For IT decision-makers, project managers, and executives, the question of the costs involved in the technical development and operation of an online marketplace or multi-shop system is of crucial importance. Investing in such a platform can offer significant advantages – from opening new revenue streams to optimizing business processes and enhancing customer loyalty. However, the costs for developing, implementing, and operating such a platform are complex and vary greatly depending on the requirements and chosen implementation strategy.
There are essentially two implementation strategies: in-house development or custom development by a service provider, and the use of a Software as a Service (SaaS) solution. Hybrid models can also be found.
At Platoyo, we specialize in providing omnichannel platforms like online marketplaces and multi-shop systems as Software as a Service (SaaS), with over 12 years of experience. With our expertise and market knowledge, we aim to give you a realistic overview of the expected costs and help you make an informed decision for your project.
What costs are involved?
The costs for creating an online marketplace depend on various factors, such as project complexity and specific requirements. However, every online marketplace or multi-shop system essentially requires the same core functionalities. We will go over these functionalities below. We indicate the effort in person-days, which you can then multiply by your internal or external rates. The smaller value represents a Minimum Viable Product (MVP, an initial product version with essential core functionalities), while the larger value reflects a Lovable Product (a development stage that truly brings joy to users).
We have divided the incurred costs into the planning, development, and operational phases. Here's an initial overview.
1. Planning Phase
Concept & Planning
In the initial phase of a marketplace project, the focus is on clearly defining the requirements, conducting market analysis, drafting technical specifications, and setting the strategic direction of the platform. This phase is crucial for the long-term success of the project as it lays the foundation for subsequent development.
- Effort: 10 - 100 person-days
- Typical tasks: Consulting, market analysis, drafting a requirements specification, business and IT strategy.
Project Management
Project management sets timelines, resources, and milestones to ensure that the development of the online marketplace progresses efficiently and on schedule. It coordinates all participants and minimizes risks such as budget overruns, which are key to the platform's long-term success.
- Effort: 120 - 300 person-days
- Typical tasks: Scheduling and budgeting, coordination and communication.
UX & UI Design
An engaging and user-friendly UX and UI design are essential to retain users and ensure the long-term success of the marketplace. The layout is created, mobile optimization is carried out, and an intuitive user experience is developed. These tasks often begin in the planning phase and seamlessly transition into the implementation phase to ensure continuous design oversight throughout the process.
- Effort: 30 - 150 person-days
- Typical tasks: Basic layout, click flows, wireframes, CI & logo development, mobile-first design.
2. Implementation Phase
The actual programming and technical implementation constitute a significant portion of the costs. Developing an online marketplace or multi-shop system requires not only backend and frontend developers but also the integration of external services such as payment providers, logistics solutions, or CRM systems.
Product Data Import
During product data import, product information from various sources is integrated into the system, requiring the setup of interfaces. This step is crucial because well-designed processes ensure consistent data, save time, and minimize manual errors in product management.
- Effort: 70 - 140 person-days
- Typical tasks: Core system, PIM data import, importing inventory and pricing data from ERP systems, mapping system for product categories, error management.
Frontend
The frontend is the user interface of an online marketplace and largely determines the user experience. It includes key elements such as product search, shopping cart, product pages, and delivery options. An intuitive design, fast load times, and additional features like seller profile pages, brand pages, and voucher integration improve user satisfaction and increase sales.
- Effort: 200 - 420 person-days
- Typical tasks: Search, product detail page, shopping cart, delivery options, local delivery options, product lists, seller profile pages, seller lists, voucher integration/management, service detail pages, simple appointment tool, brochures, brand pages, contact form, legal notice, terms & conditions, cancellation form per seller.
Payment
A key component of the marketplace is the payment system. Smooth integration of various payment methods ensures a hassle-free shopping experience and increases transaction completion rates. High security standards and fraud protection are essential.
- Effort: 120 - 240 person-days
- Typical tasks: Multi-seller capability (Bafin compliant), seller onboarding, API management for purchases & returns with the payment provider, error management, cash management/transfers.
Backend
The backend is the technical backbone of the marketplace. It manages data administration, functionality, and integrations, ensuring smooth operations and efficient processes.
- Effort: 330 - 860 person-days
- Typical tasks: Self-service for seller profiles, order confirmation process, return registration, shipment tracking, order billing, dashboard with statistics, brand management, filter configuration for search, user role system, content management system.
Infrastructure
The infrastructure of an online marketplace includes servers, hosting, and networks that ensure smooth operation. Scalable solutions and cloud hosting handle peak loads, prevent downtime, and ensure high availability of the platform.
