Have you heard about the sharing economy? Also known as collaborative consumption, it is the idea about sharing what you have with other people – to rent out your car when you don’t need it or to host someone at your apartment when you are travelling or moving in with your partner. The concept of ‘sharing is caring’ is relatively new, but trendy and its popularity has skyrocketed recently. Places where sellers and buyers, or hosts and guests could meet up are called marketplaces. Since everything has moved online in 2020 as you probably know, such services have become the best place to find what you need or lend something that you don’t. Long story short, it’s the perfect time to create marketplace applications!
Airbnb is one of the most profitable, fastest-growing marketplaces – their revenue was claimed by experts to be $35 billion last year. It all started back to 2007 in San Francisco, when Brian Chesky decided to rent air mattresses at his apartment in order to afford the rent. The young entrepreneur called it ‘air bed and breakfast’ and through the years it became known as Airbnb.
Now they offer a website or an app, where a user can book a place to stay anywhere across the world. In other words, they provide a person-to-person or peer-to-peer service on the online platform. It’s the classic marketplace!
Due to many questions about how to create a marketplace mobile app, we have pooled our resources to make an ultimate guide on the app development. Everything you need to know in order to create marketplace applications like Airbnb: key features, costs and timelines.
Spoiler alert: at Purrweb we have a $30000 cost limit and 3 months deadline for MVPs. Scroll to find out more. Plus, a little bonus – you can get a free estimation of your app at the end of the page. Enjoy!
Wait, wait, what exactly is a marketplace app?
Long story short, a marketplace is a platform that connects people. Like social media, but with certain purposes of communication. Such apps work as mediators between buyers and sellers of goods and services.
There are two types of marketplaces: ones that sell everything you can imagine, like Aliexpress or Craigslist. There you can find cosmetics, clothes (used and brand-new), pets, furniture and even wigs.
The other group of apps has a particular focus, for example, Airbnb operates with housing only, or Zipcar and Getaround that work with peer-to-peer car sharing.
How do marketplace apps make money?
Easy! They charge a commission fee. Airbnb charges a 3% fee from an owner and 6-12% service fee from a guest. They have been experimenting with offering photography services and premium subscriptions like Airbnb Plus, but fees remain their main and stable source of income.
We will take the Airbnb example and review how to create marketplace applications. Let’s start with the functionality.
Key features of a robust marketplace
To nail the app development you need to make right choices about the main features for the service. There are two general strategies for picking features for your MVP (minimal viable product): you can either map a user’s journey or prioritize functions from must-have to will-not-have.
We used User Story Mapping technique and created a list of necessary features. Airbnb has two groups of users: hosts and guests, but they don’t split their app (like food delivery services do). They just execute a multifunctional service – you just log in and you can be a host and a guest at the same time. No need to download multiple apps, no headache. Here is how functionality looks for both guests and hosts.
Step 1: Registration/login. Future guests need to sign up or sign in if they have registered before. To simplify the process, we recommend adding integrations with a phone number, an email, a social media page or even AppleID. We don’t advise adding an option to be either a guest or a host. Imagine, if a person wants to rent their apartment out and go travelling, and imagine how annoying it’d be to switch between accounts, accept guests requests and book accommodations. Instead, just add this element to the settings page like Airbnb does.
Step 2: Personal user accounts. After a user successfully signed up, they go to a personal page to create a bio and add a photo – this will help hosts know more about future guests when they are accepting requests.
Step 3: Product (housing) search by categories. Next thing the user does after setting up the account is to go browse what the app offers. They will open a housing catalog and explore rooms and apartments. Here your marketplace web application will crave for a search bar to look for a particular city and filter by categories, like price, number of bedrooms, parking and etc.
Step 4: Wish lists. Probably, when you browse something, you see a lot of things that you want to save for the future – just add it to a wishlist. This feature is essential for customer retention. They can bookmark accommodations that they like, and if a price for a wishlist option drops, you can tell the user about it and get their attention back.
Step 5: Live chats for host-guest communication. When a particular house is chosen, the next step for a user is to chat with a host to make sure it is available and ask some follow-up questions. Here you will need messaging functionality like sending messages, delivery status and indicators that show when the person has been online.
Step 6: Checkout and payment processing. Users should be able to add a product to the cart, see the total with all fees you will charge and they pay. When it comes to finances, we recommend double checking that you implemented reliable payment getaways and secured the connection with data storage service. There are my subtleties when you create marketplace applications, so it’s better to outsource the development to a trustworthy contractor.
Step 7: Notifications. When a user books everything, it’s time for them to sit back and relax. But in case of emergency, they have push-notifications to get instant updates. For example, if a host needs to inform where he left the keys and you need to tell them when exactly your plane lands.
Step 1: Registration. Same functionality with guests – phone number, email and social media integration is a must.
Step 2: Profile page with the information about the property. If a user wants to be a host, they need to provide the information not about themselves only, but also about the apartment – add photos, descriptions and choose characteristics (they should be linked with filters).
Step 3: Requests. After customers post their accomodation, they expect to see tons of requests – this function should be updated constantly. Plus, it’s better to notify users when they get a new request via push-notification or a text message.
Step 4: Live chats. We bet after a host accepts the request, he or she wants to know more about the guest – who is going to stay in their apartment? When will they come? Do they want to be picked up from the airport? Let them discuss it with messaging features.
Step 5: Dashboard for statistics tracking. To keep users engaged and encouraged, it’s always a good idea to let them see their progress like how much they earn. Here there will be a lot of numbers and graphs, so find a good UX-designer, who will make this page easy-to-navigate.
Step 6: Notifications. Same here – hosts also want to be up-to-date about last minute changes, so push notifications are essential.
How to find someone who can successfully execute my app?
When hiring an outsourcer to create marketplace applications, do three things.
- Google company’s name to get an idea about their values and goals;
- Check the portfolio and reviews to see what other people say;
- Choose someone who works with React Native. Why? It’s less expensive and fast – the framework allows us to build a fully-functioning MVP in 3 months. So after 90 days you can start collecting feedback and showing the product to investors.
How much does it cost to develop a marketplace like Airbnb?
Here goes the most intriguing part of the article – how long does it take to create marketplace applications and how much money it costs? At Purrweb, we estimate the cost on a case-by-case basis, but our recommended cost limit is $30 000 on average.
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Let’s wrap up
Marketplace app development is a complex multistage process. But we can frankly say it’s worth jumping in – the sector is growing fast, because customers prefer buying and renting things online.
When you want to create a marketplace, first thing you should do is define your business model – are you going to sell everything like Alibaba or deal with only one product like Airbnb? Then, find a reliable and experienced product team who will help you define key features, design every single screen of your future solution and then turn it into a working product that users can benefit from. Consider hiring an outsourcing company who has experience in React Nattive – it will save your time and money. Don’t forget to check the company’s portfolio and the blog.
Our main value is complete process transparency, so we always discuss timelines and costs with clients beforehand. According to similar projects we have made, full cycle of development, including UI/UX design, QA testing, creating iOS and Android versions, and even more. It will take us only 3 months to build a fully functioning MVP that can be presented to potential investors. As a bonus – we will answer all your questions on how to create marketplace applications and share with you tips and secrets about successful execution.