Marketplace eCommerce

What Is a Service Marketplace Platform (and How Do You Start One?)

Updated March 6, 2023  |  8 min read
Key Takeaways
  • A service marketplace is a marketplace website or marketplace app that brings together sellers of services and buyers who need those services.
  • The owners of the service marketplace platform will take a cut of the money changing hands—a commission—as the most popular business mode.
  • Marketplace platforms that sell physical items have seen extreme growth, and there are still many niche industries that could make use of a service marketplace website. If you have a services marketplace idea, it's probably worth investigating.
  • Creating an online service marketplace takes considerable planning, but the steps listed below give an excellent idea of the steps you'll need to take and the features that are most important for most successful businesses.
Services marketplace next step.

Service marketplaces make the process of hiring services seamless and secure. They provide customers with a wide range of options to compare services, prices, user reviews, and ratings. This allows customers to make an informed decision before selecting a service provider. It's a business idea that is quickly building steam.

Online service marketplaces also allow customers to book services instantly with these platforms, reducing the time needed to hire services. Furthermore, these platforms include payment protection features that guarantee customer security throughout the transaction. These marketplaces are therefore becoming increasingly popular for customers looking for a quick and secure way to find trusted people selling services.

Many traditional product marketplace platforms have appeared to address specific niche markets. For instance, instead of using a catchall marketplace like Amazon Marketplace or eBay, someone will start a company that caters to antique cars, comic books, or farm machinery. Service marketplaces, on the other hand, haven't been cannibalized so much...meaning that that's a lot of opportunity and markets that are ripe for the picking. Let's take a look at how you can use this profitable business model.

Services marketplace illustration.

What Is a Service Marketplace?

A service marketplace is a platform that offers customers the convenience of finding and booking services from providers, quickly and securely. Customers can explore options to compare services, read user reviews and ratings, book services instantly, and pay securely. These services can be accessed via a marketplace website or marketplace app.

These platforms also provide payment protection features to guarantee customer security while using the platform. Service marketplaces are becoming increasingly popular as they provide customers with a hassle-free experience for hiring services.

Let's take a look at why selling services might be a good business idea for you.

Online services marketplace.

Why More Service Marketplaces Are Being Built

The service industry is an incredibly large part of the US economy. Following the path of successful services marketplaces such as Upwork and Thumbtack, more and more investors see digitalization within this industry as another revolution in online selling.

Successful service marketplaces offer notable advantages for those wanting to buy or sell services—efficiency, convenience, affordability, reliability—allowing businesses like Urbansitter significant growth potential. Investing time into digitizing your business can help you reach heights previously unimagined.

Launching a marketplace for a sector of the service industry is now within reach, even if you don't have the skills yourself. Start off in any industry with professionals to help you build a platform that provides what your customers need. With specialized software, creating an online platform has never been simpler.

A person on an app looking at an online service marketplace.

Taking Advantage of the Online Service Marketplace Model

If individuals, professionals, or businesses are using a website to buy services, entrepreneurs running a service marketplace can monetize this behavior through multiple business models. Popular options include commissions, membership or subscription fees, listing fees, paid ads, and featured listings and ads.

Remember, you don't have to choose just one way to make money!

  • Commissions – Commission is generally considered the fastest and most scalable revenue marketplace business model for service marketplaces. The appeal lies in the fact that service providers don't have to pay anything upfront to sign up, which increases their likelihood of giving your marketplace a try.
  • Listing Fees – Every service listed on the platform incurs a fee when the providers offer their services.
  • Lead Fees – The service platform gets paid for users who request information about an item through your platform.
  • Features Listings – Sellers pay you to place their services in spots that will get noticed, such as at the top of listings. This is similar to...
  • Paid Ads – The platform solicits paid advertising from companies that want to be featured.

Many of these strategies can be profitable when either customers or service providers are difficult to find and are ready to pay for access to one another on online marketplaces.

Paid advertising for services marketplace.

The Cost of a Service Marketplace

The expense of building a service marketplace largely depends on the type of platform you wish to have, whether you need it custom-made or an out-of-the-box solution. Custom-made services feature development typically comes with higher costs due to its customization requirements. An out-of-the-box solution is usually more affordable since it requires less time to set up and manage.

It is also important to factor in the cost of extra development charges for any subsequent changes or new features your service marketplace might require in the future. It is always wise to add additional funds to your initial budgeting plan, as unforeseen changes that occur during development could significantly increase total costs if left unaccounted for.

So, how much does a marketplace platform cost? We won't know until we talk to you and help you create a plan, so be sure to ask for a free quote.

A Step-By-Step Guide to Building a Services Marketplace

Developing a marketplace website for a specific service sector has become much simpler with the help of specialized marketplace software. Let's look at a basic plan to make your mark on the service industry.

