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Peer-to-Peer Marketplace: Shared Economy in Action or How to Build Online Marketplace Platform

Maksym Petryshak
Engagement Manager

Peer-to-peer marketplaces are now at the peak of popularity, but it can be complicated to understand how to create strong platforms similar to giants like eBay and Amazon.

We offer you two basic options you can use in order to build a peer-to-peer online marketplace. You can either develop your marketplace from scratch or consider building a marketplace with services tailored for marketplace creation.

The Idea Behind P2P Online Marketplace

The peer-to-peer marketplace is an e-commerce model with some specific features that differ from traditional business models. The main difference lays in the roles of buyers and sellers. The traditional model is composed of two distinct groups, buyers, and sellers. They interact with one another, and their roles are precisely defined. In the peer-to-peer marketplace model, there is no solid line between the two roles, buyers can act like sellers and vice versa.

An online marketplace is very similar to the regular market, where people sell to others. Online marketplaces serve as a gathering ground for sellers. Every seller has its own counter, where they offer their own services and goods. Here one can book, buy or lend property to other people for some time. In the beginning, the idea behind an online marketplace was to create a place where people can exchange or share goods and services, but now it is also a place where you can earn some money.

Peer-to-Peer Marketplace vs. Online-Store

The model for an online marketplace can remind you of an online shop. To some extent it is true, but there is one distinctive feature – the number of sellers. An online shop is a place where one seller offers its goods, while a marketplace unites an unlimited number of sellers who can offer both similar and different goods. In other words, a marketplace is a place where a few online stores reside. Such a model brings additional benefits to buyers. The greater the number of sellers means the wider and varied choices of goods and services for buyers. It allows users to buy necessary things at better price and quality.

How to build a P2P online marketplace

peer-to-peer marketplace

The process of establishing a marketplace is complex and requires a lot of work and effort. The topic is very broad and in order to highlight all nuances, we should write a book, no less. That is why in this article we would like to elaborate only on possible directions you should take in order to get a ready product.

Before we start, please note, there is no universal way that will work for every marketplace idea. Your choice should be based on various factors. Your perfect match will depend on time, money, resources you own. However, the crucial factor will be on the specific requirements of your project. First of all, you have to decide whether users will be selling goods and services directly through the site, or it will be just a meeting point for sellers and buyers.

  • Building Commercial Online Marketplace (Online Peer-to-peer Commerce)

Online commerce implies that buyers will have an opportunity to buy or book products or services instantly through the site. Generally speaking, cooperation between users takes place online and only product delivery is offline. However, it is not always the case. If you sell tickets or certificates, the delivery is online as well. Services like Amazon and Etsy work in this principle.

How it works. Buyers come to the marketplace platform, choose a product or service they’re interested in, enter delivery data, make a payment and get confirmation of the purchase. In order to provide quick selling, you must integrate a payment system in your platform. Payment is where the main problem with online commerce arises. Here you have two possible ways to go, either build it from scratch or use the ready platform for marketplace creation.

Code from Scratch

If you have time and money, go with custom software development. It will allow you to get a solution with outstanding design and unique functionality. Airbnb is a good example of a custom marketplace coded from scratch. This way requires much effort and time. Usually, startups don’t have the time and resources to start with custom development. In this case, a possible solution could be to use a ready platform for establishing an online marketplace in the shortest terms possible. We will touch on it later on.

peer to peer marketplace

Nevertheless, if you decide to move in the direction of custom software development, we recommend starting with MVP, as any idea in this world stays fresh for a long time. MVP will allow you to launch a platform quickly and continue improving the site during its operation.

Theoretically, with custom development, you can build your own payment gateway to integrate it into a platform. It is difficult, yet still possible. But, note that this approach is costly. Building a custom payment gateway will cost you nearly $150.000.