- Effort: 150 - 350 person-days
- Typical tasks: Caching system, server setup, search index, email sending management, server monitoring systems, error logging, domain management, SSL certificates for multiple domains, interface infrastructure.
Marketing
Marketing for an online marketplace includes integrating product data exports and feeds for various online platforms as well as integrating email automation systems and affiliate networks to increase reach, visibility, and customer engagement.
- Effort: 50 - 210 person-days
- Typical tasks: Core system for product data exports, Google Shopping feeds, Idealo feeds, Facebook/Instagram feeds, Pinterest feeds, integration of email automation system (e.g., Brevo or Mailchimp), integration of affiliate systems (AWIN, Idealo, Webgains).
Adapting to legal requirements
Another critical aspect is meeting legal requirements, especially in areas such as data protection (GDPR), terms and conditions, and usage agreements. Besides the many technical implications, companies often hire external lawyers or data protection officers to ensure that all regulations are properly and fully implemented.
- Technical effort: 100 - 160 person-days
- Lawyer effort: 10 person-days
- Typical tasks: Platform tax transparency law, Digital Services Act, General Product Safety Regulation (GPSR), digital accessibility, legal advice, drafting terms and conditions, privacy and usage agreements.
3. Operational Phase
Server and hosting costs
Once the platform is operational, the technical infrastructure must be maintained to ensure the smooth functioning of the marketplace. This includes cloud hosting, server capacities, security certificates, and backups. Scalability plays a crucial role in efficiently managing peak loads.
- Cost range: 500 – 5,000 EUR per month
- Typical tasks: Cloud hosting for the application, databases and search indices, server capacities, bandwidth, SSL certificates, monitoring systems.
Legal Protection
The legal framework for e-commerce and marketplaces is becoming increasingly complex, making ongoing and careful consultation with lawyers essential to ensure that all legal requirements are met and legal risks are minimized.
- Cost range: approx. 1-2 person-days per month
- Typical tasks: Legal consultation, drafting terms and conditions, privacy and usage agreements.
Maintenance and Updates
After launch, the platform must be continuously maintained and regularly updated with security patches and new features. These ongoing costs should not be underestimated, as they will continue throughout the lifecycle of the platform.
Moreover, new legal requirements must be implemented regularly. Current examples include the Platform Tax Transparency Law, the Digital Services Act, the General Product Safety Regulation (GPSR), and requirements for digital accessibility.
- Cost range: 40-200 person-days per month
- Typical tasks: Regular maintenance, security updates, bug fixes, implementing legal requirements, feature expansions.
In-house development vs. software as a service (SaaS): A cost comparison
Many companies face the decision of whether to implement such a project through in-house development or use a software as a service (SaaS) solution. Both approaches have their pros and cons, which are also reflected in the costs.
In-house development
- Setup costs: 1,000 – 3,000 person-days
- Ongoing costs per year: 500 – 2,400 person-days + at least 10,000 EUR for hosting
- Disadvantages: Very high initial investments and ongoing costs. A minimum of 12 months development time, long time-to-market, high planning and implementation risks, internal dependencies.
- Advantages: Full control, own IT asset, high flexibility, no external dependencies.
Software as a service (SaaS)
- Setup costs: starting from 0 EUR (depending on contract duration and custom requirements)
- Ongoing costs per year: depending on project size (starting from 12,000 EUR per year; including maintenance, updates, hosting)
- Disadvantages: Less flexibility, dependence on external partners.
- Advantages: Lower costs, faster time-to-market, access to experienced experts, no planning risks, no dependence on internal partners.
How to best manage dependency is discussed in detail in our blog post: Is it worth building your own online marketplace or multi-shop system with your internal IT team?
Our Conclusion
Building your own online marketplace or multi-shop system is a complex and costly endeavor. The decision between in-house development or using a software as a service (SaaS) solution should be carefully considered.
SaaS Solution
Software as a service (SaaS) solutions are generally faster, more complete, and more cost-effective. This allows you to focus your budgets, attention, and time on your core business while the technical side is handled by experienced specialists.
In-house Development
In-house development offers full control and flexible customization, which can be beneficial for specialized projects. However, it requires significant investments in personnel, infrastructure, and ongoing training. Companies need to build their own development teams, leading to high ongoing costs and a longer time to market. Additionally, there’s a risk that technical and legal changes may become difficult to manage in the long term.
🚀Let us help you make the right choice!
For companies, it is crucial to consider long-term goals and the planned scope of the project to make the right decision. At Platoyo, we are happy to advise and support you in choosing the best solution for your needs. Just book a call with our team here: Meet Platoyo
