How To Build A Service Marketplace

How To Build A Service Marketplace

The usual e-commerce sites can conveniently be classified as online marketplaces. These e-commerce sites not just offer products but even services too in connection with multiple third-parties, whereby the transactions are effectively handled by the marketplace operators. A service marketplace resembles an e-commerce site platform that coordinates, initiates, and finalizes purchasing and selling of services among the service provider and the seekers.

An online service provider possesses unrestricted reach to the marketplace. Some recognized instances of online marketplace service providers are Fiverr, Freelancer, UrbanClap, etc.

What Is A Service Marketplace?


A service marketplace constitutes an internet-based platform which inaugurates, coordinates, supports and finalizes purchasing and selling of services amongst service providers and service seekers. Service marketplaces serve specific niches. For example, Freelancer, Guru, etc., are recognized for their professional design and writing services. Marketplaces like deal with child and elderly care providers. Marketplaces like TaskRabbit, Thumbtack cater to laborers and professional service workforce.

Features Of Service Marketplaces

These are the features you will require from the first day of your service marketplace.

User Profiles

User profiles are especially important for service marketplaces since providers are employing them to develop their individual, professional brand. They probably want to include the maximum possible content: descriptions of themselves and their photos, certificates, testimonials, services, and likewise.

Both the customers and the providers generally first build a user profile prior to doing anything else.


The kind of services offered by your platform will cast a major impact on the kind of listing features that you need. In any event, the providers will desire adequate tools to display and market their offering. Users should possess potent tools to search, browse, and filter listings on the basis of their criteria.

The listing feature on a service marketplace may be complex to build. Nevertheless, it’s generally a nice idea to restrict your offering initially and concentrate on a core service. Performing this will conserve you time and aid you market your platform to customers.

Availability And Booking Management

Availability and booking management is a critical feature for your service providers. It permits them to regulate when their services are present and also avoids double-bookings. This can indicate a massive improvement for your providers’ workflow and persuade them to maintain their business on your platform.

Holding Funds And Delaying Payouts

To include a layer of security, you may think about a service termed escrow. Escrow implies that a customer’s credit card is formerly charged when they book a service. Nevertheless, the provider doesn’t receive the money directly. The platform will rather keep the payment until the delivery of the service.

This arrangement successfully protects the two parties from deceitful users. Customers can remain assured they will either obtain the service or receive their money back. Providers are assured the customer will pay since the platform has already levied the customer while booking.

Online Payments

Most marketplaces earn money by receiving a cut out of every transaction that occurs on a marketplace. To be so enabled, a fairly detailed transaction flow is required.

Initially, your marketplace needs to permit customers to remunerate for services with their Paypal account or credit card. Next, you need to get to pay that money to the correct provider, but only following your withdrawal of your commission.

Also Read: How to Create Website Content that Actually Converts

Admin Functionality

The entrepreneur of a service marketplace needs to have complete control over all that occurs on the platform.

Usually, that implies you need to possess a dashboard where you can track and access entire user profiles, messages, transactions, and reviews on your marketplace. Firstly, as tracking how your users behave can offer you extremely helpful insights especially in the early days. Secondly, you are required to block users, moderate content, and edit payments whenever that’s needed.


Reviews are a vital element of developing trust among users. Following a successful transaction, the customer and the service provider review each other. This aids both parties feel assured they are transacting with actual people with honest intentions. Reviews also aid cultivate trust for prospective bookings.

Reviews also aid your service professional evolve their brand. They can even aid stop platform leakage: a provider may not desire to navigate your payment system when that also implies they won’t receive a new customer review to their profile.

Map And Location

If your marketplace caters to local services like photographers or babysitters, it’s a favorable idea to permit the service provider to note their location on their listings, and the customer to find listings on the basis of location.

Nevertheless, if your marketplace concentrates solely on digital or remote services, you might not require a location feature at all. A customer who purchases virtual yoga classes or website development, for example, doesn’t need to bother about the location of the service provider. For such types of marketplaces, a needless map feature might even seem slightly confusing.