For example, Amazon has its own payment gateway that gives users the option to pay with their Amazon accounts on external merchant websites.

peer to peer marketplace

However, who wants to rack the brains creating a new payment system when you can use an existing one. Nowadays, there is a big amount of payment gateways, and its integration is quick and painless. You can use some popular systems like PayPal, Stripe, PayTabs, Authorize.net. They have great functionality and allow you to perform any types of financial transaction.

peer to peer marketplace

Create Using a Ready Platform

In case you don’t have money or time to start development, companies have taken care of you by creating a ready-made solution. You simply have to implement your idea using a platform tailored for creating online marketplaces. With such an approach, you have more directions to take. The first option is to use e-commerce platforms, aimed at creating online shops – Magento, Drupal, OpenCart, Spree Commerce, and others will allow you to build a platform with integrated payments. But you’d say that an online shop is not a marketplace, it is true, we already figured it out.

Those services act like only the shell, the tool that manages the financial transaction side. All other functionality we get is by using specific plugins and extensions. This way is very similar to the coding approach we discussed earlier. The difference is that you don’t have to code the rest, just upload the necessary parts. An online marketplace made with such tools obviously will lack uniqueness, but it’s cheap and fast. Diakart is a platform for healthcare services in Bengaluru, where users can book healthcare services online. The platform is an example of a platform made with the use of Magento’s e-commerce platform.

  • Building an O2O Platform

The platform where buyers and sellers meet is called an O2O (online to offline) platform, as the marketplace attracts users online, but the payment and services are offline. For example, a client chooses the product online, but pick it up at the store. Also, a few other good examples of O2O services are Blablacar  – a shared car ride platform and Ukrainian marketplace – Shafa, where people all over the country sell cloth they don’t wear.

Here you have two options for how to create an O2O marketplace. You can either code it from scratch or use WordPress with themes and plugins with marketplace functionality. Obviously, that type of platform is easier to create because you don’t have to integrate a payment gateway. The main disadvantage of this marketplace is how to earn money. If transactions take place offline, you as the middleman between sellers and buyers don’t receive any money from the deal. Like as in online commerce. However, this problem can be solved, for example, if you offer some space on your platform for advertising.

Open-Source Marketplace Platform

Developing a peer-to-peer marketplace with platforms like Sharetribe and Cocorico will be simple because those platforms were tailored for building marketplaces.

Sharetribe is the most popular service. It provides all marketplace functionality for startups, individuals and developers. Not too long ago the service was free, but now it charges a fee for usage. Shiretribe is an open-source platform, meaning it is flexible for a code change. You can customize it for your needs. Please, note it runs on Ruby and Rales and if you want to choose another programming language for your platform, think about integration beforehand. To have an understanding of how the platform was made on Sharetribe will look like, take a look at the surfing service, QUIVER.

peer to peer marketplace

Cocorico is a similar service to Sharetribe, but it is better suited for building service-based marketplaces. With Cocorico, you get more advanced features than with other professional marketplaces. Cocorico is written in PHP (Symfony) language. Here is an example of a marketplace made with Cocorino, BLISSYOU it’s a service that enables to set an appointment with experts in fresh and natural medicine.

WordPress

I bet you didn’t know that WordPress is suitable for online marketplace creation. Usually, WordPress is perceived as a platform for creating blogs. But, it turns out WordPress is more functional than most of us belive. Here you can run every type of site, from a personal blog to a peer-to-peer marketplace. When it comes to WordPress, the main thing that it actually means is finding and configuring the right set of tools. This is the case with building a WordPress marketplace too. To build an online marketplace, you would need an e-commerce plugin solution and a theme that supports marketplace functionality. An e-commerce plugin must work for multi-users because marketplace platforms are different from online-shop by the number of sellers and vendors in general. Take a look at the marketplace that runs on WordPress.

How to make peer-to-peer marketplace website?

Which option would be best for building your peer-to-peer marketplace? There is no specific correct answer to this question. Your choice will be based only on your needs and opportunities. If you want to create an online store, use a service like Magento. If you are thinking about creating something such as Blablacar, maybe you’d better consider a custom development.

Alternately, you can choose a service tailored for marketplace creation (SaaS solution) to spend the least time and effort on developing your project.

 

Peer-to-Peer Marketplace: Shared Economy in Action or How to Build Online Marketplace Platform
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