Find Your Niche...and Make Sure It's Viable

It's important to consider how a service marketplace can address real problems for both buyers and sellers. Thumbtack revolutionized the industry by making it faster, easier, and cheaper for people to buy and sell services. Uber revolutionized the taxi industry, and Fiverr took the professional freelance industry and monetized it.

Find Where Others Are Failing

Look for inefficiencies, underused assets, and fragmented markets in the services you encounter at work or in your free time. Identify areas where you can add a layer of trust that would make it easier for people to find specific expertise. For example, if it takes too long to find a repairperson or compare office maintenance providers, then there may be an opportunity to create a marketplace with these services.

It's Okay to Start Small

Don't be discouraged by the competition; dedicated niche marketplaces have proved they can compete with large companies by making finding specific expertise easier. Similarly, seeing what people are listing on generic platforms could mean an opportunity exists to make the experience smoother. By focusing on one specialized area, you may be able to offer better customer support and more tailored solutions than larger competitor sites.

Find Your Target Audience

Once you have an idea in mind, validate it by talking to potential users in your target audience. Understand their problems and see if they can pay for the solution your marketplace offers. This way, you'll get honest feedback about what features will benefit them most from a service marketplace like yours. This could help inform your product roadmap going forward.

A service business person checking off a list.

Find a Developer and Build Your Services Marketplace

It's vital for you to find a developer that has experience with marketplace software. While they share similarities, B2C platforms are different from auction platforms...and they both have significant differences from the service marketplace you're looking for.

You want your launch to perform, but most successful marketplaces will launch with a minimum viable product (MVP). The faster you get to your release, the sooner you will be able to adapt it to the needs of your customers. After all, you don't want to tweak everything until it's perfect, only to find out that no one uses the feature you spent a quarter of your budget on. That money would have been better put toward something users were actually requesting, and you won't know what they want until the service platform is live.

As a bonus, you'll be live and will start making at least some money to offset the cost of development. If you stay in the unlaunched development stage forever, you're not bringing in any cash.

And let's not forget this: You might beat your competition to market. If another company has the same idea for a service marketplace website or app, you don't want to watch them launch when you're sitting on a platform that could have launched last month as MVP.

Website development for service platform

Implement the Most Important Features

While it's likely you'll need some custom development for your service marketplace. there are some features that nearly every service business will make use of. When shopping for marketplace software, ensure the developer can provide you with these necessities.

Availability & booking management

Availability and booking management are must-have features for service providers, especially when their services are in high demand. It allows them to keep track of when they are available and makes it easy to prevent double bookings. This can be a game-changer for providers in terms of workflow efficiency since they don’t have to worry about rescheduling or missing out on new bookings.

This type of feature also has tremendous potential for customer satisfaction. When clients know that their provider can rely on an efficient scheduling system, it builds trust and reliability between the two parties, which will encourage return customers.

Moreover, this system also allows your providers to easily manage customer information for future reference such as scheduling preferences or payment details. This makes the entire process much more convenient.

Listings and searches

Service providers need the right tools to present their offerings in an attractive way. Customers should have access to search and filtering options that make it easy to find what they need. This includes basic filters such as price range or location, as well as more advanced features like ratings, reviews, and recommendations.

Search will vary significantly depending on the type of service providers you're offering, Let's compare Angi (formerly Angie's List) with Uber. A person interested in replacing their bathtub is likely to spend considerably more time researching the provider they need than someone standing outside of an airport looking for a ride. Each type of search has to be easy to use, but the way search is done should be designed to address the needs of most customers.

In fact, you could even compare Angi to itself. That same person looking to replace their bathtub will be searching differently from someone who needs a plumber to fix their overflowing bathtub!

Account Profiles for Buyers and Sellers

Customers and service providers must have the ability to create an account and log in securely to your marketplace. User profiles are of utmost importance for service marketplaces, as they provide a platform for professionals to display descriptions of themselves and their services, along with photos, testimonials, certificates, and more.

Users will first set up a profile before engaging in any business transactions, and they might even need to go through your vetting process if that's part of your business model. (Even if you don't require any proof of their abilities, you could offer them preferential treatment if they submit to the vetting process and get "star" status.) The more information, the better, because people want to know if the person they're hiring is licensed and insured.

Map & Location

Map and location are key components for this kind of marketplace. For customers, having the ability to search a marketplace based on their geographic location helps narrow down their choices to items that are available in their area. This makes it easier and faster to find services nearby without having to sift through listings.

For service providers, having a map option allows them to showcase where they can provide their services, allowing more potential customers to discover their offerings. In addition, being able to pinpoint an exact address or region gives buyers the security of knowing exactly where they will be meeting up with their service provider.

Including map and location features on your product/service marketplace is essential for providing users with an efficient and secure experience. The added convenience makes it easier for customers to find what they need quickly, and for sellers to increase the visibility of their offerings.

