Introduction: eCommerce in 2024
In just three decades, eCommerce transformed every aspect of retail globally, across industries―and continues to do so further. So, as more consumers prefer to shop online, brick-and-mortar retailers are pushing to add online channels to their sales. The eCommerce industry is progressing even faster than anticipated earlier.
Given the lucrative opportunity, more eCommerce marketplace launches happen globally. According to USAToday, there are 26.3 million eCommerce websites globally. Also with increased market maturity, these platforms continue to add to their capabilities. Moreover, symbiotically, the support infrastructure of payments, logistics, marketing, and other operational ecosystems is also growing.
Due to this progression of the industry, eCommerce marketplaces are now a complex mix of capabilities. Just notice the continuous increase in the file size of popular eCommerce apps on your devices. So, if you want to start an eCommerce business, will it be worth developing an eCommerce marketplace from scratch? Three decades ago the answer would have been a straightforward yes. But things change in such a long time, right? Read ahead to find out more.
Table of Contents:
What are the Components of an eCommerce marketplace?
Stages of eCommerce marketplace development
Cost of Custom eCommerce marketplace development
Pros and Cons of Custom eCommerce marketplace development
So is custom eCommerce development right for your business
The alternative: Use turnkey solutions
Build vs Buy in eCommerce: What are the differences?
Types of turnkey eCommerce marketplace solutions
Why self-hosted solutions are popular
Yo!Kart: Leading Self-Hosted Marketplace Solution
Case studies of websites built with turnkey solution Yo!Kart
What are the Components of an eCommerce marketplace?
An eCommerce marketplace appears to be a single unit. However, it is made up of certain key components. These include the look and feel of the website, its functionalities, and more. Let’s understand in detail below.
1. Front End of the Marketplace
It is the user-facing part of the eCommerce website. It further included the following elements:
User Interface or UI: This includes how the website appears to the users visually, including the logo, colors, fonts, and other design elements.
User Experience or UX: This is how users interact with the website including navigation, ease of use, design of buttons, page load speeds, and more.
Client-Side Scripting: All actions occur in the users’ web browser itself, without needing the server to get involved. (Javascript frameworks like React.js are used here)
2. Back End of the Marketplace
What do you think happens when a user clicks the buy button on an eCommerce marketplace? There is a functionality that takes the user through the checkout page. The backend of the platform initiates the checkout process. It validates the users’ session, confirms inventory availability, applies for applicable discounts/promotions, adds applicable taxes, and more. This is the platform backend at work.
In short, the backend carries out the functions of an eCommerce marketplace. It also includes managing the data and the business logic.
3. User Control Panels
For better functioning of the eCommerce marketplace, all users need to control and manage their activities on the platform. Established eCommerce platforms like Amazon offer dedicated user panels for all the platform participants. These include the Admin, sellers, buyers, affiliates, advertisers, and others.
4. Features and Modules
Features are the capabilities of the eCommerce platform. For instance, the search bar allows the users to search for the desired products/services. Similarly, eCommerce features cover business functions like marketing, promotions, sales, onboarding, analytics, inventory management, and more. Some features are essential like the search bar, and are needed across eCommerce platforms. However, some of these features vary according to the type of eCommerce marketplace platform.
5. Integrating Business APIs
Some business processes can be outsourced to other third-party solutions. For instance, shipping management, tax, accounting, and others. The API of these solutions has to be integrated into the eCommerce platform. In simpler terms, this creates a channel via which information flows between the platform and the third-party solutions, leading to automation. These API integrations vary according to the business needs. Similarly, payment gateways also need to be integrated.
6. Adherence to Security Protocols
Modern eCommerce websites have to be built to withstand attacks of malicious intent like hacking. Since user data is involved, the eCommerce marketplace platform must comply with regulatory requirements like GDPR. Moreover, it should restrict SQL injections, cross-site scripting, and other forms of forgery.
7. Sustained High Performance and Scalability
A future-ready marketplace platform should be built to perform well under increased user traffic, and the number of SKUs (listed products). This includes caching, database optimization, load balancing, and other considerations.
