8 Things to Consider When Building a Marketplace on a White-label Platform

In its simplest form, the sharing economy is composed of hundreds of online platforms that enable people to turn otherwise unproductive assets into income producing ones. - Glen Carter

Here in Australia, there are so many new matching style marketplaces starting up. It seems like there is a new platform matching empty car spaces, to people who need parking every month! That’s not to say the market is crowded, far from it. There will always be a niche that could benefit from such a solution, some more profitable than others. There is a good Slideshare about the sharing economy landscape from Tracxn:

With the clear rise and recognition of the sharing economy, there is a clear demand for platforms which reduce the complexity and technology risk for creating these matching marketplaces where people and utilise otherwise idle resources. This is where white-label marketplace solutions come in to play. An example of a whitelabel solution is Shopify, where anyone can create their own personalised store for much less time and money it would take to build one from scratch. This has changed the face of the traditional e-commerce scene, enabling quite literally anyone to start an online store. However, for a true marketplace there is a few added layers of complexity a white-label solution needs to address, such as facilitating multiple vendors, or multiple products from the same vendor, geographical search, different types of business models in each marketplace and the list goes on. There are numerous white-label solutions out there for marketplace creation, this article outlines the things to consider while selecting a white-label solution for you, as well as the key advantages and disadvantages.

Some of the key elements to consider when choosing a white-label marketplace solution include:

Test Viability of your Idea

If you have what you think is a great Idea, you need to test that there is actually a market for it. You can research to identify a niche until the cows come home, however, nothing tests the market better than a minimum viable product (MVP). So don’t build out the full scope of your idea upfront, this will inevitably be high cost and risk. Start with the minimum set of features your product would need to differentiate it from the competition or to solve pain points for your target markets.

Cost

Clearly define a budget for your startup, as this will immediately dictate your market entry level when choosing a white-label solution. On this thread, there are companies that offer enterprise-level framework, and others that offer DIY templates with experts to help set things up for a premium. All ranging in price. One thing they all have in common is that Market entry time and development cost is FAR FAR less than building a bespoke platform from scratch. Rather than hundreds of thousand, you can usually get your MVP built for < 100k.

Think about Intellectual property

Generally in software development, although you are the client, IP vests with the developer and you are issued a perpetual license to use the source code for the intended purpose. Unless you pay a premium and sign an agreement to own the IP. However, it gets complex as the development agency will often use already developed components that they own to offer you a competitive price. Furthermore, when looking at a multi-tenant SaaS white-label solution, the IP can’t easily be transferred to you or anyone else, as the core system would also drive other marketplaces. So it is worth reading the fine print, and discussing this with the agency to understand what you can and can’t do with the resulting product. If IP is a big thing for you and your business, consider open source options, otherwise, you may need to look at building a bespoke platform which will substantially increase cost and schedule. The whole benefit of a white-label solution is that most of the supporting infrastructure is already setup, this is the only way cost can reduce. Take Shopify for example, this is a multi-tenanted solution.ecommerce was notoriously expensive. We get clients who outgrow these options for whatever reason (usually because they need advanced custom features) and want a completely bespoke e-commerce solutions, e-commerce solution. You can deploy a store in a matter of seconds, before Shopify, Woo-commerce and other notable e-commerce white label

Factor Marketing into your budget

Allot of new businesses/startups forget how expensive proper marketing is. And for these collaborative consumption marketplaces, it is often a real challenge to get your product in front of your target market. Marketing is often more than the cost of the development. Some would say orders of magnitude more.

Know your featuresand theirs

If you are looking to build a very specific marketplace with search criteria or other features that are unique to your target market, this will likely involve custom development. Which often calls for the enterprise level plan or an additional fee for that development. You could consider removing said features from the MVP to save on cost and get it to market, however, if those features are what sets you apart from the competition it could be detrimental to attracting people in the first place. Also, you’d need to talk with the white label providers to see if they offer customisation services. At least do an audit of what features are available for the client marketplaces on each white label solution. If they are offering a SaaS product and is built on multitenancy, then dedicating resources to do custom development on your features may not be cost effective for them unless it benefits their platform as well.

Do you need a Mobile app?

One thing that is trending these days, is for these collaborative consumption marketplaces to be targeted toward tradespeople and other skilled workers or services which keep the offering party on the go, providing flexible employment opportunities or utilising idle resources. In this case, a Mobile app which can be downloaded from the Appstore. I am not sure if all the platforms listed here offer a mobile solution other than a responsive mobile browser ready solution, worth checking.enroute can be crucial to your core product to ensure ease of use and accessibility of the service, while on-site or

What are your technical requirements?

Although a non-tech savvy entrepreneur may not know what their technical requirements may be, it’s worth understanding what risks are presented in the underlying infrastructure which will support your marketplace. One of the biggest attractions to white-label solutions is that the risk of Technology failure is reduced significantly compared to building a single bespoke platform. But ultimately, ensuring your white-label solution is built on a solid foundation could be critical to your success, especially in 5 - 10 years time. Some foundational things to think about are, but not limited to:

1. What error detection mechanisms are in place?
2. What security monitoring mechanisms are in place?
3. Do they conduct regular penetration tests?
4. Do they develop using continuous deployment for a testing environment (often called staging environment) and a production site?
5. Underlying technology stack needs to stay up to date. Do they apply version upgrades as needed?
6. How quickly do they respond and correct detected bugs or vulnerabilities?
7. Do they offer so many hours of Technical Support each month? This can be pretty critical, especially in the first few months of operation with anything custom built.
8. What is the uptime of their framework?
9. What happens is a server goes down? Is there any built in redundancy?
10. What is their backup and restoration capabilities if some of the above mechanisms fail?
11. What happens if your site is flooded with traffic? Is there a load balancing framework?

These are just a few thoughts on things to consider to complement the information provided in the other answers. When making a decision to start a business like this, addressing/reducing the pain points of your demanders (users) and offerers (sellers) is a MUST. For example, providing easier access to transport or accommodation in your locale (Uber, AirBnB). Uber and AirBnB also eliminates the need to handle money transactions during the driving and occupying experience, removing any potential awkwardness. And in smaller niche marketplaces, the pain points may require more custom features to address them. This is why a one-size fit all white label approach is not 100% possible for all cases. Another huge elephant to address in the room is trust. Why should a user trust your platform over a competitor, or even at all? Interesting white paper about Trust and the Sharing Economy

So in summary

White-label marketplace software has the added advantages over building a bespoke marketplace:

1. Cost is significantly less
2. Underlying technology risk is lower
3. Time to market is significantly less
4. Allows you to focus on bringing people to the marketplace
5. Allows you to focus on building trust and authority in the space

Some disadvantages

1. You can’t clearly own the IP
2. You can’t easily transfer the hosting and maintenance to another third-party if relationships went south
3. You may be limited with custom feature options that you want to add in the future
4. You are at the mercy of the underlying technology framework, as are many other marketplaces using the same platform

Full Disclosure I am an engineer at HuntedHive Digital Solutions, which is the Custom Web Development Company behind wearecnxion.com, a new emerging Australian, premium white-label marketplace platform for matching peer-to-peer or peer-to-product/service. You can build a marketplace with a wizard in a matter of minutes, or we can build a customised marketplace for you (including professional UI Design, and custom feature development) and have it live within 2–3months built on only the best-proven framework. However, I am just providing a candid inside look into the nitty gritty of white label marketplace platforms. Some more info on our platform: