Building a MVP marketplace: A practical guide on how to create an online marketplace

How to build an online MVP marketplace in 2025: A practical guide

Published on November 13, 2024 by Rasmus.

How to create an online marketplace is an exciting but challenging task. One way to manage the risks and costs involved is by starting with building a Minimum Viable Product (MVP).

In this guide, I’ll explore the benefits of building a MVP marketplace fast, key features to consider, and steps to quickly bring your online marketplace MVP to life.

If you have time, then watch this video where I explain the steps in detail:

Why build an online marketplace MVP?

Building an MVP for your marketplace is a smart strategy to minimize risks and maximize learning. An MVP allows you to launch a simplified version of your marketplace, focusing on essential features while minimizing initial costs.

By launching a MVP marketplace, you can quickly gather valuable feedback from early adopters, allowing you to refine your product based on real user insights.

Key benefits of building an online marketplace MVP:

• Market validation: Launching an MVP enables you to test demand and gather insights. Real user feedback helps refine your product to align with market needs, indicating early on if your platform resonates with your target audience.
• Cost efficiency: By focusing only on core features, you save on development costs, avoiding investment in untested, non-essential elements. This approach enables you to allocate resources effectively while focusing on what matters most for initial traction.
• Faster time-to-market: An MVP allows you to get your marketplace live quickly, giving you an edge in capturing an audience early. With a faster launch, you can begin marketing and iterating on your platform, building awareness before fully scaling.
• Risk mitigation: Testing the market with an MVP reduces the risk of building a full-scale platform that may not resonate with users. Early-stage validation allows you to pivot or make necessary adjustments without incurring high costs.

Steps on how to build a MVP marketplace

The first step in building a marketplace isn’t writing code or picking a platform. It’s making sure your idea actually has demand.

Key questions to ask yourself:

• Who are my buyers and sellers?
• Are people already solving this problem in another way?
• Would someone actually pay for this?

A quick way to test this is to go where your potential users already hang out. Could be on Reddit, Facebook groups, LinkedIn or similar. Check what they are talking about and ask questions. Maybe they reveal something they are frustrated about. And check if they’re already trying to connect in some manual way.

Another way to validate demand is by checking competitor marketplaces (if any). Are they successful? Are users actively engaging? If the answer is yes, that’s a good sign. If not, then you have to find out why.

And when you’ve validated your idea, it’s time to decide how you’re going to build your marketplace. There are three main ways to do this, and each has pros and cons depending on your skill level and budget.

• No-code tools (fastest, but limited):
  Platforms like Sharetribe and Bubble let you create a marketplace without coding. They’re great if you want to launch quickly and test your idea, but they come with trade-offs. You’re limited by what the platform allows, and custom features can get tricky. Also, they quickly become expensive as you scale as explained in this post.
  
  ✔ Best for: Founders with zero coding skills who want to launch fast.
  ✘ Downsides: Less flexibility, higher monthly costs, limited ownership.


• Boilerplates (balance between speed & flexibility):
  Boilerplates like the Speed Build Marketplace one give you a pre-built foundation where all the basics are alredy set up like authentication, payments, messaging, but you still have full control over the code. This is a great middle ground if you have some coding skills or if you are ready to learn how to built on top of it using AI. It can also be used for still hirering a developer, but giving him a head start.
  
  ✔ Best for: Developers & tech-savvy founders who want a head start.
  ✘ Downsides: Still requires some development time & hosting setup.


• Hirering a developer (flexible, but slowest):
  If you have a unique marketplace idea and you are non-technical and you do not want to build using a no-code tool or using AI on top of a boilerplate - you can choose to hire a developer. This gives you full control, but it also means that you first need to find a developer, and then that person needs to do everything from scratch - from designing the database to writing APIs, handling security and so on.
  
  ✔ Best for: Non-technical founders or teams building something highly custom.
  ✘ Downsides: Takes the longest, costs the most, and requires hirering a developer.