Responsive Design

Prospects should get to access your marketplace site on smartphones, laptops, and tablets. Responsive design involves making your platform device-interactive.

Google Analytics Integration

This is needed to track the internet traffic.

Bootstrap Design

This is necessary for faster and easier front-end web development.

FAQ Manager

This comprises a knowledge pool. Users can familiarize themselves with the entire features, Dos and Don’ts, policies, best practices, etc.

Email Messaging System

This is necessary to facilitate professional and hassle-free communication among service providers and service seekers.

Social Sharing

Social sharing features are needed to acquire high-quality social traffic and build positive brand reputation on social networks.

Multi-Currency Support

This is needed to support transactions in local currencies.

Challenges Of Online Service Marketplace

How To Build A Service Marketplace

To effectively develop a business with an online services marketplace is fairly challenging and undergoes plenty of ups and downs. Buoying up in the market with any type of business is always difficult. The challenges faced by the home service provider platform are the following:

Satisfy The Customers Requirements

It is difficult for any business to always satisfy the demands of the customers. Similar issue emerges at the marketplace for service providers platforms also. The customer occasionally assumes a cheap price for the task and may also refuse paying the sum to the professional. This leads to disputes between the service provider and the service seeker. So, to settle the issue the executive used to attend and validate the work to resolve the problem.

Trust Between Service Provider And Seeker

Trust performs a prominent role while developing associations between the professional service provider and the service applicant. This dependability of customers with the online service platform will itself reduce the instances of disputes between the service provider and the customer. Despite that, it is quite obvious that in the business one can rely on the customer but not the professionals. This may cause a decrease in the conversion rate on your service marketplace platform.

Gap Between Demand And Supply

It is a big challenge for a service provider platform to cope with the demand and supply gap within the market. The condition can be extremely clear in the online service marketplace where the gap is fairly large between the demand and the supply in the marketplace.

Product And Service Presentation

In every business, generally the proprietor has power over wherein his products get offered to the clients. Nevertheless, this picture is quite separate in the online marketplace for services platforms. In the online service marketplace, the business owner and the entrepreneur possess extremely little control concerning how their product becomes presented in front of the customer.

USP Of Home Service Provider

Each business platform contains its Unique Selling Point and it is extremely vital for a business to know about its USPs before entering into the business. It also has to market those USPs while remaining in the market and support the business in a productive direction. So, it is vital to know about the USPs of home service providers.

On Platform Reputation

The tools for interaction management should feedback into some type of on-platform reputation. Reputation is an extra source of value that assures stickiness to the platform. With time, the rating raises the findability of an expert on the platform and functions as social proof for additional clients. For instance, taksers on TaskRabbit are not just vetted before they register but are even community reviewed. Their rating is viewable to all likely task posters and they can authenticate prices by the rating they receive online

Value For Both Stakeholders

The workflow tools should generate extra value for both sides, not simply for one. This stops either side from leaving the platform for the transaction. For instance, on Elance (Upwork), before taking a hiring decision, clients get the chance to talk live with freelancers employing inbuilt messaging tools. Freelancers can assess prospective clients on the basis of data like history of job feedback, client’s track record for awarding posted jobs, and the amount spent by a client hiring on Elance.

The following business models exist in the service industry based on the way they are levying the users on the platform:

  • Transaction based model
  • Lead based model
  • Subscription based model


A start-up can choose to attack the market with a full-stack attitude and administer the marketplace or also become the provider of the service. By normalizing the offline service, you can get nearer to the ease of an online transaction.

Nevertheless, the downside is you require to assume the extra operational complexities and gamble of guaranteeing, managing, and providing the service. Therefore, normally speaking, you should attempt to shift your business model as near to monetizing the transaction as probable in order to reduce the friction for onboarding supply. Though if the underlying product or service doesn’t confer itself to this model, then you could try and implement the lead-generation model.



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