Marketplace business. How much does it cost to start? Each marketplace entrepreneur – beginner thought about the issue of price. How much money do you need and how long does it take for an online marketplace business to become enough viable?
No one can give an exact answer since different amounts of investments are needed for different types of industry. Marketplace business is unpredictable.
To begin with, you do not need to complicate functionality and chase large competitors. Conversely, you need to work with small providers first, and let your customers compare them.
Most likely, your income in the first year will be zero, so do not rely on future revenue. 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 necessary time. Although if you have a lot of money to spend, then you can spend less time and vice versa. If you aspire to full-time income for founders and others, and if you have 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. Of course, 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 is not the best time investment. 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, blog, domain and work with various social networks. Invite new customers, get feedback, etc.
Also read our article: Main features of e-commerce 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.