These are some of the major components of an eCommerce marketplace platform.
Launch an eCommerce marketplace with all the features you need
Stages of eCommerce marketplace development
These were the components of the eCommerce marketplace. However, your next consideration is knowing how the platform development will take place. While there is more than one way to develop a platform, let’s just know about the basic steps.
1. Planning: At this stage, the planning of the project is done including the scope and goals.
2. Requirement analysis: Collecting information from users, experts, and clients.
3. Design: Building the framework.
4. Coding: Writing the code according to the design.
5. Testing: Testing the code to identify and iron out bugs.
6. Deployment: Taking the software to the production phase, preparing documentation, and providing training to the users.
With this information, you know the components of the eCommerce marketplace and the process of developing them. Let’s address the elephant in the room, How much does eCommerce marketplace development cost?
Cost of Custom eCommerce marketplace development
Straight off the bat, there is no direct answer to this question. The figure can range drastically from $20,000 to $500,000, or even beyond. The reason why there is such a significant gap is because of multiple variables at play.
1. The scope of the project: Most eCommerce websites are fundamentally similar. However, if a business idea is unique, it takes longer.
2. The scale of the website: For instance the number of webpages.
3. Internal Integration: If there is a need for integrating ERPs, CRMs, and others.
4. A specific technology stack: Projects developed on popular technology stacks are more cost-efficient.
5. Choice of development: A team of developers can be hired, or the entire project can be outsourced.
6. Time Frame of the project: The deadlines shared by the client can affect price quotations.
7. Location of the development team: For instance, teams in countries like India or Vietnam have lower quotes than those in the US.
Consider these variables, the 7 components of the eCommerce marketplace, and the stages of development that were discussed in the sections above. Naturally, with so much at play, the time to develop ranges from a few months to more than a year. You will be billed hourly for the entire development process. Hence there is significant variation in the cost to develop an eCommerce marketplace.
Now that you know about eCommerce marketplace development, learn more about the practical aspect of this process.
Pros and Cons of Custom eCommerce marketplace development
For what it’s worth, there are benefits and disadvantages to adopting this approach. This means that the process lacks universal relevance. To know whether it’s the right process for you, read about its pros and cons.
The main advantage of custom eCommerce marketplace development is the capability to cover distinct use cases. Some of these are as follows:
Cover complex workflows. For instance, if you need to execute a complex sales process.
Digital Transformation of internal processes: Enterprises unwilling to change existing websites, internal CRMs, or ERPs, will need a custom marketplace developed around these solutions.
Specific tech stack: A tech stack is a set of technologies used to develop an eCommerce marketplace. The need for a specific tech stack generally arises from the above-shared use case, where the platform has to be developed around existing digital infrastructure.
Some industry verticals can need complex additional functionality in the marketplace. For instance, if you plan to build an online automobile marketplace, you may need to offer a virtual test drive experience.
That said, there are some disadvantages to custom eCommerce marketplace development. Some of these are as follows:
The need for extensive resources: As discussed above, developing an eCommerce marketplace costs more and can reach high figures.
Extended time: The time to custom develop an eCommerce marketplace is higher.
Startups unaware of a proven template for success, will have to depend on the research done by their development partners.
So is custom eCommerce development right for your business?
How does custom eCommerce development fit into your business plans? There are both advantages and disadvantages, but how do you put a personal perspective on that? All of these decisions will be part of your go-to-market strategy. Let’s add context from the perspective of an online business.
Evaluate the costs of an entire eCommerce business:
The total capital investment for a multivendor marketplace includes more than the marketplace development costs. Consider the following:
Marketplace development costs.
Set up fees/subscription fees for payment gateways and third-party business apps.
Mobile apps, if they are needed in addition to the eCommerce platform.
Hosting services or IT infrastructure.
Physical assets like office spaces, warehouses, and others (if required)
Manpower for day-to-day maintenance and Admin duties.
Startup consultation services, if required.
Marketing, Advertising, and Brand Building.
