In this era of technology, online marketplaces have increased their horizons and are a rage among individuals and businesses nowadays. According to recent studies, 58% of online retail sales came from marketplaces in the last couple of years. Therefore, with the online market growing, it is important to understand the concept of an online marketplace and Building A Marketplace before starting a business. Hence this article highlights the key features of a peer-to-peer marketplace.
What is a Peer -to -Peer Marketplace?
People often confuse a peer-to-peer marketplace with an online store since it falls under the e-commerce sector. However, in the case of an e-commerce platform, it is managed by a single vendor, and your website owner manages the whole selling process. Hence, although the users can purchase products, they can’t register themselves as vendors.
On the contrary, certain functionalities in an online marketplace are not present on any e-commerce website. As a result, some e-commerce platforms like Opencart, Shopify, etc., although excellent platforms for developing online stores are not suitable for Building A Marketplace online.
The best feature for a peer-to-peer marketplace is that everyone can become a vendor, be it an artist, bookseller, or mechanic. It is just a matter of simple registration forms, creating a product listing, and uploading the products for sale. Here vendors can seamlessly become buyers and vice versa.
Advantages of P2P Marketplaces
There are certain benefits of a Peer To Peer Marketplace Platform that are absent in e-commerce websites.
- There is a high-profit margin for vendors, but consumers also enjoy cost-efficiency. The P2P marketplaces remove any mediators between the end buyers and vendors. As a result, commission costs don’t exist, and the full earning is delivered to the marketplace owner. This range varies from 5 % to 20%, depending on the products. In the end, these fees become insignificant when compared to the overall value a P2P marketplace provides to the buyers and the vendors.
- This marketplace has made buying and selling much faster and convenient. The users get a look at different kinds of products accumulated in one place. Now they can easily scroll between thousands of choices within a short period from any place. For the vendors, the P2P marketplaces cut the cost of renting a physical store and relevant expenses. An artist can now easily upload their products online and wait for buyers without any hassle.
Therefore, compared to B2B, the P2P marketplace can easily connect individual vendors with the consumers. Even if vendors are not sure about a product’s price, they can take help from recommended prices offered by the embedded software.
Services offered by P2P Marketplaces
Peer-to-peer marketplaces generally provide services that can be categorized into four different sectors.
- Product Selling
In this category, vendors display their products through listings and allow buyers to purchase them virtually through a fee. It is one of the most popular peer-to-peer marketplaces since a person can sell the most bizarre product with minimum effort.
- Offering skills and services
There are certain portals like TaskRabbit and Helpware that help people to search for the desired skills easily. Some of these websites also schedule interviews and look at candidates’ skills before granting them access to their platform.
- Property rental
This P2P marketplace is very helpful and easy to use since thousands of properties are accumulated in a single place. In this case, the platform owners charge fees for every transaction taking place and some more fees from the renters. There are many Rental Marketplace Software with very good features available.
- Loans and money
Investment in loans for getting funding is another category of a P2P marketplace. Some of the most famous examples are GoFundMe and Kickstarter. However, there is a major difference between these two portals. While GoFundMe is a fund-raising platform for treatment, education, startups to get funding, Kickstarter particularly caters to entrepreneurs and other creative people such as musicians and artists.
How P2P Marketplaces Earn Money
1. Getting commission is the major and most popular business model of a Peer To Peer Marketplace Platform. Whenever any transaction is made on a platform, some of its percentages are termed as commission, and it depends on the cost of the service or product.
If a person wishes to have a similar dependency for their services, it is important to make the system transparent for both customers and vendors. Additionally, operating on platforms that allow customers to leave, it is important to have a conversation with them and enable transactions as a vendor. Vendors can do this by providing advanced security, dependable software and preventing users from exchanging their personal details.
2. The second model of earning for a peer-to-peer marketplace is subscription-based. Here, vendors offer various membership plans to the users based on the value proposition. A good example is CrateJoy, offering gift boxes with products of various price ranges based on the price bracket.
3. Receiving payments from listed services is another model of P2P marketplace earning. It is one of the most transparent models that enhances the quality of published services. This is because sellers have to pay for posting items, and hence they will review doing that and be more flexible with the customer’s requirements.
Cost of a Peer-To-Peer Marketplace
Costings of a P2P marketplace depends on the development selected. The cost of off-the-shelf software will always be less than building the front-end and back-end from scratch. An effective way to calculate this cost development is by multiplying the total hours spent with the rate of every specialist hired. With proper arrangements, the development of the core features can get over within 30 days.
However, the development cost is not everything as other aspects like UI/UX design and wireframing, software testing, and quality assurance are also involved. Moreover, the rate of development varies from country to country, the selected technology stack, and specialists’ experience. To be more specific, the ideal team size for a medium-scaled project is six with a UI/UX designer, Project Manager, DevOps, front-end and back-end developer, and a QA engineer.
Therefore, this is some information about P2P marketplaces. A multi-vendor marketplace like P2P is more complex than an e-commerce platform. Therefore, the amount of effort and time needed to build such a platform is also high unless professionals are involved. Hence, IdyaFlow has the perfect team to assist clients and is very proficient in building any Rental Marketplace Software.