Peer-to-Peer marketplaces are services that connect buyers and sellers without owning any resources. The platform is entirely powered on the community’s resources and activities — business owners have to provide the conditions for interactions and payments. P2P websites form P2P commerce — a unique kind of e-commerce where users don’t rely on a single store but can connect to multiple sellers simultaneously and directly.
P2P platforms cover various niches and provide all kinds of goods and services — from online shopping, like eBay, to transportation services, such as BlaBlaCar. These marketplaces have been quickly exploring new niches, but the best thing is, there is always space for innovation.
Peer-to-peer online marketplaces have been among the most successful business models of the decade. Etsy, Airbnb, and other international platforms where users can trade goods and services, quickly rose to prominence. Why are P2P marketplaces thriving and how can business owners leverage these opportunities? Let’s take a look at the main reasons for peer-to-peer platform development.
A peer-to-peer online marketplace doesn’t require business owners to invest in buying products or taking care of storage. The service relies on customers without risks from founders. The website development and promotion is the only significant investment, required from a business owner. Compared to traditional stores and marketplaces, this type of business is practically risk-free. Business owners don’t have to focus on shipping or production, but instead can target strategic tasks and invest in growth.
Marketplaces are constantly evolving — they are among the first ones to adopt big innovations like Artificial Intelligence or big data. The reason behind that is quite simple: such marketplaces can focus on changes rather than on financial issues. The goals are clear — as soon as the marketplace attracts visitors, it will be successful. You are not tied to a particular country or industry — business owners always explore new fields and open new categories, if an interesting niche opened up.
A common myth about a digital startup is that an owner should necessarily know software development in detail. In reality, business owners prefer to hire dedicated teams who will be fully responsible for software development, testing, and maintenance. Even those owners who indeed had experience in programming, prefer not to spend time on tasks that can be easily outsourced.
This means the entry barrier for starting a peer-to-peer marketplace is very low. You need to have a concept, find a profitable niche, come up with a business model, and find a dedicated team to build a peer to peer website. It’s enough to lay a foundation for a potentially multi-million company.
Peer-to-peer marketplaces provide a clear outlook on customer activity. You have regular statistics on purchases, users can rate the offers on the website, leave reviews, and communicate with each other. Business owners don’t even have to ask for feedback — users are usually eager to provide their opinions in reviews and ratings. This level of transparency isn’t that common in traditional B2C companies, because unlike in P2P platforms, users don’t feel being a part of the community.
Let’s take a look at the benefits of peer-to-peer marketplaces from the perspective of a customer, a seller, and a marketplace owner.
Peer-to-peer shopping is a very comfortable option as consumers don’t have to run through many different online stores and can find everything they need on one platform.
The main benefits of the P2P marketplaces for the consumers are:
A peer-to-peer marketplace is a source of limitless opportunities for sellers. In short, the advantages boil down to:
Owning a P2P marketplace platform offers a lot of different options for future development and enlargement, and that’s why it’s a great project to invest in.
Here are some advantages you could benefit from:
Over the last two decades, we’ve seen the rise of many successful peer-to-peer marketplaces. eBay, Craigslist, Freelancer — all these platforms have quickly attracted an active community and are still highly relevant.
Because P2P marketplaces cross different niches and target audiences, it’s easy to miss a general pattern that unites all successful sites. In reality, the functionality of every successful P2P marketplace can be broken down into simple building blocks, identical to every successful platform regardless of the date of foundation and niche. Here, we review this crucial functionality that makes these sites attractive to the audience and highly usable.
Sellers and buyers alike should be able to register a profile on the platform without specifying too much personal data. The platform should provide information on a person’s location contact information, and buying/selling preferences. Now, platforms include the possibility to register an account with social media credentials (Facebook, Google, etc).
All users should be able to add a service or product to the website. As soon as the item is added to the marketplace, the website should provide the possibility to change the ad, edit the description, add pictures, or delete items. Customers should be able to comment, review, and evaluate the services or products. Transparent feedback is a crucial trust-forming factor.
When customers want to purchase or rent a product, or order a service, they should be able to pay for it in a few clicks. The website must offer several payment options — direct bank transfer, credit card payments, and online wallets.
It’s important to note that checkout statistics are rather pessimistic: over 60% of website visitors leave the website before they complete the purchase. Main reasons are complicated checkout forms, the lack of transparency, and a slow shopping cart.
