We’ve built our fair share of marketplaces—platforms connecting buyers and sellers—and have identified key takeaways. We’re big believers in paying it forward because we had a lot of help along the way. That’s why we’re excited to share what we’ve learned, so you can go from 0 -> 1 faster than we did. Whether you’re designing a new marketplace or refining an existing one, strategize the following to build a better, more resilient marketplace:
1. The Classic Chicken or the Egg Problem
If you’re unfamiliar with this problem, it’s the question of which came first? Every marketplace, including Amazon, must answer: Do you start with the buyer side or the seller side? There’s no universal answer because, unfortunately, it always depends.
Here’s one approach we’ve used: start with the side that has the strongest demand. If buyers need sellers now, then prioritize building a large supply of sellers first. The more sellers you have, the more valuable the platform becomes to buyers, which means the more likely they’ll spend on your platform.
But the reverse can be true. If sellers need a pipeline of buyers to stay engaged, focus on generating the buyer supply early.
Other factors to consider:
- Supply and demand equilibrium: it’s rarely a 50-50 split.
- User behavior patterns: buyers and sellers have different habits – leverage them.
- Market maturity: is your industry ready to embrace your marketplace?
- Purchasing power: which personas and buyer/seller side generate the most money.
- Early adopters: for new marketplaces, going after anyone else would put you at risk for failure.
- Niche opportunities: is there an Amazon of your market or is it already fragmented?
There’s no easy answer to this classic problem because without either, you can’t generate revenue. You have to test, iterate, and refine with the above in mind to find the right balance between buyers and sellers.
Need help answering this question? We can help! Contact us to workshop this out with your team.
2. Understand Your Take Rate (And Why It’s So Important)
Another question you’ll face with a marketplace is your service fee or take rate, the percentage your platform charges on each transaction. If your take rate is 20%, and someone spends $100 on your platform, you make $20.
The math is simple. But the impact? Huge.
Even a small percentage change can drastically influence whether people choose your platform or go elsewhere. A high take rate can easily deter buyers and sellers from joining, while a low one may put you out of business. It’s a delicate balance that you won’t fully understand until your app is in users’ hands and you start to understand the true operating costs of your marketplace.
To get a better grasp of take rate, we suggest modeling different take rate scenarios and pressure-testing them with data. Oftentimes, marketplaces make money elsewhere to offset lower take rates. For your marketplace, you might explore other revenue streams, such as:
- Subscription models
- In-platform credits
- Premium listing options
- Advertisements
- Gamification
- Personalization
Just make sure your primary revenue stream is clear—and viable. If you’re not thinking about your take rate now, it’s time to start!
3. Build in Stickiness
Great marketplace apps aren’t just functional—they’re addictive.
What makes users come back to your app again and again? That’s your stickiness factor.
We’ve seen gamification work in some verticals, but it’s overused and is not always the answer. In fact, the most effective approach is often the simplest: understand what your users value most, and double down on it.
Stickiness can be fueled by:
- A unique process designed for buyers and sellers
- Push notifications
- Loyalty rewards
- In-app messaging
- Personalized content
- Saved preferences and reordering features
User retention is a critical part of app development and a lot of the time, it’s “out of sight, out of mind” for your end-users. Without it, even the most beautifully designed marketplace will struggle and face high churn rates.
4. Design with Intent (Not Just Style)
Let’s talk about app design.
“Modern” design doesn’t always mean slick interfaces and minimal layouts. For example, we found that Asian markets prefer information-dense screens over minimal white space. Western audiences often expect cleaner, more focused interfaces.
The takeaway? Know your audience before you write a single line of code.
Design preferences are deeply cultural. If your app doesn’t feel intuitive to your users, it won’t matter how polished it looks. Spend time researching user behavior and design your marketplace around that, especially during the discovery phase of app development. For help with localizing your app, explore our Local IQ™ service or connect with our team today.
5. Avoid Over-Designing and Solve the Root Problem
There’s a big difference between modern design and over-design.
We’ve seen this mistake time and time again: founders and teams try to pack every feature imaginable into the first version of their marketplace. The result? Confusion. Performance issues. Frustration from users who just want you to fix their problems. And overspending.
The best apps do one thing well—solve some root problem. So before you add that new filter or calendar integration, ask yourself, will it support solving the primary problem of your buyers and sellers? If not, put it in the backlog or toss it out.
That’s common sense app development.
6. Test. Learn. Refine.
Here’s the truth, building a successful marketplace app takes time, iteration, and a lot of humility.
We’ve been through it with our partners. We’ve tested pricing models, experimented with designs, and scaled user growth. And we learned and we’re still learning—with every app we develop and every client we partner with.
Whether you’re building your first marketplace or trying to refine an existing one, treat your app development as an ongoing learning journey.
The Bottom Line
Building a successful marketplace app is one of the toughest challenges in the app development world. It’s not just about writing great code or designing beautiful interfaces, it’s about solving real problems and making it easy for buyers and sellers to transact.
Here’s what to keep in mind when building your marketplace:
- Understand which side of your marketplace to prioritize first.
- Deeply understand your take rate and test it with real users.
- Build stickiness into your app with intentional user experience.
- Design for your audience, not just for style.
- Keep it simple. Focus on the core problem before expanding.
You don’t need to know everything so long as you keep moving forward, learning, and improving.
At Uplancer, we help businesses do exactly that. If you’re ready to turn your marketplace idea into a real product, get in touch with us. We’d love to help.
