Thinking about starting an online service marketplace business?
Then, the next step is asking yourself: will I build the software or buy it?
In other words, are you going to:
A. Build your own online service marketplace platform in-house?
B. Build your service marketplace software through an agency of developers?
C. Or buy a ready-to-use Platform as a Service (PaaS) solution to create your online marketplace?
There are many pros and cons when it comes to deciding whether you should build vs buy an online service marketplace platform. You’ll want to carefully consider these factors when making the decision that makes the most sense for your business.
Factors such as cost, time, customization, maintenance and more, all come into play when deciding if you should build or buy your online marketplace platform.
In this post, we’ll go over the pros and cons of building versus buying an online service marketplace to help you make the best decision!
Build vs Buy Option A: Build Your Online Service Marketplace Platform In-House
You could technically DIY it by Googling, “how to build a marketplace” (but would take away a TON of time from your business) or you can add some developers to your team!
Building an online service marketplace platform allows you to completely customize it
When you build your own online marketplace platform in-house, you can build something that suits your needs perfectly.
You have the luxury of choosing everything that’s on your dream list of features, so that you fulfill the exact vision you want.
You won’t have to make concessions based on what PaaS (platform as a service) solutions offer.
Building a service marketplace software allows you to easily add additional features
Once you have your online service marketplace platform up and running, you can decide which features you want to add and when.
It’s much harder to do this when using a development agency, as they will likely require a large project, or try to batch multiple features together before they tackle the features, resulting in unknown timelines.
Building an online marketplace platform can be very risky
In terms of timelines, it can take months to develop the ‘minimum viable product’ for your online service marketplace platform.
Delaying the launch of your marketplace which means you could burn through cash and miss out on revenue from sales.
Furthermore, web development is typically fraught with delays as unexpected issues come up along the way when trying to build out features.
Building a multi-vendor service marketplace platform is a massive undertaking that usually isn’t fully realized at the outset.
Delays also mean your competitors could potentially gain traction while your progress is stalled.
Another thing to keep in mind is determining whether or not your team is equipped to solve the issue that could arise from building an online marketplace platform in-house.
If you build your own online service marketplace platform your team needs to be ready to fix bugs and troubleshoot software issues, and this could put a strain on your team if your team is already small.
Building a marketplace e-commerce platform can be expensive
When you develop an online service marketplace platform in-house there are usually additional ongoing costs that tend to be forgotten about when initially starting the project.
- Most people forget about the hosting costs that you’ll need to pay.
- You’ll need to keep a developer on retainer at least part time to handle bugs that pop up or to add new features to your marketplace.
Sometimes it can cost just as much (or more) to maintain a platform than it is to build it.
It’s not enough to simply build a platform. You need to take into account what it’ll take to continually maintain and upgrade it.
The scary thing is, it’s hard to predict exactly what this will cost, as each software product is different.
Building an online service marketplace platform can be tricky because a lot of people don’t know what to build
On the surface, you may think it’s easy to build your own software.
However, most people don’t actually know what features to include when building a marketplace platform or how to make each of the features look.
- Designing the service marketplace e-commerce platform to work seamlessly for both service providers and customers
- Building an online service marketplace platform that converts leads into sales
It’s not as easy as checking out a competitor’s platform and seeing what features they have.
There are also a ton of things happening ‘under the hood’ of the system that can’t be seen from just looking at the front-end of a system.
Spending time developing and building a marketplace platform in-house can distract you from focusing on your actual business.
Build vs Buy Option B: Outsource To An Agency
If you don’t feel like scouring through numerous “how to build a marketplace” articles and videos, consider building a service marketplace e-commerce platform with an external agency.
Completely customize your online service marketplace platform
Similar to building an online service marketplace platform in-house, by outsourcing the work to an agency you can integrate your dream features list and the vision you have in mind.
This is an online marketplace platform that is completely customized to exactly what you want with less limitations than if you were to rely on PaaS solutions.
You can focus on how you’re going to grow and develop the business while the developers worry about the technical side of building the online marketplace platform.
Launch your marketplace software faster than in-house
The developer agency can also build the online service marketplace platform faster than if you were to build it in-house.
However, while they can build it faster, you’re still at the mercy of their timelines.
Their agency will most likely have other clients and projects that they’re working on at the same time which can delay things.
Therefore this can still be a slow process compared to PaaS solutions.
Marketplace software can become obsolete VERY quickly
Since software becomes obsolete very quickly, you will need to continually tweak your online marketplace software to compete with other marketplaces which can be very expensive.
Also, as you get data from customers who use your platform, you’ll want to make updates to the marketplace software to improve user experience.
It can also be very time-consuming to research the various agencies that can provide these services and in the end there is still no guarantee that the work will be what you want it to be.
Project could go out of the initial scope of work as you update online service marketplace platform features
Another thing to take into consideration is that it’s not usually a “one and done” cost when hiring agencies to develop your online marketplace platform.
This isn’t a permanent solution that will suit your needs for several years.
