Peer-To-Peer marketplaces: All you need to know to launch a scalable marketplace with P2P business model

Nov 11, 2021·11 min read

Peer-to-peer marketplaces are one of the most popular business models nowadays. In this article, we dive deeper into details. How does a P2P marketplace work? How to attract users to a beginner platform? How to build a successful peer-to-peer marketplace from scratch? All these questions are answered here!


This story started 14 years ago when an entrepreneur put a broken laser pointer up for sale on a small auction website. Can you believe someone bought such a useless thing for $15? Yes, it turns out that there are people who collect broken laser pointers and are ready to spend their money on auctions like this. The story that seems so trivial but amusing describes the first steps to success taken by one of the world’s richest business owners. The person that started the auction is Pierre Omidyar, the billionaire and the founder of eBay peer-to-peer marketplace.

Such stories shock and inspire. This is the type of experience any modern entrepreneur dreams about.

Looking for their ways to success, business owners worldwide strive to be aware of all the cutting-edge technologies and innovations. They look for the most viable niche and consult with trendsetters on how to launch a business that will outmatch all the similar ones. This is how they come to the P2P business model.

Nowadays, using the power of the internet you can make money from things you don’t own. Just think about it:

  • Airbnb suggests staying at one of 4.5 million properties worldwide while owning none of them.
  • Uber the ride-sharing startup, gains money from organizing trips without actually having to invest in these trips or vehicles.
  • Upwork demonstrates myriads specialists’ profiles while working with none of them.

Recently, when our software builders were working on Toddy marketplace and Creadoor platform, we had an opportunity to dive into the P2P marketplace topic. We clarified its specifics for our client, studied the most successful use cases, and delivered an impeccable programming solution. Today, we are ready to share our experience, vision and best practices on how to break into the market of the future.

What is a P2P marketplace?

We believe the best way to start our journey is to explain the definition and have a glance at some basic meanings.

A peer-to-peer e-commerce platform is a trend in marketplace software development. It is a website where individuals that provide products or services meet potential consumers or customers. The platform detracts the difference between them; thus, the parties can exchange their roles. For example, you can lease your NY apartment on Airbnb and book a room with a delightful view somewhere on the Amalfi Coast at the same time. You play two roles simultaneously using the same platform.

On marketplaces like Airbnb, consumers and product providers communicate directly. This leads to significant improvements in terms of cost, transaction time, convenience, etc.

P2P e-commerce platform vs. typical online store

As our experience shows, this is a topic that bothers e-commerce newcomers greatly. We decided to add this chapter to the article so you can build a better picture of how things look.

Let’s say you are a craftsperson and handmade jewelry designer. You love your work, and you love your small but convenient traditional shop somewhere downtown, but you’d like to extend the horizons and bring your business to a higher level. No doubt, there is no better way to do it than to start an internet business. And now, the question appears: what to choose – a peer-to-peer marketplace platform to post your listings on, or an online shop built from scratch? Both options are acceptable and potentially profitable. We have to admit that the choice depends on your business specifics.

There’s a critical difference between an online marketplace and a web store: the number of potential buyers.

First of all, you need to get ready to invest time and money into web store development. Keep in mind that custom development may cost you a fortune. On the contrary, online marketplaces are already built and waiting for your products.

Once you as a manufacturer launch your web store, you need to work hard to spread information about your products, promote your business using SEO and SMM, increase conversion rates, and attract your first customers. With a P2P platform, this problem doesn’t exist. Coming to a marketplace, you don’t need to spend time looking for the buyers; they're already waiting there for your products. Besides, there are many more interested buyers than you can potentially attract to your brand’s online store.

Online marketplace vs web store

Sellers love peer-to-peer marketplace software due to the enormous number of buyers they can present their products to, while buyers love it because of the wide choice and the chance to compare it all on one single web channel. Hence, when looking for a viable niche, you should consider investing in a marketplace as a potentially profitable option.

Top 4 reasons P2P business models are superior

Modern online marketplaces’ revenue grows annually. Websites like Etsy demonstrate exceptional results. Let’s define some clear-cut reasons for such success. These are also the reasons you can rely on when deciding to build a similar platform:

Financial advantages

Peer-to-peer marketplace software allows you to make a profit with minimum effort. There is no need to set up production or worry about shipping issues; your task is to launch a software solution, add exceptional functionality, and attract your first visitors. After that, they will do all the rest for you. You can focus on marketplace improvement while the sums in your bank account grow.