Legal and compliances
Other misc operational costs.
In short, your eCommerce marketplace development costs are just one of the multiple investments you need for the business. Many businesses find it difficult after stretching their budget for a few of these activities over others. Especially if you are bootstrapping for the project. Account for all these activities, and then prudently take a decision.
The importance of time to market:
The time to market will be a crucial component for your business. In the dynamic eCommerce industry, the time from when the idea for the business is conceived to the time actual sales happen from the platform can be pivotal. Competitor activity for one, can be essential to your decision. If your idea is unique, you need to be careful about any other market launch. Similarly, if there is existing competition, then their activity will be the cornerstone of your time-to-market strategy.
Additionally, there is an aspect of funds. If investors are also stakeholders, they can initiate urgency depending on the market scenarios. If you are bootstrapping the funds, you are blocking your assets till you reach the break-even point. So quick movement is again, essential. So the time taken for custom eCommerce development has to be gauged carefully. If the development time delays the ideal time-to-market then a decision can be taken otherwise.
The alternative: Use turnkey solutions
Custom eCommerce development has a significant involvement of time and resources. If the business plan does not gain much from the advantages, there can be a risk of losing a competitive edge. So, what is the solution?
Since most eCommerce businesses are fundamentally similar, custom development can be rendered redundant. There are turnkey solutions available that allow you to build an eCommerce marketplace. These are pre-built solutions, developed to mimic popular eCommerce platforms like Amazon, Alibaba, or Etsy.
When compared to developing from scratch, these solutions come at a fraction of the total cost. You won’t have to cut corners with features/modules either. Depending upon your choice, turnkey solutions make multiple cutting-edge functionalities accessible on a low budget.
So essentially, you are not building the platform, you are buying it.
Choose a leading turnkey solution to power your eCommerce business
Build vs Buy in eCommerce: What are the differences?
Now that you have an understanding of custom eCommerce development, let’s compare build vs buy: which is the best eCommerce development approach for you.
Parameters
Build
Buy
Cost to develop
Higher
Lower
Cost Estimation
Can vary as per project
More predictable
Deployment
Slower
Faster
Time to Market
Slower
Faster
Battle-tested
No
Yes
Features Availability
Lesser in the budget
More in the budget
Choice of Tech Stack
Yes
No
Distinct complex workflows
Part of the process
Additional Customization
Types of turnkey eCommerce marketplace solutions
On a broader level, turnkey solutions have the advantage of affordability and time. However, these solutions also vary among each other. While all of these will still have these advantages over bespoke development, that degree of advantage varies. Find out more about this variation below.
Open Source Solutions:
Pre-built solutions that cover some essential parts of eCommerce. However, these are not complete and will need customization. They can be downloaded and customized to get the final platform. This customization can be done from a custom development team that specializes in their customization. In a way, this is the middle ground between custom development and other types of readymade solutions.
Eg: Prestashop
Pros:
Flexibility
Advantage of cost and time over custom development
Cons:
Require extensive customization.
Suitable for middle to large businesses.
SaaS-Based Solutions:
These are pre-built solutions already hosted by the providers themselves. Business owners have to pay a rental (subscription) fee to get access. After subscribing, they get a username and login. This is valid only till they continue to pay the subscription fee. This approach is the other end of the spectrum, which offers very minimal control to the business owners to tailor the solution.
E.g. Sharetribe
Pros:
Minimal involvement is needed from business owners to launch the eCommerce platform.
One of the easier approaches to test the MVP of the business idea.
Cons:
No ownership of the solution or the user data.
Recurring costs add long-term overheads for the business.
Self-Hosted Solutions
These are readymade solutions that offer ownership of the software copy. Business owners can purchase the license for use, get a copy, and install it on a server of their choice. So, these are complete solutions like SaaS-based and give flexibility like open source.
E.g. Yo!Kart
Pros:
Complete control with software ownership and user data ownership.
Some self-hosted solution licenses are offered with just a one-time payment.
Cons:
Hosting has to be managed by the business itself.
