What are the most significant technical challenges in marketplace development and how to deal with them?
The popularity of online marketplaces is impressive. Marketplaces are what users have been craving for ages: convenient place to purchase products and services with clear regulations and all guarantees. However, building an online marketplace can be a daunting task, especially if you don’t have a technical background but what you do have is a brilliant idea. A team of experienced developers is going to be crucial: they suggest the technical stack that suits your vision and estimate the project (both as a whole and every individual part of it).
When it comes to the development process itself, the most common bugs usually involve security gaps and payment glitches. Let’s take a closer look at what are the 4 main problems founders face while building a marketplace and how to solve them.
Problem No. 1 – Lack of technical background of a founder (who might be you)
Contrary to popular belief, this problem occurs very often; Clients who contact BinarApps usually don’t have extensive IT knowledge. Fortunately, that doesn’t stop them from making their vision a reality. The most important part for a founder is to have an idea that solves an issue many people have – technical knowledge can take the backseat when BinarApps’ specialist takes on the function of CTO.
How to solve the problem? Share your vision with the team as soon as possible. At BinarApps, we offer a series of workshops at BA Studio. They’re meant to go into detail and analyze your idea, define goals, and prepare a prototype. Above all, it shows you how we work and allows you to get into the process of development organically. That doesn’t mean the Studio is the only part of conversations: we talk during every stage of the development. Some of us used to be in your place so we understand how important it is to stay informed.
Problem No. 2 – Security
Of all the biggest technical problems, this one is definitely the most important. Most online marketplaces have experienced a safety-related disaster. Even industry leaders cannot be considered 100% secure. Many online businesses suffer from identity fraud, as well as harmful malicious content. Also, data leakage happens often and it’s hard to regain customers’ trust after that happens. Thus, providing extra safety can be a great competitive advantage for your online marketplace.
How to solve this problem? In order for both sellers and buyers to feel safe, consider:
- Up-front inspection – you need to find a way to inspect and verify all the products and services.
- Validation of identity of all people involved identity – you need to thoroughly check all parties involved.
- Privacy data – always the highest priority.
- Build and maintain a secure network, as well as safety systems. Regularly monitor and test all networks.
- Improve authentication methods – search for some extra guarantees and consider the 2-factor authentication (a traditional user ID and password are not enough anymore).
Problem No. 3 – Efficient search
Your marketplace will gather thousands (hopefully) of sellers and buyers. Thus, your developers have to build an online marketplace that will enable both sides to find each other as easily as possible. This is one of the problems developers work on for months.
How to solve it? There are two approaches:
- Centralized – you narrow the options for sellers and buyers in order to ensure efficiency. This solution mostly works for on-demand products and services (like e.g. delivery services or taxi services) which customers want to handle as quickly and easily as possible. In order to make the most out of a centralized approach, you can use geolocation (like Uber offering a taxi based on your location) or zip codes (like Zeek).
- Decentralized – this approach makes users decide themselves on the most important search criteria. This solution should be supported by various filters and handy search tools. If your marketplace is to be offering many heterogeneous products and services, this is a solution you should talk with your developers about. It fits accommodation services, platforms for travelers, etc. Decentralized searching may involve filters, personalization, recommendation engines, etc.
That’s one of the decisions we help you make during workshops at BA Studio.
Problem No. 4 – Payments
For some marketplace owners, this is actually a number-one technical issue. Payment methods and the way transactions proceed are the ways how money flows into your account after all. While coding an online marketplace, developers often face an issue of processing reduction, payment delays, and lost transactions. These three technological disasters usually occur when cross-border transactions are made – an online marketplace is a platform with no borders, at least in theory, so it would be perfect to provide users with a chance to use/buy the offered products and services, no matter their location.
How to solve this issue? If you want to keep developing and stay competitive in the market, your customers should be able to pay in their native currencies. In the age of technology, the US dollar, British pound and euro are not enough. There should also be various payment methods available. Your marketplace should be as flexible as possible. Mobile payments, credit and debit cards, e-wallets – these are a standard now. Make sure your payout process is clear and easy. Users should be able to retrieve their money from the marketplace smoothly. All payments should be split correctly.
We at BinarApps prefer to use Stripe as our testing platform because it offers great support and it’s integrated with local partners. We’re able to run detailed tests before the start of your marketplace so you’ll have the guarantee that the money flow is flawless.
Don’t be afraid to ask more questions
A successful online marketplace should be safe and easy to follow for users. This is why key technological issues developers most often face are payment and safety issues and search problems. Also, some misunderstandings between the development team and the owner of the marketplace can arise. However, all these issues can be solved through communication, transparency, and shared vision between you and your team of developers. Let’s talk!