Peer to Peer Marketplace – All You Need to Know
The software development industry is dynamically changing and improving. The frontend development
Peer-to-peer marketplaces gain more popularity among customers and sellers. Why has this business model gained some much attention? How does a P2P marketplace work? How to plan a marketplace development from scratch?
In this article, we will explain to you the phenomenon of P2P marketplaces and guide you on software development for your organization.
What is a peer to peer marketplace?
Before we start to describe the development process, we want to make sure the definition of a P2P marketplace is more than clear to you.
A peer-to-peer eCommerce marketplace is a popular option in marketplace software development. It is a platform where people who need products or services can easily connect with those who provide them. Additionally, the system detracts the difference between customers and sellers so that you can be both. Some examples of the most popular and successful P2P marketplaces are Airbnb, Uber, or Etsy.
What is a peer-to-peer website? How does it differ from the P2P marketplace?
The marketplace falls under an eCommerce category; no wonder then why it’s so often confused with online website stores. There is a difference between them, and let us explain it to you.
While an eCommerce platform is operated by a single seller, and only people who own the website can decide what to sell, a peer-to-peer marketplace provides functionalities to enable both vendors and buyers to use the platform. Moreover, they can exchange their roles. Those two functions are easy to achieve and manage. P2P marketplaces are more like a market where you can go and view different products or services from various sellers, and if at some point you need to sell something, you get to become a vendor too.
Peer-to-peer marketplaces make you more visible. You can reach more customers, and buyers will come to you without working strongly on promotion. People come to a P2P platform ready to buy. Also, you can join a marketplace like this without spending a lot of money on website development; hence you manage your business in a very cost-effective and efficient way.
How do you make a P2P marketplace?
If you are a business owner who wants to create a peer-to-peer marketplace, you probably thought about starting by building a website. And you are right. Developing a P2P marketplace on an already existing website will be speedier and much more cost-effective than building everything from scratch. Thus, if you decide to go that way, you will save money, get your platform ready in no time, and add value to your business by providing an app too.
Have your P2P marketplace idea
Nothing can ever be done without having an idea first. It might seem a cliche to you, but going for more brainstorming and some solid research won’t hurt.
If you are reading this guide, you probably already have some ideas for your P2P marketplace. Now, you can try to validate them by running market research. Check what your competition is, what features and functionalities they provide. Does their platform have a single app for sellers and buyers, or did they separate them? There are several questions you can ask yourself, and the more you answer, the better. If you conclude that your project is robust and has the potential to excel in the market, you can move on to the next step.
However, if you find yourself in a hard place where your head is out of ideas, observe your competition to inspire yourself. You can look at your friends and family and see what they struggle with daily, and maybe you can find some great ideas there.
Now, it’s time to map your first business model. The P2P you are going to develop can be an eCommerce website or a service platform. Users will use it to rent, sell, buy, and loan products or services. You can run your business for a B2C or a B2B audience.
Do not forget to focus on your P2P revenue standard. There are a few options for a pricing strategy, for example, commissions, fees, or their combination. Most marketplaces such as Airbnb or Etsy implement commissioning; thus, they get a part of the purchase value, as well as some kind of fee. In this case, payment fees and fixed fees.
If you plan to build a P2P marketplace that focuses on loans rather than selling, then a good option would be to use membership fees as an alternative.
Plan the marketplace development
We reached the most important question. How to plan the P2P marketplace development? There are a few options.
You can create a marketplace from the ground up. This solution will provide you with a platform perfectly tailored to your needs. You do everything from scratch, so you can create every part of the system as you wish. However, this solution is costly and time-consuming. If you want to build a platform quickly and have limited resources, we strongly recommend choosing a different option.
Another choice is to use a ready-made software platform. This solution will cut costs and minimize the time of P2P marketplace development. However, there might be some limitations. This option is good if you already have an online store and you want to extend it into the marketplace. Otherwise, there are better alternatives.
Develop a P2P platform on top of SaaS Software. It’s the fastest and the most cost-effective way to provide all the basic features you need in your marketplace.
One more option that we want to tell you about is API-based marketplace software. This choice combines great customization functionalities with no-cost management. You get to design your own feature set and plan while advancing the development process.