Why self-hosted solutions are popular
While all types of turnkey solutions have pros and areas of application, self-hosted ones dominate the market with more holistic benefits and wider areas of application. There is a need for initial installation services. However, once that is managed, self-hosted solutions give businesses complete control over their online platform. They offer benefits like the following:
Customization advantage: In the scenario of the platform needing personalization, self-hosted solutions give you the advantage of lifetime ownership of the hours invested.
Competitive advantage: Businesses planning to enter a congested eCommerce niche have the freedom to stand out in the crowd with unique functionalities.
Integration with existing infrastructure: With capabilities to alter the source code, businesses or enterprises with existing infrastructure have more opportunities with self-hosted solutions.
Audit Capabilities: With the availability of source code, self-hosted solutions also give the benefit of auditing the code to determine platform health.
Price Advantage: eCommerce today is competitive and consumers expect the best prices. Self-hosted solutions can come with lesser overheads, allowing online businesses to push for a competitive pricing strategy.
Yo!Kart: Leading Self-Hosted Marketplace Solution
Yo!Kart is a leading self-hosted eCommerce marketplace solution. Powering 5500+ marketplaces, Yo!Kart is used by startups and Fortune 500 companies, across multiple industries, and covering all continents. These are some of the highlights of Yo!Kart:
A range of eCommerce features OOTB.
Pre-integrated business APIs and payment gateways.
Lifetime license is available with a one-time payment.
Supports downloadable digital goods and has a dedicated online B2B marketplace solution.
Availability of native mobile apps.
Source code is available.
Case studies of websites built with turnkey solution Yo!Kart
Yo!Kart is a versatile eCommerce marketplace solution. It has ready-made capabilities to power an eCommerce marketplace platform right out of the box. However, it is also customizable, making it equally suited for personalized eCommerce platforms. Moreover, it is tested to offer high performance under load, for high-traffic websites. Some examples of these use cases are shared below:
UNI Diamonds – Custom Yo!Kart-powered platform with industry-specific functionality
By default, Yo!Kart is a turnkey solution to build an eCommerce marketplace like Amazon. However, it was customized to build the world’s first diamond trading platform: UNI Diamonds. To make this happen, Yo!Kart was customized to add features for the industry.
Procurenet – Custom Yo!Kart-powered platform with high-scale
Procurement is a B2B eCommerce platform for the pharma sector. Since the project required to be made live in a shorter time frame. The customization was done within the stipulated time. Moreover, Procurement currently hosts over 2 million SKUs, capable of hosting even more.
A1 Vendor – Vanilla Yo!Kart-powered platform
A1 Vendor is an eCommerce platform based out of Jamaica. Like many other eCommerce marketplace platforms around the world, it leverages out-of-the-box functionalities of Yo!Kart to make a market impact.
Start the next big eCommerce business with a power-packed solution
Conclusion
So in 2024, while custom eCommerce marketplace development can potentially help you in curating complex workflows/tasks. However, it comes with significant costs, time investment, and risks. For the majority of businesses, especially those looking to enter the market quickly, turnkey solutions like Yo!Kart provide an attractive alternative. These platforms offer a balance between flexibility and affordability, allowing businesses to launch their marketplace with a solid foundation while still catering to industry-specific needs.
The case studies of UNI Diamonds, Procurenet, and A1 Vendor demonstrate the adaptability and scalability of Yo!Kart. They demonstrate its ability to cater to a wide range of requirements, whether you need a fully customized or ready-to-launch eCommerce marketplace platform. While the final decision will depend on your business goals, resources, and timeline, for most entrepreneurs and enterprises, the comprehensive features, scalability, and cost-effectiveness of Yo!Kart makes it a compelling choice for launching a successful eCommerce marketplace platform.
FAQ
Q 1. When do I need custom eCommerce marketplace development?
Ans: The variations are mostly about specific requirements. For example, if an enterprise has legacy software for internal communication. The eCommerce marketplace has to be developed around it. Or if the business wants to use a specific technology stack for the development. Another example can be the needs of a specific industry. But all of these are very subjective to the needs of the business.
