Steps to Launch a Minimum Viable Product (MVP) Marketplace

In today’s digital world, eCommerce marketplaces are thriving like never before. Now it has become an indispensable part of the global online retail market. According to Statista, retail eCommerce sales are estimated to exceed $4.1 trillion in the year 2024 and reach new heights. Marketplace leaders like Amazon, Alibaba, eBay, Etsy, Walmart, Airbnb and more are boosting the eCommerce industry, attracting entrepreneurs and enterprises to build marketplaces. 

Building an eCommerce marketplace is a great opportunity for entrepreneurs to reach a global audience. But before you launch an online marketplace, there are a few questions that need to be answered:

• Do you have an idea about the target audience?
• Will your marketplace beat the competition?
• Will your marketplace meet the customer’s expectations?
• Will your marketplace be successful?

That’s where the Minimum Viable Product (MVP) comes in, to answer all your questions, you need to develop an MVP. 

Hence, in this blog, we will dive deep to understand what is a Minimum Viable Product (MVP), how to create an MVP marketplace with simple steps, and what are the key factors that need your attention before building an MVP marketplace.

What is a Minimum Viable Product (MVP) Marketplace?

Understanding customers in the eCommerce landscape is always a challenge. They expect convenience, flexibility, and variety; it is more than just offering what they need. However, several marketplaces are introduced every day with unique value propositions. Still, they have to put a lot of effort into making a profitable business.

Thus, to ensure the profitability of your marketplace, it is important to validate the marketplace idea. This can be done with the help of a Minimum Viable Product (MVP) marketplace. An MVP for a marketplace is an operational version of your platform with only essential features. It looks very basic and is delivered to the early adopters who test out your solution. 

Entrepreneurs gain feedback from early adopters and use the iterative development approach for product improvement. With continuous inputs and amendments, the idea turns into a full-fledged and fully functional marketplace. In short, building an MVP is a smart and strategic move to tackle the challenges that a marketplace may face after entering the eCommerce landscape. 

Why One Should Build an Online MVP Marketplace?

Building an online marketplace MVP (Minimum Viable Product) is a strategic decision that can bring numerous benefits to entrepreneurs and startups. Explore the below advantages of building an MVP: 

• Market Validation

First and foremost, a Minimum Viable Product (MVP) is an excellent idea validation approach that lets you try your ideas and hypotheses by launching a basic version of your platform. You can validate your idea, identify potential challenges, make data-driven decisions, and develop essential features and functionalities in your final product. 

• Feedback Analysis & Product Improvement

With MVP, there is always a chance to come back and resolve issues, reduce pitfalls, tackle pain points, and more. Ultimately, by collecting feedback from early adopters, you can understand the market demand, whether users are accepting the product, whether it requires some improvements, or you need to rework the idea. This approach enables you to build your formula into a perfect marketplace solution. 

• Risk Mitigation

A Minimum Viable Product cost is several times lower than developing a full-fledged marketplace, which is one of the most undeniable advantages of an MVP. It is designed with some core features and the rest of the additional features are committed to the final product. That’s why building an MVP is always cost-effective, takes less time, and saves resources than a fully functional platform. MVP is developed with a set of necessary features for the platform. 

• Reduced Time-to-Market (TTM)

Launching a marketplace quicker than competitors can be a significant differentiator and may help you gain a competitive edge over potential rivals.  For instance, several marketplaces have reaped the benefits of hitting the market first. In this fast-paced digital landscape, an MVP enables an early approach to introduce your marketplace because it reduces launch time. As you never know, some other company may roll out a similar product before you enter into the market. 

• Awareness & Organic Marketing

An MVP provides a unique opportunity to engage with your target audience, build a community, and foster loyalty. Involving early adopters, including both vendors and customers, in the development process can create a sense of ownership and encourage them to become part of the marketplace’s growth. This can lead to positive word-of-mouth advertising, online reviews, and create social media buzz. In short, this essential approach can help you drive growth and attract new customers in the early stages.

• Attract Investors

Lastly, if your idea is validated, it attracts investors, partners, and talents. A fully functional MVP demonstrates your vision, showcases your capabilities, and provides a tangible example of your marketplace potential. It can be a powerful tool for securing funding, developing strategic partnerships, or recruiting top talent to help you scale your fully-fledged marketplace.

