How to build a rental marketplace. Fast.

A rental marketplace is a platform where individuals or companies can rent different types of goods from one another. The best-known example is Airbnb.

Since Airbnb first started, the popularity of peer-to-peer rental has skyrocketed. Sharing all kinds of goods from baby gear and cameras to bikes, cars, and homes is replacing ownership for more and more people all around the world.

It's easy to understand why rental marketplaces are so successful. E-commerce, marketplaces, and the sharing economy are huge trends with massive business potential. Renting expensive or infrequently used items instead of buying them is cheaper and often more convenient. At the same time, individuals are more and more willing to list their own items on a rental marketplace platform to earn some money on the side.

Marketplace platforms have another benefit: you can start a marketplace without any initial inventory. Because providers create your supply, getting started with a marketplace doesn’t require a huge investment.

Most importantly, marketplace software has become extremely affordable as well as quick and simple to use. For example, with Sharetribe, you can launch a fully functional marketplace in one day without writing a single line of code!

There truly has never been a better time to become a marketplace entrepreneur.

So, if people use a marketplace website to rent items from each other, how does the entrepreneur build a profitable business?

Most peer-to-peer rental marketplaces generate revenue through commissions. Commissions mean the platform makes money by taking a cut out of each transaction that takes place. This is the business model that Airbnb uses.

The commission model has one additional benefit: it can offer users extra security through escrow functionality.

Escrow means that when a customer makes a booking to rent something—say, a bike—their credit card is already charged when they make the booking. However, the provider who owns the bike doesn’t get the money before the customer actually receives the bike. The marketplace holds the funds in the meantime.

There are other kinds of marketplace business models available for rental platforms. For example, some marketplaces charge a fee for users to join or publish a listing. Others make money by selling ads or with premium services such as insurance or delivery.

However, the commission model is the most popular revenue model for rental sites because it’s usually the most lucrative one. The website owner gets a share of all of the value that goes through the platform. The commission model also makes it easier to attract providers as they only need to pay a fee when they make money.

A marketplace can be a fantastic business with low risk and high growth potential. But building a successful business is always a challenge.

As the popularity of rental marketplaces grows, so does the amount of competition. You need to find a business idea that solves a real problem for your users. Then you need to build a platform that both your providers and your customers love to use.

But how do you know your idea solves a real problem? How can you find out what kind of website your users would love? By launching the first version of your website as quickly as possible.

Launching fast is the best way to validate your business idea and start learning more about your users. No customer research, crowdfunding campaign, or competitor analysis can reliably tell you if people will really use your platform to complete transactions. The only way to know for sure is to build something, get it in front of real users, and start learning.

After you know more about your users, you can start developing your marketplace in the direction that works for your specific audience and niche.

Sharetribe has been designed with this iterative process in mind. You can start a rental marketplace with Sharetribe in one day. You get all the essential features without writing a single line of code. When you’re ready to take your business to the next level, you can expand your platform capabilities further without changing platforms or migrating data. Sharetribe is fully customizable and scalable. You can hire a Sharetribe Expert for custom marketplace development, or if you already have a developer on your team, look into our documentation for everything you need to start developing. If you plan to outsource development, read our guide to learn how to hire a marketplace developer and how to describe your marketplace's requirements to them.

Sharetribe is specifically designed to power rental marketplaces, whether they are P2P, B2C, or B2B.

Before you can start building, it’s important to understand what “essential features” actually mean for renting websites.

Many entrepreneurs think their website will have to match all of Airbnb’s extremely advanced features – not to mention its stunning visual style.

But trying to build an Airbnb clone has been the death of many great business ideas.

In fact, Airbnb first started as a modest WordPress website, and the founders, Brian Chesky and Joe Gebbia, were forced to do many things manually for a long time.

This approach is called building a Minimum Viable Platform (MVP). It’s the minimum solution that will allow you to test your idea without spending months and a fortune on development.

In the age of increasing competition, however, it’s not enough that your platform is viable. It will also have to be lovable for your very first customers.

So, what are the most important features that will make the first version of your website viable and lovable?

All marketplaces need a unique value proposition to thrive.

But, most successful platforms also have many features in common.

This makes a lot of sense. Users are accustomed to expecting a marketplace to work in a certain way. Re-inventing the wheel on the most common functionalities can generate unnecessary challenges because your customers might find your website difficult to use.

Here is a list of the most critical features that almost every rental marketplace will need.

All these essential rental marketplace features come out of the box with Sharetribe.

Costs are one of the biggest challenges for early-stage marketplace founders.

Building all of the features mentioned above from scratch—and making sure they work smoothly—is difficult, time-consuming, and very expensive.

At the same time, these features have become the bare minimum for rental marketplaces. Today’s users simply have less and less patience for anything but a premium-quality user experience. As a result, founders might spend several months and thousands of dollars building only the bare essentials—the features that need to be there but that the customers will probably take for granted.

The good news is that there are software solutions that you can use to build a marketplace without any coding. They offer the essential functionality at a fraction of the cost it would take to build it from scratch.

For example, Sharetribe offers you all of the essential rental marketplace features listed above.

Building a platform with Sharetribe is free. You only pay when you're ready to invite actual users onto your platform. Plans start at $99 a month, and you can always choose a plan that fits your business stage best. Instead of spending months and thousands of dollars on dev work, Sharetribe gets you launched in one day. No coding skills needed!

This allows you to use those critical first months and your resources on building your community and your business—not your tech.

Since building with Sharetribe is free for an unlimited time, you can check out all the features and see what your rental marketplace could look like.

No matter how creative or ambitious your business idea is, you can build it with Sharetribe.

You can successfully build, launch, and grow a rental marketplace, be it peer-to-peer, business-to-business, or business-to-consumer. You never need to write a single line of code!

When you’re ready to take the next step with your business, Sharetribe has you covered.

You can extend your marketplace's features and design indefinitely with custom code. In addition to all the essential rental marketplace functionality out of the box, Sharetribe's headless architecture lets you customize the code of your own frontend – or even build one from scratch. You can expand your feature set while still managing your marketplace with Sharetribe's world-class tools, without the need to change platforms or migrate data.