You will need to continually spend money in order to update the marketplace software and most agencies don’t work on retainers, and if they do, the cost can be out of reach for many.
Also, if things go outside of the scope of work that was outlined in the beginning of the project, then you run the risk of going way over budget.
This happens a lot and it can leave business owners feeling frustrated, stressed, and powerless.
Launching your online service marketplace platform will be slower than PaaS solutions
While an agency of developers can build an online service marketplace platform faster than in-house, you’re still at the mercy of the agency’s timeline, where they may have other clients and projects that they’re working on at the same time.
This means issues don’t always get solved in a timely manner, causing frustration for you, your customers, and service providers.
Therefore timelines can still get pushed and this can be a very slow process compared to PaaS.
Build vs Buy Option C: Buy a PaaS Solution
PaaS (platform as a service) solutions have many benefits which is why they have grown in popularity recently, but it’s important to keep in mind that not all PaaS solutions are created equal.
PaaS solutions will launch your online service marketplace platform fastest
Depending on the PaaS solution you choose you can enjoy a quick ramp-up time to get your online marketplace platform launched into the market.
It won’t take very long to adopt the features for your specific marketplace to give you a custom feel that is right for your business.
A good PaaS solution company will provide you with a lot of support to walk you through the process of getting set up.
With the right PaaS solution company, your online service marketplace will be up and running as quickly as possible.
PaaS solutions are less expensive than building your own online service marketplace platform
Another reason a PaaS solution can be better than other options when you’re building your online service marketplace is that you can predict the costs from day one.
There are no costs that can come up as a surprise due to developers doing work that is out of the initial scope of work they quoted.
Typically when you use a PaaS solution you will pay on a monthly basis, so the cost is spread out and manageable and you know exactly what to expect. There is also no large upfront cost to be concerned about.
Hosting costs are also something you won’t have to worry about if you choose to use a PaaS solution.
Again, do your research to consider price ranges across different PaaS solution companies to see which one gives you the most value when combined with the level of features and customization that will work for your business.
PaaS solutions are less risky than building your own online service marketplace platform
Another appealing aspect of using a PaaS solution is that it is low risk.
These services usually don’t require a long-term commitment which means you can try it out for a while and see how it fits your business.
If the PaaS solution isn’t working well for your service business needs then you can simply stop using it and try a different company’s solution.
PaaS solutions will maintain the online service marketplace platform software for you
Imagine you run a business that relies on clients booking services online.
A poorly-maintained software might eventually start glitching, perhaps preventing people from logging in to the system or even lagging (the bane of every e-commerce business).
This results in increased bounce rates, decreased sales, and frustrated customers.
Software maintenance is extremely important for platform performance because it keeps the heart of your business running smoothly.
And it keeps clients happy!
Software maintenance includes things like:
- Bug fixing
- Capability enhancement
- Removing outdated functions
- Performance improvement
With PaaS solutions, you won’t have to worry about hiring developers to do maintenance of the software and make software updates regularly.
This will save you time and money in the long run.
PaaS solutions will update the online service marketplace platform software for you
Since software must constantly be improved, purchasing a PaaS solution is also beneficial because updating the marketplace software will be the responsibility of the PaaS company you choose to use.
You can typically also put in feature requests.
Do your research to find out which PaaS companies heavily invest in new features and system improvements, as this will vary by company. Make sure to ask them to give examples of features they’ve released in the last 6 months.
There’s a difference between saying you invest in new features, and actually doing it!
PaaS solutions allow you to customize the online service marketplace platform for your business
While a PaaS solution may not have customization features as flexible as building your own online marketplace platform, there are still ways to customize that will give you a lot of the features and personalization that you want.
PaaS solutions are typically always evolving and improving their marketplace features list as well.
Remember to do your research, some PaaS solutions are more customizable than others.
PaaS solutions may not fit your business perfectly
Not all PaaS solutions on the market today will perfectly integrate or suit your business needs.
Every PaaS company varies, so be sure to research to see which company will be able to fit your service business the best.
Some PaaS solutions are not user-friendly for clients and service providers
Online service marketplace platforms can be difficult to use depending on which one you choose.
- The software can be confusing, and not very user friendly for clients to navigate.
- The platforms can also have bugs, or make it hard to log back in and book subsequent services.
As a result, some of these leads never convert into sales because customers get frustrated and go off platform.
Remember, it’s not just about the sale...the entire process of rescheduling, making additional bookings all need to happen on the software.
Sometimes, a company that specializes in this type of marketplace software will have seen enough data and platforms to know how to convert more leads into sales and to build a product that will get customers to continuously use the site.
Consider that every PaaS company is different and that some options are more user friendly than others.
Ready to get started?
When it comes to starting an online service marketplace, deciding whether you should build vs buy your online marketplace platform is an important decision.
For complete customizability, building in-house or outsourcing to an agency is best.
But PaaS solutions are also becoming more sophisticated in how they integrate into your business and are offering more features for you and your customers.
There are many pros and cons to consider when it comes to building versus buying, so weighing all of these options carefully is going to be the key to your success!