• Generate Early Revenue

While building a marketplace, profitability and a stable income stream are the major challenges. Getting early expected transactions helps the team to keep moving toward product development. There might be two possible early revenue-generating scenarios, the first one is, that if your product and idea are on the right track then there is a high chance that the early adopters will continue with the marketplace. In the second scenario, a successful MVP can allow your full-fledged marketplace to reach the breakeven point faster and can increase the chance of early revenue and profitability.  

Successful Players in the Industry Who Started as MVP

Building a Minimum Viable Product (MVP) is always a better approach and has proven to be a game changer for startups and entrepreneurs. Several successful businesses are there that launch their MVPs before launching their full-fledged product.

1. Amazon

One of the most famous and leading marketplaces “Amazon” was also started as an MVP. Jeff Bezos, the founder of Amazon, came up with the idea of selling books online by launching a website in 1995 as he saw the rise of the internet. He slowly expanded his into selling videos and music and soon in the year 2000, more categories were added including electronics, household items, toys, video games, software and so on. Moreover, in 2002 Bezos launched Amazon Web Services to make Amazon a tech company. Again, in 2006, Amazon launched the Fulfillment program, allowing third-party sellers to sell products through Amazon’s warehouses. According to Statista, Amazon’s net sales revenue worldwide was $575 billion U.S. in 2023. 

2. Airbnb

Most of you have heard about Airbnb, which was started by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia in San Francisco to pay their apartment rent. They started it because the founders were facing difficulty in paying their rent. Today, Airbnb is a leading online service for booking rental accommodation across the world and is valued at $30 billion with 4 million listings. It was a simple website as an MVP with an advertisement stating that airbeds were up for rent with some apartment photos. They first served their three guests with airbeds and breakfast and the idea proved to be a success

3. Instagram

Instagram, a leading platform in social networking and entertainment today was also an MVP. It was launched in 2010 by Kevin Systrom and Mike Krieger and later acquired by Facebook in the year 2012. Instagram was a simple MVP that allowed users to take photos on their phones, apply filters, and share their daily life moments on a platform. These users wanted a more visual way to connect and interact with themselves on a social platform. With its popularity among users, Instagram started integrating new features to share videos, add stories, and much more. 

Today, Instagram has 2 billion active users who spend an average of 33.9 minutes per day, making it one of the most influential social media platforms worldwide. In 2023, Instagram’s ad revenue was $50.58 billion and in 2024, is expected to reach $59.6 billion which also states how successful the MVP example is. 

4. Etsy

Etsy is a peer-to-peer marketplace that started as an MVP website in 2005. It is popularly known for selling unique and handmade products and vintage items. Founders of Etsy – Rob Kalin, Haim Schoppik, Jared Tarbell, and Chris Maguire noticed that craftsmen and creators selling their products on eBay were unhappy with the platform’s high fees. And then they decided to compete with the giant, eBay to solve the sellers’ concerns. They built an MVP with multiple categories allowing users to upload product images with details including description, pricing, product images, etc. 

The revenue model of this platform was a nominal listing fee which was 20 cents and the item would be listed on the platform for four months. And applied a fixed transaction fee for selling products, which was also much lower than any other platform was charging. It also proved to be a huge success and today, Etsy is one of the leading marketplaces with over 7.5 million+ active sellers, 100 million+ listed products, and 96 million+ active buyers. 

Essential Features of an Online Marketplace MVP

While building a marketplace MVP, you should always be assured about the core features and functionalities for better user experience, easy navigation, and smooth transition. Here are the most common features for building an online marketplace MVP (Minimum Viable Product): 

• Homepage: The very first page of your marketplace MVP with several essential elements like header, logo space, search bar, product category or services, a footer with essential links, and any other sections or valuable information that you want to showcase to the customers while landing on your platform. 

• Registration: Registration on the platform means getting access to services on the platform. By filling basic information in the featured form and accepting the terms and conditions of the platform one can sign up on the platform using Gmail, social media handles, Apple ID, and more. 

• Product/Service Page: It allows buyers or visitors to get detailed information about the products or services that a marketplace offers. Usually, the product pages include descriptions, key information, product images, product videos, specifications, customer reviews, warranty or guarantee details, pricing, and more. This page is the most visited page where buyers or visitors call for action of buying or choosing products or services.

• Search Option: The search bar should be clearly visible and simple because users browse or find the required product or services by entering related keywords in the search bar to search them.

• Book/Buy Option: This feature allows users or visitors to the platform to book or buy services or products as soon as they decide to choose one. 

• Messaging: It enables communication between both parties (seller and buyer) involving products or services. It may include discussions on products, prices, payment procedures, delivery, and much more. 