Online payments

Online payments are an essential feature for service marketplaces. For customers, having secure and reliable payment platforms makes it easy to transact with service providers without having to worry about security or confidentiality issues. This also helps to ensure that payments are transferred reliably and accurately each time.

For service providers, online payments offer the convenience of receiving money almost immediately, eliminating the need for cash...or check transactions which can take days or weeks to process. Processing the payment also ensures that you get your percentage as the marketplace owner.

You may be able to offer vendors reduced costs for accepting payments due to the volume you process when combined with other users. You can also help them accept a greater variety of payments than they did before (You could even accept crypto and then convert it to their payment method of choice.

Overall, integrating online payments into your product/service marketplace with a payment hub offers both buyers and sellers a more streamlined experience when it comes to making transactions. Not only does this provide users with more control and transparency over their purchases, but it also streamlines the entire process for everyone involved.

Holding funds & delaying payouts

Online payments are an essential feature for service marketplaces. For customers, having secure and reliable payment platforms makes it easy to transact with service providers without having to worry about security or confidentiality issues. This also helps to ensure that payments are transferred reliably and accurately each time.

For service providers, online payments offer the convenience of receiving money almost immediately, eliminating the need for cash or check transactions which can take days or weeks to process. In addition, setting up payment processing can help reduce vendor costs since they won't have to pay hefty fees for manual transactions.


Reviews are an essential part of creating trust between providers and customers. After a successful transaction, both parties can review each other, making them confident that they are dealing with real people who have good intentions. Reviews also help build trust for the future, as trust is vital to repeat customers.

Reviews also act as an incentive for service professionals to stay on your platform. After all, they don’t want to miss out on the chance of gaining more reviews for their profile. It also prevents leakage from your platform by incentivizing members to stay in order to gain positive reviews.

Admin functions

As a service marketplace entrepreneur, it is essential to be firmly in the driver's seat of your venture. To that end, having full control over every aspect—from user profiles and transactions, down to messages and reviews —via an easy-to-use dashboard provides invaluable insights into how users are engaging with your platform.

It's also important for you to quickly moderate content and take necessary action, such as blocking or editing payments when needed. The easier it is for an admin to fix problems, the fast resolutions can happen.

An admin solving a problem on their marketplace for services.


When it comes to launching a successful service marketplace, it's important to bring in the service provider side first. That way, when customers begin to arrive, your site will already have plenty of content and useful features in place.

You should also show your initial users how their payments and bookings can be made easier using your platform. Training sessions or videos can be a great way to help users feel comfortable with your platform.

Once you have a high-quality supply of service providers, that's when the marketing can begin. After all, you don't want to spend a lot of money attracting customers to site only for them to find that the service they're looking for doesn't yet have a provider (or that the few providers you have are booked out for months).

Splitting the launch into two parts—product launch and marketing launch—may work best. Doing so will help build confidence for potential customers and providers alike. As this process takes some trial and error, come up with creative ideas (content marketing, SEO solutions, social engagement) and then test them to see if they move the needle effectively.

A person happy because of the product launch.

Analyze the Data, Talk to People, & Grow

Getting your service marketplace out into the world is key for achieving success. As it grows, you'll learn what features your users need and want, which is difficult to know ahead of time. Taking feedback from them will help you understand how you can add powerful, tailored features that match their needs.

This can all lead to increased lifetime customer value, preventing leakage from the platform, and ultimately, aid in growing your business. Through a continuous process of building, learning, and improving, you'll be able to make decisions that will take your brand and platform forwards in the right direction.

Data is a big part of this. A robust service marketplace business will be able to use artificial intelligence and machine learning to guide you on decision making, analyze customer behavior. and identify inefficiencies in your processes.

A data analysis icon showing inefficiencies.

The Challenges of Running an Online Services Marketplace

Running an online services marketplace can be a difficult endeavor. It requires setting up a platform for buyers and sellers to interact, managing the payments, providing customer support, creating marketing campaigns, and more. Here are some of the challenges you may experience when running such a marketplace:

Finding Quality Sellers

Finding trustworthy and reliable experts in the field you're offering services in is essential. Without quality sellers on your marketplace, it will be difficult to retain customers or drive sales as buyers would not be offered satisfactory services.


It is important to stay competitive in the market while providing value to customers that goes above and beyond what competitors offer. This means researching the competition and understanding their business models so you can adjust yours accordingly.

Marketing Strategy

Creating an effective marketing strategy tailored to your target audience is key for success. Developing such strategies takes time and resources which need to be allocated towards them if you want to maximize profits from your business.

Payment Processing

Setting up a payment processing system securely that integrates with your platform is crucial for users’ satisfaction as well as legal compliance purposes. This involves understanding different payment methods available as well as making sure that the setup and processing of payments comply with applicable laws in your area.

Marketplace reports.

