Dec 19, 2023

How to build a marketplace for local products

Creating an online platform for local products presents a promising business prospect. If you are contemplating building such a website, this guide is for you as it delves into the reasons and methods behind constructing a marketplace for local products.

What is a marketplace for local products?

Online marketplaces for local products are platforms where individuals or businesses can sell their goods to local customers through the internet. These marketplaces connect buyers and sellers within a specific geographic area, allowing customers to support local businesses and purchase locally made products. They often feature a wide range of products, including food, crafts, clothing, and more. These platforms provide a convenient way for customers to discover and purchase unique local items without the need to physically visit multiple stores. Additionally, they help local businesses reach a larger customer base and increase their visibility in the online marketplace.

Why build a website for local products?

What are the benefits for buyers?

Buyers on a marketplace for local products can enjoy several benefits. Firstly, they have access to a wide range of unique and locally made products that may not be available in traditional retail stores. Secondly, buyers can support local businesses and artisans, contributing to the growth and sustainability of their community. Lastly, buyers can often find competitive prices and deals on local products, as sellers on the marketplace may offer special promotions or discounts.

What are the benefits for sellers?

Sellers on a marketplace for local products can reap numerous advantages. Firstly, they gain exposure to a larger customer base, as the marketplace provides a platform to reach potential buyers beyond their local area. Secondly, sellers can showcase their products to a targeted audience interested in supporting local businesses, increasing the chances of making sales. Lastly, the marketplace may offer tools and resources to help sellers manage their inventory, track sales, and streamline their operations.

What are the benefits for the marketplace owner?

The marketplace owner also benefits from operating a platform for local products. Firstly, they can generate revenue through various means, such as charging sellers a commission on each sale or offering premium features for a fee. Secondly, as the marketplace grows in popularity, the owner can establish partnerships with local businesses, creating additional revenue streams through advertising or sponsored content. Lastly, the marketplace owner plays a crucial role in fostering a sense of community and supporting local economies by connecting buyers and sellers, which can lead to positive brand recognition and reputation.

Successful marketplaces for local products

Here are a few thriving online marketplaces that focus on promoting local products. Analyzing these platforms can provide valuable insights into the market dynamics and assist you in finding your niche.

  1. Etsy: Etsy is a popular online marketplace that focuses on handmade, vintage, and unique items. It allows local artisans and sellers to showcase and sell their products to a global audience.

  2. eBay: eBay is a well-known online marketplace that offers a wide range of products, including local items. Sellers can list their products for sale, and buyers can bid or purchase directly.

  3. Amazon Handmade: Amazon Handmade is a platform within Amazon that specifically caters to local artisans and sellers. It provides a dedicated space for handmade products, allowing sellers to reach a larger customer base.

  4. Facebook Marketplace: Facebook Marketplace is a platform where individuals and businesses can buy and sell various products, including local items. It allows users to connect with sellers in their local area and arrange transactions.

  5. Gumtree: Gumtree is a classified advertisements website that enables users to buy and sell a wide range of products, including local items. It provides a platform for local sellers to connect with potential buyers in their area.

What features does a platform for local products need?

The most important functionality of a marketplace for local products is to connect local producers or sellers with local consumers. This includes features such as:

  1. Product listings: The marketplace should allow local producers to create detailed listings for their products, including descriptions, images, pricing, and availability.

  2. Search and filtering: Users should be able to easily search for specific local products or filter results based on various criteria such as location, category, price range, or ratings.

  3. Reviews and ratings: Customers should be able to leave reviews and ratings for products they have purchased, helping other users make informed decisions.

  4. Secure transactions: The marketplace should provide a secure platform for transactions, ensuring that both buyers and sellers can trust the payment process and protect their personal information.

  5. Local delivery or pickup options: The marketplace should facilitate local delivery or pickup options, allowing customers to choose the most convenient method to receive their products.

  6. Communication tools: The marketplace should provide messaging or chat features to enable direct communication between buyers and sellers, allowing them to ask questions, negotiate prices, or arrange delivery details.

  7. Promotions and discounts: The marketplace should allow sellers to offer promotions or discounts on their products, attracting more customers and encouraging repeat purchases.

  8. Local community engagement: The marketplace should foster a sense of community by featuring local events, news, or stories related to the products or sellers, creating a unique and engaging experience for users.

  9. Mobile-friendly interface: With the increasing use of smartphones, a marketplace for local products should have a mobile-friendly interface or a dedicated mobile app to ensure easy access and usage for users on the go.

  10. Analytics and insights: The marketplace should provide sellers with analytics and insights about their products' performance, including sales data, customer demographics, and popular search terms, helping them make informed business decisions and improve their offerings.

What are the options & costs of building a marketplace for local products?

Costs of building from scratch

Building a marketplace for local products from scratch can involve various costs. These costs can include:

  1. Development Costs: Hiring a team of developers to design and develop the marketplace platform, including the frontend and backend infrastructure, user interface, and database management. This can range from hiring freelancers to building an in-house development team.

  2. Hosting Costs: Acquiring server space or cloud hosting services to host the marketplace platform and ensure its availability and performance. The cost will depend on the expected traffic and the scalability requirements of the marketplace.

  3. Maintenance Costs: Ongoing maintenance and updates to the marketplace platform, including bug fixes, security patches, and feature enhancements. This may require retaining a dedicated team or outsourcing the maintenance tasks.

  4. Marketing Costs: Promoting the marketplace to attract both sellers and buyers. This can involve various marketing strategies such as online advertising, social media campaigns, search engine optimization, and content marketing.

  5. Payment Processing Costs: Integrating a secure and reliable payment gateway to facilitate transactions between buyers and sellers. This may involve transaction fees or a percentage of each transaction as a cost.

  6. Legal and Regulatory Costs: Ensuring compliance with local laws and regulations related to e-commerce, data protection, and consumer rights. This may require legal consultation and the implementation of necessary measures to protect users' data and privacy.

It is important to note that the costs mentioned above can vary significantly depending on the complexity and scale of the marketplace, as well as the specific requirements and features desired.

Other options for constructing a marketplace for local goods

Creating an online marketplace for local products from the ground up is a significant and costly endeavor. However, there are now numerous alternative methods to build a marketplace that do not require a substantial budget.

The choice of approach depends on:

  • The desired features for the marketplace
  • Technical skills (either personal or within the team)
  • Budgetary constraints
  • Available time.

The various methods for building a marketplace include:

  • Utilizing WordPress and plugins
  • Constructing on top of open-source software
  • Employing a combination of no-code tools
  • Utilizing a dedicated no-code marketplace SaaS tool
  • Developing on top of an API-based marketplace SaaS tool

In addition to considering skills and budget, it is also important to prioritize the speed of learning. By quickly launching your local product platform, you can rapidly gain insights about your target audience. These insights are invaluable in creating a platform that users prefer over existing solutions.

Sharetribe's marketplace software is designed with this iterative learning process in mind.

Initially, we assist you in launching a platform for local products in just one day, without any coding required. Use the 14-day free trial of Sharetribe's Build plan to get your marketplace ready fast. After the trial, you can subscribe to either continue building or launch your marketplace and go live.

Once launched, you can learn about the additional features and functionality needed to cater to your audience. You may wish to completely redesign the platform's appearance and workflow, integrate various third-party services, or develop a mobile app. With Sharetribe, you can easily customize all these changes and more, either independently or with assistance from our Expert partners.

At Sharetribe, we have been constructing marketplaces for over ten years. Our experience and expertise are available to you through our content resources, regardless of the approach you choose to build your platform.

We wish you the best of luck with your local product website!

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