Convenience and flexibility

Earlier, we mentioned that both customers and sellers like using a marketplace website. But what advantage do you as a marketplace owner get out of this fact?

  • Marketplace visitors attract each other: high-quality products manufacturers make customers turn their heads toward your website, and sellers come to your marketplace due to a constantly growing number of potential buyers. This is why your marketing campaigns are more efficient than they are with independent web stores;
  • You can change industry, niche, or marketplace specifics anytime you want: you don’t produce any goods and you don’t invest in manufacturing so you have the flexibility most businesses can only dream about.

Hassle-free development

We live in the IT era. The number of IT engineering companies that can deliver a superb software solution for you can hardly be overestimated. Thus, even if you are not a tech-savvy person, you can simply delegate development and testing tasks to an outsourcing team with a background in online marketplaces development.

Feedback-based quality

Although you are not the one who is responsible for product quality, you can provide shoppers with premium-quality goods and services using your marketplace’s functionality! Let the customers evaluate the products they buy, develop a rating system, and allow them to post text, photo, and video reviews to experience one more significant advantage. You are able to provide feedback-based quality of products using P2P business models.

These factors have the potential to boost any e-commerce business. By investing in P2P solutions, you gain an opportunity to level-up your company and make higher profits than ever before.

Key functionality to add to your striking P2P marketplace

Even though P2P marketplaces are extremely viable and potentially profitable, only some of them can demonstrate the desired results and bring value to the owners.

What features are inevitable for your specific marketplace platform?

Discuss the question with our industry expert

Discuss the case

Make sure your peer-to-peer marketplace business plan includes a chapter devoted to these features:

User profile

Both parties of cooperation should have an opportunity to create profiles with no hassles, as quickly and easily as possible. Customers’ and sellers’ user interface (UI) should differ, and so should the information users need to provide and operate with.

Quick tip: On your peer-to-peer marketplace software, enable users to export the data from their social media profiles to save time and simplify the sign-in process.

Product listings

This feature allows for adding products or services to the website. Providers should be able to add, remove, edit, publish and delete items. In turn, customers can review, comment on, and rate items.

Quick tip: Allow vendors to customize their listing. This will help them to identify their brand and, in turn, increase their loyalty. By the way, this is also a popular marketplace monetization model.


Whether your marketplace offers products for sale or for temporary use, you need to launch a simple checkout page for customers.

Quick tip: Implement the best UI/UX approaches to make your checkout page simple, clear, and intuitive.

Payment functionality

Customers need to pay for their purchases or bookings right on your marketplace. At the same time, to make your profit you should deal with payment functionality, too. This is a crucial element, and here, the integration with different payment gateways or other open sources tools will be great. You can even implement some elements of blockchain in your website!

Quick tip: Talking about payment, you should pay extra attention to security and proper payment regulations. Escrow service may be handy: It helps buyers and sellers to build trusting relationships and makes sure both parties fulfill their obligations to make a successful financial deal. The system collects the customer’s payment and keeps it until the product or service is successfully delivered. After that, the system transfers money to the seller.


This feature is an excellent way to create a sense of trust and filter the providers on your marketplace: Those that get positive reviews and high ratings will stay, and the ones who demonstrate lower quality will fail the competition.

Quick tip: Always read the reviews, try to understand existing customers’ needs and wishes more accurately, and improve your marketplace according to expectations.

Notification system

To speed up the processes and make the communication between the parties seamless, build notification functionality.

Quick tip: Offer the opportunity for marketplace users to choose the most convenient channel to get notifications from the system. Provide not only peer-to-peer marketplace app notifications but also suggest sending updates to the user’s email, favorite messenger, phone, etc.

Key functionality for a p2p marketplac

4 insights on how to build a P2P marketplace with minimum risks

Though the ecommerce industry shows great potential and presents impressive statistics, it is not so easy to succeed in P2P business. Due to intense competition, you need to discover more ways to show that you are better than everyone else. There are so many great minds that present great ideas and you need to follow a special approach to reach your desired goals.

