How much does it cost to start marketplace business? At the very beginning each and every entrepreneur asks about the price issues. How much money do you need and how long will it take for an online marketplace business to become a profitable one?
You should take in mind that different industres and businesses required different amont of finantial resources to be invested in it. Therefore it is impossible to define the specific amount of money that you need to invest. In that regard, marketplace business is unpredictable.
To begin with, you do not need to complicate functionality and chase large competitors. You need to work with small providers first, and then steadily grow. Most likely, your income in the first year will be quite small or even might be zero. The main thing is to be able to confirm the business idea. If there are income and resources, then your business will go faster, if not - you need to be ready to lose the initial investment.
Also read our article: 10 Best and Simple tips of building B2B Marketplace step-by-step.
Always try to calculate money for expenses and required time. In case you have a lot of money to spend, then you can spend less time and vice versa. For example, if you aspire to full-time income for founders and others with a small amount of money and a lot of time, in this case, you will need:
Money: $165 * 12 months, it’s about two thousand dollars;
Time: twenty work-hours per week, it’s about 1000 hours in total.
Two things: getting the word out and building the platform. In addition to these two, you will have to face spending on a lawyer, accountant, etc. Take into account that the price will depend on your country.
First of all, work on a freelance basis and be sure that your business is really starting to thrive. You have to spend money on something that can take a lot of time. So when choosing between the cost of teaching programming or building a marketplace software framework from scratch - choose the second one.
1) Building the platform
Even if you are a good programmer, developing a marketplace platform might be quite tricky. You'd better start checking your business as early as possible, so use ready-made platforms.
For example, the SaaS platform (Software-as-a-Service platform) will be your best choice. Since it allows you to create a website quickly and easily (even if you do not have your own server). The main thing: the platform should approach your requirements connected with a minimum viable platform. For example, using Sharetribe Pro per one year with all the necessary additions will cost you approximately $1740.
Also read our article: SAAS Website development: 6 Top mistakes (How to fix them!)
2) Spend money is marketing
Use WordPress to create your own blog (it will cost you about $36), MailChimp for the mailing list service, Launchrock for landing page and spend some extra money on Google Ads.
Time investment in successful marketplaces
Focus on the most important things for you and strive for quality, not quantity. In the first year, dial the main audience and confirm the idea. The main thing - patience. Moreover, for most successful markets one year is not enough to confirm the success of the business.
In the first months, try to assess the Interest of the audience, create a minimum viable platform with the assistance of Sharetribe. Supply everything with a company logo, blosteadelyg, domain and work with various social networks. Invite new customers, get feedback, etc.
Also read our article: Main Features of eCommerce Marketplace in Development App like Wish.
And if you started to notice that transactions occur constantly, you have accumulated a group of regular users and the market is gradually starting to work by itself, then you are moving in the right direction.
This article was a brief reminder to you about the most relevant issues as a cost of developing the marketplace app. You should take in mind that at the beginning, the projec might bring a small revenue, however, depending on your strategy the project will bring a sustainble revenue at the end. In order to create a profitable business you should use your finances and time very carefully.
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