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How Much Does it Cost to Build an Online Marketplace?

Author: Ievgen Cherkashyn
by Ievgen Cherkashyn
Posted: Nov 04, 2016
online marketplace

The sharing economy has been growing rapidly, leading many people to consider starting their own online marketplace. Web-based marketplaces can help people share goods, services, accommodations, and relevant information.

If you want to develop your own online marketplace, you first need to know roughly how much a marketplace will cost.

There are essentially two options for developing a marketplace. You can develop on a platform, such as Sharetribe (built with the Ruby on Rails framework), that offers certain ready-made solutions. Using Sharetribe or a similar platform is the fastest and cheapest way to develop a marketplace.

The second option is to build a marketplace from scratch. Although this option demands more time and money, a bespoke marketplace can be customized to meet your specific needs better than a platform such as Sharetribe.

We can help you decide which option is right for you during the requirements elicitation stage.

From the technical point of view, creating an online marketplace is easy for us for a few reasons:

  • We have experience building marketplaces
  • We have our own libraries that we use in marketplace projects
  • We use Sharetribe, which is a great open source solution that speeds up marketplace development

We’re going to provide you with two estimates: the cost of building a web marketplace from scratch and the cost of building a web marketplace using Sharetribe.

Technology Stack for Building a Marketplace

The technology stack we use to build marketplaces varies depending on a marketplace’s specifications. But we typically use the technologies listed below:

  • Sharetribe
  • HAML
  • Sass
  • CoffeeScript
  • Ruby
  • Ruby on Rails
  • RSpec
  • Capybara
  • PostgreSQL

Keep in mind that we listed only core frameworks and preprocessors, and the stack usually includes more technologies. The technology stack may also change should we consider other frontend frameworks.

How We Estimate a Marketplace Project

According to Agile principles, we estimate development tasks in story points rather than in hours (you can read more about reasons to estimate with story points ). But for the purposes of this article we’ll provide you with a story points estimation converted into an hourly rate estimation.

Implementing a marketplace, regardless of whether the marketplace is based on Sharetribe or made from scratch, is similar to implementing any other web application. Here’s the work we’ll do, in a general sense:

  • User Interface and User Experience design (the look & feel and behavior of the marketplace)
  • Responsive HTML and CSS (so your marketplace works great on any device)
  • Front-end programming (user interactions in the browser)
  • Back-end programming (server-side business logic)
  • Automation tests to remove bugs
  • Acceptance tests (manual testing)

After the initial launch of a marketplace we collect feedback from users, and after that we’ll need to develop your marketplace further. In the next section, we’ll provide you with our estimates for marketplace development, both made with Sharetribe and built from scratch.

How Much Will Your Marketplace MVP Cost?

Building a marketplace Minimum Viable Product (MVP) with common features is a practical first step, as you’ll be able to launch your marketplace as soon as possible. The faster a marketplace is released, the faster we can figure out what to improve.

In the article you’ll find a detailed explanation, expressed in user stories, of the functionality that will be included in your marketplace MVP. We’ll also provide an estimate in story points for each feature.

According to our estimation, a marketplace MVP requires 87 Story Points. 87 Story Points translate to around 750 hours of development time if a marketplace is built on Sharetribe, and around 1050 hours if we develop your project without Sharetribe.

We analyzed data provided by to show an average hourly rate for web development teams in several countries. Here’s what the hourly rates looks like:

Now take a look at the table below to see the approximate cost of web marketplace development:

Originally published here

About the Author

Sviatoslav Andrushko is a content manager at RubyGarage. Sviat adores writing about web development, web design, testing, and other IT-related topics.

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Author: Ievgen Cherkashyn

Ievgen Cherkashyn

Member since: Jun 29, 2016
Published articles: 56

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