sales/revenue earned within a certain period.

With the aim to implement this e-commerce marketplace functionality, software developers can use turnkey applications, thereby improving TTM and cutting expenditures.

At Arateg, our software engineers can integrate your online bidding marketplace with solutions such as Mixpanel, Kissmetrics, Firebase Analytics, Brandwatch, Zoho Pagesense, Sprout Social, and Woopra. Prior to auction marketplace development, we help our clients conduct the audience’s research to choose the tool that will suit their business goals and budget.

Concerning our experience, our team created an e-commerce fashion marketplace recently. As part of the project, we had to set up data analytics that would enable vendors to identify groups of leads with the best conversion rate, discover reasons for churn, make customer segmentation, and track conversion/retention rates. After analyzing company objectives, our software experts decided to connect Mixpanel, since the tool perfectly aligned with existing requirements.

However, in some cases, it is advisable to deliver a custom solution. When building an online cosmetics marketplace, for instance, our task was to provide dynamic data analytics and visualization by numerous metrics.

Aiming to meet client business-specific objectives, we elaborated a comprehensive algorithm that allowed for generating sales reports for any period, collecting data on the number of items sold in every store, and gathering historical data on the number of goods in shops.

Time: 100 hours

13. Order management

Order management is another feature that you should add to an online auction marketplace similar to eBay. Thanks to this, vendors will be able to easily track and process orders without the need to spend time making manual records.

When implementing this e-commerce marketplace functionality, it is crucial to provide order sorting by date, coupon code, shipping method, and payment option. In addition to that, it is advisable to create order templates.

To deliver this complex module, software developers can integrate a bidding marketplace with an API of a turnkey solution, for example, BigCommerce Orders or Salesforce Commerce Cloud. As a result, you will cut expenses and time to market.

Time: 200 hours

14. Inventory management

If you want to know the ins and outs of how to make an online auction marketplace like eBay, it is important to provide merchants with the possibility to manage inventory through the platform. With this functionality, sellers can trace each item arriving at or leaving their warehouses, view inventory history, update prices, as well as monitor stock status. As a consequence, vendors can easily control the availability of goods in stores.

In order to reduce project costs and TTM, it is possible to use an API of a third-party service, for instance, API2Cart, Zoho Inventory API, or eBay Inventory API.

Here at Arateg, our marketplace developers employ a variety of turnkey software. When creating an e-commerce fashion marketplace, for example, our team integrated Fulfil.IO to streamline inventory management and ensure transparency. By using Fulfil.IO, merchants became able to track orders across various channels.

Time: 120 hours

15. Administrator panel

An administrator panel can be considered as a separate app inside an online auction marketplace. Through the admin panel, online marketplace owners can track payments, generate sales reports, add new users to the system, assign data access permissions, manage listings, view auctions and monitor their results.

When building an e-commerce marketplace platform like eBay, you can customize an admin panel to your business-specific needs. For example, it is possible to provide sellers with the possibility to reply to buyer questions and comments.

Time: 2000-2500 hours

How much time does it take to make an auction marketplace?

table, time to make an auction marketplace

How much does it cost to build an auction marketplace like eBay?

Auction marketplace cost depends heavily on the time it takes to deliver a software product and the salaries of IT professionals that vary across different regions. For instance, software engineering firms in Western Europe generally charge $40–$100 per hour while IT companies based in the UK and US typically earn $50–$150. Custom marketplace development companies in other countries, for example, in Georgia, may ask for $20–$50 per hour.

So, the final price of an online auction marketplace like eBay can considerably differ depending on the location of an IT service provider:

  • US, UK — $202,000–$693,000
  • Western Europe — $161,600–$462,000
  • Georgia — $80,800–$231,000 (including Arateg)

So, by outsourcing marketplace development to a trusted IT partner in Georgia or another country with lower hourly rates, you will cut expenditures by 2.5–3x while software quality will not be worse.

If you plan to delegate a marketplace project to our team, read our article to find out how we set up effective communication with clients, achieve process transparency, and ensure data confidentiality.

How does eBay monetize its online auction marketplace?

In order to generate profit, eBay utilizes a combination of marketplace monetization strategies. While consumers can use the eBay e-commerce marketplace for free, vendors are required to pay various commissions:

  • Final value fees. This commission is a percentage of the order amount plus $0.30. Depending on the product category, the percentage varies between 2.35% and 15%.
  • Insertion fees. The majority of merchants can get up to 250 listings without any fees. Once a limited number of free listings is exceeded, sellers generally have to pay $0.35 per listing or $20 for certain business or industrial goods.
  • Classified advertisements. Vendors need to pay for ads and services, for example, listing houses or vehicles.

A marketplace revenue model you choose will largely impact your success and level of income. Therefore, it is among the main aspects you should consider prior to building an online auction marketplace like eBay. To select a monetization practice that will meet your business objectives, read our guide on the topic.

Technology stack to create an online auction marketplace

A technology stack used to make an e-commerce marketplace with bidding functionality is among the key pillars of success. By employing certain software technologies, it is possible to address various needs, for instance, automate e-commerce marketplace development.

Furthermore, software engineers can ensure scalability, high availability, and performance while simplifying infrastructure maintenance. Additionally, software experts can utilize out-of-the-box solutions to achieve the security of sensitive data and protect against distributed denial-of-service attacks.

To create an online auction marketplace like eBay, our team can use 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, Express.js, RabbitMQ, Memcached, Redis, Firebase Cloud Messaging
  • Databases: PostgreSQL, Amazon DynamoDB
  • DevOps: Amazon Web Services, Docker, Kubernetes

In order to reduce the feature release cycle, software developers can integrate an online bidding marketplace with a number of APIs:

  • Sing in/up: Gmail, Facebook, LinkedIn, Twitter
  • Notifications: Firebase
  • Payment gateways: Stripe, PayPal, Braintree, Square
  • Order management: BigCommerce Orders, Salesforce Commerce Cloud
  • Inventory management: Fulfil.IO, API2Cart, Zoho Inventory API, eBay Inventory API
  • Feedback and comments: Disqus
  • Data analytics: Mixpanel, Kissmetrics, Brandwatch, Sprout Social, Woopra

As programmers will not have to implement this comprehensive functionality from scratch, you will shorten TTM while preserving end-software quality. Take a look at the list of third-party API integrations that we can use when building an e-commerce marketplace.

Final thoughts

Building an e-commerce marketplace with auction functionality is a complex process that requires taking into account multiple aspects, for example, a monetization strategy and technology stack. Prior to bidding marketplace development, it is essential to conduct competitor analysis and research the audience’s expectations.

Thanks to this, you will manage to discover how to meet end-user needs and make an online auction marketplace that stands out from the crowd. Coming up with a unique selling proposition, you will faster attract users and start generating revenue.

In order to receive the highest solution quality while saving costs, it is essential to partner with a trusted provider of marketplace development services.

Headquartered in Tbilisi, Georgia, Arateg delivers marketplace apps to sectors such as e-commerce, healthcare, e-learning, hospitality, NFT, real estate, and human resource management. Established in 2014, our company assists clients in prioritizing features, choosing software technologies, and outlining a product implementation roadmap. By now, we have created more than 20 marketplace platforms. To learn more, check out our portfolio.

If you want to build an online auction marketplace like eBay, you are welcome to contact our team. We will get back to you within 1 business day and help address all issues. Project consultation is for free.

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