The goal of a business owner is to make sure that customers can easily communicate with each other and quickly close their deals. Messages and replies shouldn’t get lost — most users won’t visit the platform to check their messaging history. The best option is to send alerts on the email addresses or phone numbers to make sure a person sees the message. You can also enable push-notifications, but avoid using them for spamming purposes.
The platform’s revenue is only as real as its users. If the website is filled with bots and fakes, it won’t promote trust and the community will likely fail. Hence, there are two takeaways here. Never use bot farms and spam methods for promotions. All sign-ups should be legit. Also, you need to prevent spammers from registering on your website by querying an account verification. The easiest option is email verification — but it’s not the most efficient one since email accounts can be faked just as well. Examples of data that can’t be easily faked are mobile number confirmation or facial recognition.
The most important stage of developing a P2P marketplace is software development. The website's functionality and interface will largely determine the business’s success. Here, we broke down the process of building a simple but efficient P2P marketplace into a step-by-step guide.
Before you start looking for a software development team and outlining the development process, you need to have a clear understanding of your business.
These preparations allow business owners to form a long-term vision before they start focusing on tasks at hand. Once the development starts, it’s easy to overlook strategic goals, so strive to outline them early on.
To build your platform, you can use an open-source peer-to-peer marketplace such as Sharetribe or Magento or build your own.
The choice fully depends on:
Open source platforms can be described as online templates that you customize and add a limited number of additional features. There are solutions on the market made specifically for creating peer-to-peer marketplaces such as Sharetribe, Marketplacer or Near Me. They let you customize the design and apply some features necessary for a P2P platform: payment systems, analytics, ratings, reviews, product listings, and so on.
If you need a simple and fast solution, and your idea isn’t overwhelmed with additional features, use open source peer-to-peer marketplaces.
Let’s see what pros and cons they provide, and how the building a peer-to-peer website process looks like on such platforms.
When a development team builds a platform from scratch, the owner has a say in every aspect of the marketplace: functionality, user interface, add-ons, analytics, admin panels. For developers, building a new platform is often easier than customizing the existing solution, because they can use comfortable tech stacks and structure code optimally.
If a business owner already validated the marketplace’s concept, it’s better to develop custom code, since it’s easier to manage long-term. However, if the business model hasn’t been brought to customers yet, you can start on ready solutions, invest in the promotion to attract first visitors and verify that the target audience is interested.
Regardless of whether you choose a ready solution or invest in custom development, several aspects must be taken into account during development and customization.
After the solution was built and brought to different platforms, it’s time to release the platform to the market. From that point on, a business owner has to analyze the feedback and maintain the website.
Business owners have to face the competition with well-established platforms and keep up with increasing user requirements. Let’s take a look at successful P2P marketplaces and their features in different industries.
With more than 7 million properties rented worldwide, Airbnb is an example of a successful P2P marketplace. The platform allows users to place their property for renting or book a room from locals. Initially, the marketplace only took care of renting a property, but now it also offers entertainment and adventures — an example of successful scaling.
Airbnb made a priority of attracting as many hosts to the platform as possible. Guests are the ones to pay the fee — 6% to 12% from each offer.
An online marketplace for sharing rides allows people to find affordable rides. The platform has more than 80 million users and is launched in 22 countries, mostly in Europe. At first, the app didn’t charge commissions for deals but change price politics in favor of taking 20% commission.
Without owning vehicles, BlaBlaCar attracted more than 80 million users, relying completely on the community’s resources. It’s a great example of tapping into a profitable niche and efficiently executing the idea.
This is a proximity-based startup that allows users to connect to local buyers and sellers. The app relies on local communities and helps small businesses to find their audiences.
5miles is an example of a small startup that managed to build loyal local communities and be successful in that narrow niche.
We enjoy working with marketplaces because of all the global scaling opportunities. At Gearheart.io, we build web peer-to-peer marketplaces in one or several niches alike, ready to take on projects with any scope. Our experts provide professional consults on scaling opportunities, while the technical team of developers and designers builds an intuitive platform for the community.
If you have an idea for a P2P marketplace, drop us a line — we’ll take a look at your concept or join an existing project. If there is no business model yet, we are ready to help with refining and verifying it. Our team will answer your questions, evaluate the development costs, and offer a perfect way to build your peer-to-peer marketplace from scratch.
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