Here are some tried and tested ways to run a profitable P2P business.

Attract users from the start

The main feature of a peer-to-peer marketplace platform is high accessibility. This means every internet user can become an entrepreneur with several clicks of a mouse and a good connection. And you need to use this feature to make your profit from the start.

To attract your very first users, lower the access barrier.

Ask for basic information only and simplify registration. Later on, when it comes to transactions, you can use the chance to check users' identity and make sure they are real and reliable. But before that, provide first customers and sellers with benefits like gifts and coupons, let them use extended functionality, and do your best to win their attention.

A tried and tested trick is to launch a landing page with the announcement, advertising, and marketplace description. Here, you can offer attractive early-bird bonuses and collect potential customer data. Later on, when you produce a ready-made marketplace, you will already have a customer base!

Another useful tip is to offer benefits for each feedback shared on social media.

Make potential users love your marketplace platform from the moment they enter it.

Optimize the experience

Unlike brick-and-mortar stores, you don’t need to invest in physical assets or employee salaries. The primary thing you need to invest in is user experience. Here, we mean financial investments together with time and brainstorming. First of all, look at your marketplace with users’ eyes, understand their wishes and demands, and decide how to cater to them in the best way.

The first challenge you may face is that there are two sides of cooperation: service or product providers and consumers or customers. Let’s take a look at an example.

You plan to launch one of the P2P online marketplaces where publishers and authors can sell their ebooks to the readers directly.

  • Publisher’s point of view: Admin needs to have a powerful toolkit for uploading, publishing, and promoting books. It is more convenient to handle such tasks on a big screen. We can assume that publishers will use laptops or even PCs. This is why the publisher’s side of UI/UX design should be optimized for large screens.
  • Reader’s point of view: A person wants to read a book on an electronic device. This is the only purpose; this is why he or she comes to your marketplace. What is the most convenient device on which to read an ebook? This may be a Kindle reader, a tablet or a smartphone. In this case, a development team should optimize an online solution for small screens, improve touchpad performance, etc.

Solve your marketplace users’ problems before they even appear.

Think about your revenue

Your marketplace is about your profit. Thus, monetization is another thing you need to think about before you start. Typically, a marketplace owner gets a fee from each transaction.

The point is to make communication and transactions possible within the peer-to-peer marketplace website only.

If you leave a gap so parties can communicate via another channel, you may lose your profit. By hiding the contact details and not allowing consumers to contact the sellers directly, you save your chance to get a piece of a pie.

To make everything right, follow these steps:

  • Enable sellers to provide as much information about a product as they can;
  • Augment text descriptions with photos and videos;
  • Add a chat engine to your P2P lending;
  • Regulate the relations between the parties and ensure trustworthiness;
  • Provide great security features; and
  • Offer insurance.

In this case, Upwork is one of the inspiring peer-to-peer marketplace examples. Here, freelancers and their specialists find so many useful features that no one is interested in building business relationships outside the platform.

Give your customers enough reasons to stay with you.

Don’t stop getting better

Continuous improvement is the only way to success. Thus, you need to produce a highly scalable platform and upgrade it with valuable functionality from time to time.

How do you develop an improvement program?

  • Keep an eye on the balance between sellers and buyers. The number of buyers should always be high enough to make manufacturers provide better products and services. And once you notice demand decrease, look for new customers and offer new extra opportunities.
  • Collect information about your platform’s users. The more you know about them, the more chances you have to attract them with unique offers.

Cost to build an online marketplace consist of multiple components. As your platform grows, you need to invest more to scale the app, increase your revenue and grow the user base. Never stop on your way to success and deliver better features each time.

Building a P2P marketplace as the next stage of your business development

Peer-to-peer ecommerce products have launched a new era in the world’s trading system. They are the key components of the sharing economy. This means P2P marketplace development isn’t just something that can bring you earnings right after you launch a solution. This is your chance to surf the wave that will wash over the world’s economy.

The point is to brainstorm a unique idea and find your place in a viable niche, build cooperation with competent IT engineers, and launch a product as soon as possible to be ahead of competitors from the very beginning.

Are you ready to turn your P2P marketplace idea into reality?

We are ready to consult you about the first steps in this business

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