Q 2. What are the main challenges of developing an eCommerce marketplace from scratch?
Ans: Developing an eCommerce marketplace platform from scratch can be a time-consuming and resource-intensive process. Moreover, there is a need for extensive technical expertise, knowledge of the industry, longer development timelines, and a higher overall project cost.
Q 3. What is the cost to develop a custom eCommerce marketplace?
Ans: The cost of developing a custom eCommerce marketplace can vary widely depending on several factors like the complexity of the features needed, the technology stack you opt for, project urgency, the development team’s location & quoted hourly rates, and more. Costs can range from $20,000 to about $500,000.
Q 4. Should you build or buy your eCommerce marketplace?
Ans: The choice to build or buy your eCommerce marketplace depends upon your business requirements. Building the eCommerce marketplace gives you control over aspects such as the technology stack, integrating legacy processes, and others. However, buying the eCommerce marketplace gives you a competitive edge with faster time to market, less resource utilization, and capabilities to get more for the available resources.
Q 5. What are the benefits of self hosted turnkey eCommerce solutions?
Ans: Turnkey self-hosted solutions like Yo!Kart offers a faster time-to-market, lower initial one-time cost, and built-in eCommerce features. They also provide scalability, flexibility, and the ability to customize the platform to suit specific business needs. Furthermore, such solutions offer complete user data ownership and the need for higher security.
Q 6. Can Yo!Kart be customized to fit industry-specific requirements?
Ans: Yes, Yo!Kart is a highly customizable eCommerce marketplace solution. It can be tailored to meet industry-specific needs, as in the case studies of UNI Diamonds, Procurenet, and others where the solution was customized for unique business functionalities.
The post Is It Worth Developing an eCommerce Marketplace from Scratch? appeared first on FATbit Blog.
If you plan to start with an eCommerce marketplace business, custom eCommerce marketplace development would seem the default option. But given the competitive eCommerce market, will it justify the time and costs? What are the options available?
The post Is It Worth Developing an eCommerce Marketplace from Scratch? appeared first on FATbit Blog.
Amazon’s Foray into Entertainment: From Prime Video to MGM Acquisition
Amazon’s journey from a humble online bookstore to one of the world’s most powerful companies is a well-known story. However, its foray into the entertainment industry, which began with the launch of Amazon Prime Video and culminated in the acquisition of MGM, is a compelling narrative that illustrates the company’s ambition to become a dominant force in every aspect of modern life. This article delves into Amazon’s entertainment strategy, exploring how it has evolved, the significance of key milestones like the MGM acquisition, and the broader implications for the entertainment industry.
The Genesis of Amazon Prime Video
Amazon’s entry into the entertainment sector was a calculated move, born from a desire to enhance its ecosystem and drive customer loyalty. The launch of Amazon Prime Video in 2006 was initially part of the Amazon Prime subscription service, which offered members faster shipping for an annual fee. The addition of streaming video content was a strategic decision aimed at increasing the value proposition of Prime membership, thereby encouraging more customers to sign up and stay within the Amazon ecosystem.
At its inception, Prime Video was a relatively modest offering, featuring a limited library of licensed films and TV shows. However, Amazon quickly recognized the potential of the streaming industry, especially as competitors like Netflix and Hulu were gaining traction. The company began to invest heavily in acquiring more content and, crucially, in producing its own original programming.
The Rise of Amazon Studios
The establishment of Amazon Studios in 2010 marked a significant turning point in the company’s entertainment strategy. Initially, Amazon Studios took an unconventional approach to content development by inviting aspiring filmmakers and writers to submit scripts and project ideas. This crowdsourcing model was innovative but ultimately unsustainable, leading Amazon to pivot toward a more traditional production model.
In 2013, Amazon Studios made its first major splash with the release of Alpha House and Betas, two original series that were well-received but did not achieve widespread popularity. The real breakthrough came in 2014 with Transparent, a drama series that received critical acclaim and won multiple awards, including a Golden Globe. Transparent established Amazon as a serious player in original content production, paving the way for future successes like The Marvelous Mrs. Maisel, Fleabag, and The Boys.