• Notification: This essential feature enhances the user experience for marketplace customers by providing notifications on products or services, upgrades, and new features, or order-related requests. 

• Payment Processing: Payment processing is one of the essential features of the marketplaces which is commonly used for payment flow. There are a few popular marketplace payment gateways including Stripe, PayPal, Square, Braintree, and many more. 

• Ratings & Reviews: Review and rating features make your marketplace MVP more reliable. It allows users to post ratings and reviews as feedback on the product and services, which is equally good for both parties. For customers, it builds trust and increases confidence in buying products or choosing services. For the marketplace, it provides opportunities to update and amend changes to meet customer satisfaction.  

Additional Features of an eCommerce Marketplace

• Responsive Design 
• Easy Checkout 
• Order Management 
• Product Catalogs 
• Seller Dashboard 
• Admin Dashboard
• Support Option
• Feedback Option
• Social Sharing
• Analytics Dashboard
• Inventory Management
• Content Management
• Import-Export Feature 
• Promotion and Advertisment
• Abandon Cart 
• Add to Cart

Things to Consider Before Launching a Marketplace MVP

• Market Research: Identify the gaps in the market and understand your target audience and their pain points. 

• Unique value proposition: Research competitors and find what sets your idea apart from competitors. Because a strong unique value proposition attracts users and drives growth.

• User-friendly Interface: A seamless experience always matters, it can significantly impact user retention. Therefore, designing an intuitive user interface is paramount in your MVP marketplace.

• Define MVP Features: Leverage your marketplace MVP with enough features to attract early adopters in order to validate your marketplace idea in the product improvement cycle. 

• Development Approach: Choose the best possible development approach (custom or readymade) for your Minimum Viable Product (MVP) with the goal of launching your marketplace MVP quickly with all required features. 

• Decide Revenue Model: This consideration involves the decision of how you will generate revenue. There are several popular revenue models including commission on sale, transaction fees, subscriptions, or advertisements.

• Feedback & Product Enhancements: Develop mechanisms for gathering early adopter feedback in order to enhance your marketplace features, functionalities, services, and products after launch. 

• Marketing Approaches: Plan an effective marketing strategy to fuel your marketplace growth by increasing visibility and attracting users.   

How to Build an Online MVP Marketplace?

Building an MVP means building the first version of your product with enough features to attract early adaptors to validate your idea. To kickstart this journey you need to have a clear road map including product strategy, ample resources, a development team, and so on. In addition, you also need to consider, your timeline, budget, and customization level. These considerations will help you choose the best approach to launch your marketplace MVP. 

Two primary development approaches you can opt to launch your MVP marketplace: 

1. Custom Development: This approach involves building the MVP marketplace from scratch which offers you complete control over its features and functionality. However, it requires more time, resources, and investment. The development process can take 8 to 10 months or more depending on the requirements.

2. Readymade Solution: Alternatively, you can launch your MVP marketplace using a readymade solution, which can speed up the process and reduce costs. It can be installed immediately and customized to meet a business’s needs saving time and resources. 

How Yo!Kart Can Help in Building an MVP?

Yo!Kart is a ready-made eCommerce marketplace solution for enterprises and entrepreneurs looking to build a marketplace MVP efficiently. It can help you build your MVP marketplace to fit your specific product or service-based model without starting from scratch. Yo!Kart significantly simplifies the process of building your MVP marketplace with the following advantages: 

• Rapid development: Yo!Kart is a pre-built eCommerce marketplace solution that allows you to launch your MVP quickly and efficiently by saving your time.

• Cost-effective: It can be a more affordable option compared to custom development, as you don’t need to invest in a large development team and other development procedures. With Yo!Kart you can build your MVP marketplace for starting at $499 only. (Further amount will depend on your feature-specific requirements).

• Scalability: You can easily scale your marketplace with Yo!Kart. It is designed to handle increasing traffic and data volume. In short, it allows you to grow your marketplace with your growing business.

• Free Support: Yo!Kart provides 1 year of technical support for its pre-defined features and functionalities.

Final Thought

Building an online marketplace MVP is a wise decision to validate your idea, enter the market quickly, engage with your audience, and attract investors. This approach helps you gather valuable information about user behavior and their preferences including their pain points. By launching an MVP you can get crucial insights, mitigate risks, accelerate growth, and set yourself up for long-term success. In addition, you can launch your marketplace MVP with a readymade eCommerce marketplace solution Yo!Kart efficiently. It streamlines the development process, reduces time to market, minimizes development costs, and quickly iterates based on user feedback.