In any case, if you feel like you need some support in creating your app, there are great developer teams who can help you build a robust system. In BinarApps, we offer you plenty of options, and every project we complete is customized according to your specific needs. We will advise you on every matter and design the best product possible. Thus, do not hesitate to contact us and estimate your project.
Functionalities to add to your P2P marketplace
Peer-to-peer marketplaces require to include some must-have features, and at least a part of them should be distinct from other eCommerce businesses. Here are some examples of the most common features for P2P marketplaces.
You need to include a profile page that displays the user name, profile picture, the number of orders completed, the average rating, opinions, and contact information.
Profiles are an essential part of building trust between buyers and sellers. You can add an option to verify phone numbers and identities, which can or can’t be shared with others.
That functionality will differ depending on whether it’s a customer or a vendor profile.
Customers should be able to display search functionality, filters, categories, products and their details, and an option to add something to a wishlist or the cart.
Vendors should be able to view their own products and have an option to remove them, edit details and descriptions, alter prices, and publish or unpublish items. If sellers have many products, they also should have a search engine feature with filters and categories.
Remember, the more complex a listing page is, the more clients will trust in the product or service reliability.
Search and navigation
To ensure buyers can find what they are looking for, you need to add navigation functionality to your P2P marketplace. Usually, customers go for a particular product or the entire category. Thus, your navigation should offer an option to search for products with various keywords, filters, and categories.
Even if the niche of your marketplace is low, your products and services still have variations, for example, different colours or multiple providers with various pricing. Therefore, search and navigation features are a must.
If you want to build more trust in your platform, creating a frictionless payment experience is one of the best ways to do so. Your own payment system will open new possibilities, such as delaying payments and holding funds in escrow until a service has been completed.
Depending on your country, the payment system regulations can differ significantly. Every country has its own legalisation rules; however, P2P marketplace developers can offer in-build payment processing. That’s a good way to save the time of building a payment system from the ground up and avoid maintaining and updating it to comply with the regulations.
Integrate a payment gateway that’s secure and reliable, and make sure money transfers are quick and effortless so that vendors can ship orders as soon as possible.
Reviews and ratings
Reviews are an essential part of every business, so you shouldn’t neglect this functionality while planning your P2P platform development.
It’s one of the best ways to build trust between users, especially in a peer-to-peer business model. Imagine that you are a customer who is looking for a good product or a service. Probably the first thing you do after finding an item that you like is checking the reviews. If they are not there, you might just give up the purchase and look for the product in another source.
Additionally, reviews are useful for sellers too. For example, in the Airbnb service, both hosts and guests are able to view each other reviews and rate each other. That helps both parties. Hosts know better who they let in their apartments, and guests know what to expect within their accommodation.
It is essential to include this functionality in your P2P platform to provide a comfortable and reliable user experience for all users.
This functionality is helpful in case of timely order completion. Sellers get to know when an order appears, and buyers can get notifications when tracking their product shipment is available or when the price has dropped.
Additionally, notifications will be helpful in the case of direct messages and other methods of communication.
Customers and vendors must have an option to communicate on a P2P platform. Build-in messaging service allows buyers and providers to avoid disputes and communicate quickly if any issues arise with an order.
Not every product is always shipped from next door. Sometimes, products are being sent overseas, and it can take long weeks. Order tracking is useful functionality for both the seller and buyer so that both parties can monitor the process. Users will feel calmer knowing where their order is and when they can expect the delivery.
Peer-to-peer marketplace management requires appropriate tools to be successful. As a marketplace administrator, you have to monitor and manage it on a daily basis. If you want to be able to moderate customers’ content such as profiles, listings, control user access, and watch transaction process, then there are some admin features that can help you achieve that.
With powerful admin tools, you will provide a smoothly working service for your customers and improve it constantly.
Building a P2P marketplace might not always be easy, but as it is the next big step in your business development, it is worth the effort. The peer-to-peer business model gains more popularity and no wonder why. P2P platforms are more complex than standard e-Commerce stores; they can offer much more possibilities and are a strong pillar of the IT sales industry.
If you are thinking about building your P2P platform in BinarApps, we will help you validate your idea and go through all the development processes. Move your business to the next level today, saving money and time.