Amazon’s investment in original content has been substantial, with billions of dollars poured into production each year. The company’s willingness to spend big on high-quality programming reflects its commitment to becoming a leader in the entertainment space. However, content production is only one piece of Amazon’s broader entertainment strategy.
The Acquisition of MGM: A Game-Changing Move
Amazon’s $8.45 billion acquisition of MGM in 2021 was a bold and significant step in its entertainment journey. MGM, one of Hollywood’s most iconic studios, boasts a vast library of content, including the James Bond franchise, Rocky, The Handmaid’s Tale, and thousands of other films and TV shows. The acquisition was not just about adding content to Prime Video’s library but also about gaining valuable intellectual property (IP) that could be leveraged across Amazon’s various platforms.
For Amazon, the MGM acquisition provided a treasure trove of content that could be used to attract new subscribers, retain existing ones, and compete more effectively with other streaming giants like Netflix, Disney+, and HBO Max. The move also underscored Amazon’s broader strategy of integrating its entertainment offerings with its other services, creating a seamless ecosystem that keeps customers engaged and loyal.
The acquisition was met with a mixed response from industry analysts. Some viewed it as a savvy move that would strengthen Amazon’s position in the highly competitive streaming market. Others, however, questioned whether the price tag was justified, especially given the challenges of integrating a traditional studio like MGM into Amazon’s tech-driven corporate culture.
The Broader Implications for the Entertainment Industry
Amazon’s aggressive push into entertainment has had significant implications for the broader industry. The company’s deep pockets and willingness to spend have forced traditional studios and other streaming platforms to rethink their strategies. The rise of streaming has already disrupted the traditional film and television business models, and Amazon’s entry into the space has accelerated this transformation.
One of the most notable impacts has been the escalating “streaming wars,” where companies are competing fiercely for content and subscribers. Amazon’s willingness to invest in original content and its acquisition of MGM have raised the stakes, prompting other companies to make similar moves. Disney’s acquisition of 21st Century Fox and WarnerMedia’s merger with Discovery are examples of how traditional media companies are consolidating to better compete in the new landscape.
Moreover, Amazon’s integration of entertainment with its broader ecosystem—ranging from e-commerce to cloud computing—represents a unique approach that other companies are beginning to emulate. The ability to cross-promote content across multiple platforms, offer exclusive deals to Prime members, and leverage data analytics to tailor content to individual preferences gives Amazon a competitive edge that few can match.
However, Amazon’s growing influence in entertainment has also raised concerns. Critics argue that the company’s dominance in multiple sectors, including retail, cloud computing, and now entertainment, could lead to antitrust issues. There are fears that Amazon’s expansion into entertainment could stifle competition, reduce diversity in content, and concentrate too much power in the hands of a single corporation.
The Future of Amazon in Entertainment
Looking ahead, Amazon shows no signs of slowing down its push into entertainment. The company continues to invest heavily in original content, with upcoming projects like the highly anticipated The Lord of the Rings series, which reportedly cost over $1 billion to produce. Amazon is also exploring new ways to integrate its entertainment offerings with its other services, such as bundling Prime Video with other Amazon subscriptions and offering exclusive content for Alexa-enabled devices.
Additionally, the MGM acquisition opens up new possibilities for Amazon to expand its content offerings, including potential reboots, spin-offs, and new franchises based on MGM’s extensive library. The acquisition also positions Amazon to be a major player in the licensing and distribution of content, giving it more leverage in negotiations with other studios and platforms.
In conclusion, Amazon’s foray into entertainment, from the launch of Prime Video to the acquisition of MGM, is a testament to the company’s ambition and vision. By investing in original content, acquiring valuable IP, and integrating its entertainment offerings with its broader ecosystem, Amazon has positioned itself as a formidable player in the entertainment industry. As the streaming wars continue to heat up, Amazon’s role in shaping the future of entertainment will be one to watch closely.