Setting up the core features on your MVP marketplace

Every marketplace has a few key features that make it functional. Here’s what you need to include in your MVP.

• User authentication (logins, profiles) You need a way for users to sign up and log in. Tools like Clerk, Firebase, or Auth0 make this easy.
• Listings (creating, editing, managing) Your sellers need a way to create and manage their listings. This is where they add descriptions, prices, and images.
• Payments & monetization Marketplaces typically make money by taking a cut of each transaction. Stripe Connect is the go-to solution for handling payments between buyers and sellers.
• Messaging & communication Buyers and sellers need a way to chat before making a purchase. A simple messaging system inside your platform helps build trust.
• Search & filtering Users need to find what they’re looking for fast. Basic search and category filters will go a long way in making your marketplace user-friendly.

Launch and collect feedback for your marketplace MVP

The initial launch of your marketplace MVP is an exciting milestone. Take this opportunity to evaluate user engagement, usability, and identify areas for improvement. Gathering feedback from real users will provide valuable insights that can guide you in refining your platform and prioritizing future updates.

In this video, I share my experience launching My Spare Desk on platforms like WhatsApp, Facebook, Hacker News, and Reddit. This helped me reach diverse audiences and collect valuable feedback.

Key metrics to measure success for your marketplace MVP

Tracking the right metrics provides insights into your marketplace’s performance, user behavior, and areas for improvement. Monitoring these essential metrics for your marketplace MVP can guide your growth and refinement strategies.

• Monthly active users (MAU): Tracks the number of unique users engaging with your platform each month. An increasing MAU count reflects growing interest and platform adoption among your target audience.
• Transaction volume: Tracks the total number and value of transactions on your platform. Growth in transaction volume is a clear indicator of user activity and marketplace success, showing that users are actively engaging in buying and selling.
• Repeat purchase ratio: This metric measures the percentage of users who make multiple purchases. A high repeat purchase ratio signals strong customer retention and satisfaction with your marketplace offerings.
• Bounce rate: This metric measures the percentage of users who leave your site after viewing only one page. A high bounce rate may indicate that users aren't finding what they’re looking for or that the user experience needs improvement.
• Time on site: Shows how long users spend on your platform. Longer sessions often correlate with user engagement and satisfaction, demonstrating that users find value in your marketplace.

Examples of successful marketplace MVPs

Amazon: Amazon’s MVP was an online bookstore, eventually expanding to become the world’s largest e-commerce platform.

Airbnb: Airbnb started as a simple website for renting out space, evolving into a global lodging platform based on user feedback.

Etsy: Etsy began as a marketplace MVP for handmade goods, allowing small artisans to sell their crafts online. Today, it’s a widely recognized platform for unique and creative products.

Nordic Mugs: Nordic Mugs launched as a niche marketplace for collectible Moomin mugs. The platform quickly attracted a dedicated community of buyers and sellers. I built Nordic Mugs using Next.js and MongoDB. 😊

Reverb: Reverb started as a marketplace MVP for buying and selling musical instruments. Focusing on musicians' specific needs, it grew rapidly to become a leading platform in the music equipment industry.

All in all

Exactly how to build an online marketplace is a strategic approach that enables you to validate your idea, gain insights from real users, and optimize your product for success. By focusing on core functionality and iterating based on feedback, you can confidently grow your marketplace.

To sum up, this is why building an online marketplace MVP is almost always a good idea:

• Validate your idea: Launch quickly to test market demand and gather valuable user insights.
• Focus on core features: Prioritize functionality that solves key problems for your target audience.
• Iterate based on feedback: Use real user input to refine and improve your platform.
• Minimize risk and costs: Avoid over-investing in untested features by starting small.
• Scale strategically: Build a strong foundation for growth as your marketplace gains traction.

Ready to build your marketplace? The Speed Build Marketplace boilerplate can help you get started with a robust marketplace MVP foundation.