Talk to Someone About Your Marketplace Idea

Taking advantage of the current state of the online service marketplace could be a very lucrative step, whether you are starting one from scratch or adding it as another branch of your existing business. We anticipate an explosion of successful service marketplaces in the coming years to address the growing needs of the public.

If you have a services marketplace idea, and you're ready to stake your claim with a marketplace business that addresses a specific service need, Clarity would like to talk to you about it. We have the technical knowledge you're looking for and have built many successful marketplaces.

We offer a free Discovery session to help you plan your service marketplace software, a road map that you can use with us as your developers or take somewhere else. We look forward to helping you succeed, so get in touch today!



A services marketplace is a business model with an online platform that connects buyers and sellers of work in the service industry. It facilitates transactions between freelance professionals or small businesses, enabling buyers to find service providers in their local area or across the globe.

Services can range from IT support to content writing, web design and development, to photography and graphic design, marketing and more. Services marketplaces provide a convenient way for professionals to connect with potential clients while reducing the barrier to entry for freelancers or small businesses looking to start selling their services online. Buyers can access a wide selection of services within their desired budget, while sellers are able to present their skills and offerings in one easy-to-use platform.

Most services marketplaces offer features like payment processing, customer feedback ratings, dispute resolution mechanisms, messaging systems as well as protections for both buyers and sellers. This makes them an increasingly popular choice for both buyers and sellers looking for a safe and secure way to purchase or sell services online.


A product/service marketplace is a business model utilizing an online platform that allows users to purchase and sell products or services. It connects buyers and sellers, offering buyers access to an array of items or services within their desired price range, and giving sellers a single place to present their offerings.

Product/service marketplaces are popular with both buyers and sellers due to the convenience they offer. Buyers can easily browse listings and filter through items based on price, location, ratings, reviews or other criteria. Sellers benefit from being able to reach a large audience without having to invest in a website of their own.

Product/service marketplaces usually come with features such as payment processing, customer feedback ratings, dispute resolution mechanisms, messaging systems and protections for both buyers and sellers. These features make them a safe and secure way for users all over the world to connect for transactions.


Starting a service marketplace takes careful planning and preparation. It involves selecting the right technology to build the platform, creating an efficient payment processing system, and finding service providers who are willing to list their services on your marketplace. It also requires setting up marketing and SEO strategies to help get your marketplace discovered. Ultimately, the success of any service marketplace is determined by building a reputation for reliability and providing high-quality customer experiences.


Services marketplaces owners utilize a business model in which individual or organization that offers services through a product service marketplace. Service providers typically list their services on the marketplace platform and can interact with customers directly through the platform. They are responsible for providing their services to the customer, ensuring quality control and responding to customer inquiries.


Yes, there are many marketplaces for services available online. Some examples include Fiverr and Upwork, which allow customers to purchase services from a variety of service providers; TaskRabbit, which connects customers with local providers who offer labor-based tasks such as moving furniture; and Thumbtack, which helps customers find service providers in any location for almost any type of job.


Examples of such marketplaces include:

  • Fiverr: a global marketplace for digital services such as graphics, programming and writing.
  • Upwork: a platform where businesses can connect with freelance professionals from around the world.
  • TaskRabbit: a platform connecting customers with local service providers to complete labor-based tasks.
  • Thumbtack: an online marketplace helping customers find service providers in any location for almost any job.

Creating a service marketplace involves a number of different costs, including development and hosting fees, staffing and marketing expenses. Depending on the complexity of the project, it can cost anywhere from a few hundred dollars to tens of thousands. The exact cost will depend on your specific requirements and the platform you choose. Here are some of the key factors that influence how much it will cost to develop your own service marketplace:

  • Platform Choice: The platform you use for your service marketplace will have an impact on the total cost of development. Platforms like Etsy or Amazon offer services such as hosting and payment processing at an additional fee, while custom-built marketplaces often require more upfront investment.
  • Staffing Costs: If you’re building a custom marketplace from scratch, hiring developers, designers, and other personnel costs money. If you plan to hire staff for your project, factor those costs into your budget and consider outsourcing certain tasks if possible.
  • Support & Maintenance Costs: Ongoing customer support and maintenance is essential for any online service marketplace. You’ll need to budget for customer support staff, as well as fees associated with site maintenance and security updates.

Overall, it isn’t easy to estimate exactly how much it will cost to develop a service marketplace without knowing your specific requirements. However, by considering all the key factors that influence cost such as platform choice, staffing costs, and customer support/maintenance fees, you should be able to get an idea of what kind of budget you need in order to launch your own successful service marketplace.

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Stephen Beer is a Content Writer at Clarity Ventures and has written about various tech industries for nearly a decade. He is determined to demystify HIPAA, integration, and eCommerce with easy-to-read, easy-to-understand articles to help businesses make the best decisions.