How to Build an On-Demand Service Marketplace?

By Hyperlocal Cloud

May 09, 2023

How to Build an On-Demand Service Marketplace?

The service industry, one of the highly fragmented industries, has now made its way into the online marketplace. People no longer go outside to get most services because they can now get the same service at a good price without leaving their homes.

An on-demand service marketplace is a digital platform that connects service providers with customers in real time. On-demand service marketplace facilitates the delivery of services to your location, eliminating the need for you to physically visit a service provider's location to obtain the service.

The primary objective of these applications should be to provide users with a comprehensive understanding of the services they require and assist them in obtaining a wide range of small and large services at their residences. The platform aims to provide a comprehensive solution for individuals seeking AC repair, carpentry services, fitness training, and beauty treatments.

Why On-Demand Service Marketplaces Have Become Popular?


Individuals tend to favor services that offer convenient booking and real-time availability.

Availability of Nearby Services:

Users like it when the service they're looking for is nearby or can be delivered to their door. This is why on-demand was still the most profitable business model when COVID-19 locked down was prevalent worldwide.

Cost Efficiency:

On-demand companies typically provide services that are more cost-effective than their traditional counterparts.

Easy Payment:

One of the key drivers of user adoption of on-demand services is the convenience of payment processing, which typically occurs seamlessly within the app interface with minimal user effort.

Here are some more pushing reasons for its increasing popularity:

  • Efficiently access services through a streamlined user interface with minimal interaction.
  • Instant satisfaction through minimal interaction with the service provider.
  • Enhanced control can be achieved by enabling customers to monitor the progress of service delivery.
  • Optimal selections at competitive rates are chosen from a group of service providers.
  • A business model that is more sustainable and ethical than the conventional approach.

Dominating Players Ruling On-Demand Economy

The following individuals or entities are prominent figures in the on-demand industry:

             Urban Company               Timesaverz                    Merry Maids
                   Lyft        Handy on Demand
                   Urban Stems
                 Rinse               TaskRabbit              Doctor On Demand

Most Popular Categories On Any On-Demand Service Marketplace

The concept of an on-demand marketplace application typically evokes thoughts of a salon. However, the numerous services offered by these applications may be limited. These advantages can be utilized for various purposes, enabling users to accomplish all tasks through a straightforward online booking process. Here are some categories that are expected to be included in such applications:

               Tutors and Lessons       Health and Wellness                       HVAC
          Home Interior and Construction        Wedding Services            Landscaping Services
             CCTV Camera Installers         Business Services             Pest Control Services
            Home Cleaning and Repair           Event Services              Locksmith Services
                     Home Shifting               Electrical                Roofing Services

How Does An On-Demand Service Marketplace Work?

The on-demand service marketplace is a platform that connects service providers with customers in real time. An on-demand marketplace exists for nearly every service imaginable, including but not limited to food, transportation, cleaning, salon services, and music streaming.

The platform allows customers to request services through a mobile application or website. The request is then matched with a service provider who is available to fulfill the request. Once a match is made, the service provider is notified of the request and can accept or decline it.

If the service provider accepts the request, they will fulfill the service at the customer's location. The customer can then track the service provider's progress in real-time through the mobile application or website.

Upon completion of the service, the customer is prompted to rate the service provider and provide feedback. The service provider's rating and feedback are then used to improve the quality of the service provided on the platform.

The on-demand service marketplace operates on a commission-based model, where the platform takes a percentage of the service provider's earnings for each completed service. This model incentivizes the platform to provide high-quality service and maintain high customer satisfaction.

Create a Successful On-Demand Service Marketplace

At Hyperlocal Cloud, we have our heads focused on scaling businesses toward the next level of success. Through our 150+ developers, we develop a service marketplace to help businesses become a brand. 

Essential Features of an On-Demand Service Marketplace

The essential features of an on-demand service marketplace include a user-friendly interface, a secure payment system, a rating and review system, a search function, a messaging system, and more. These features are critical to ensuring a seamless and efficient user experience. Additionally, the marketplace should have a robust backend system that can handle high volumes of traffic and transactions.

The on-demand marketplace comprises three distinct portals catering to three distinct user groups: customers, service providers, and administrators. The following section will provide an overview of the features present in each of the three portals.

Customer Portal

  • Registration:

The platform offers a straightforward registration process for customers, allowing them to register using their mobile number, email, or social media account.

  • Payments:

The payment options for customers to book a service include credit card, debit card, and mobile wallet.

  • Reviews/Ratings:

The reviews and ratings feature is designed to assist new users in selecting highly-rated professionals based on feedback from previous customers.

  • Search & Filters:

The search and filter functionality within on-demand marketplaces enable users to easily locate the desired service by navigating to the services page.

Service Provider Portal

  • Registration:

The registration process is designed to be simple and efficient, ensuring a smooth onboarding experience for service providers.

  • Communication:

Effective communication is essential for service providers to interact with customers, address their inquiries, provide necessary assistance, and resolve issues promptly.

  • Maps:

To achieve efficient and timely delivery of services, service providers must be able to navigate the route to their destination effectively. This entails identifying the shortest and most direct routes, ensuring on-time arrival, and expediting the delivery of services. The utilization of maps is a critical tool in facilitating this process.

  • Earnings & Daily Report:

The earnings and daily report feature enables service providers to monitor their weekly, monthly, and yearly earnings, as well as obtain a cost estimation for each service provided.

Admin Portal

  • Comprehensive Management:

The Comprehensive Management feature enables the administrator to efficiently manage the various modules of the marketplace, such as users, profiles, bookings, revenue, and offers. This allows for comprehensive tracking of all aspects of the marketplace.

  • Marketing Module:

The module empowers the administrator to promote and advertise the marketplace effectively, enhancing customer attraction and brand visibility.

  • Offers & Discounts:

The Offers & Discounts feature allows the administrator to generate promotional offers, discounts, and promo codes for customers. This feature enables the administrator to engage and retain customers effectively, resulting in increased return on investment (ROI).

  • Manage Payments:

The Payments Management module facilitates the administration of customer payments and disburses to service providers. This tool enables the administrator to streamline payment processes and monitor earnings.

  • Reports & Analytics:

The Reports & Analytics feature is valuable for monitoring the marketplace's progress. The administrator can review reports such as customer registrations, completed orders, and revenue earned. This information can be used to develop future strategies.

tips to launch a successful service marketplace

Conduct Research to Find Your Service Niche

To establish a service marketplace, it is imperative to identify a market niche with a pool of available service providers capable of catering to the needs of individuals seeking assistance. Consider the following inquiries:

  • Are there any pain points that challenge the average individual to manage?
  • Can you streamline the problem-solving procedure?
  • Is there a particular domain within individuals' lives that can be enhanced by professionals specializing in a specific area?

Choose a Monetization Strategy

Selecting an appropriate monetization strategy is a crucial aspect of marketplace development. Because of this, you need to pick the best option for your service marketplace and implement it.

Subscription fee:

For example, sellers pay $15 monthly.

Transaction fee:

For example, Sellers pay 4% of the transaction value.

Listing fee:

For instance: Sellers pay $10 for listing each service on your marketplace.

Premium listings:

As an example, Service providers pay $5 for a premium listing, which stays higher in the feed for a week.

Paid advertising:

Featured ads are an excellent way for vendors to promote their services and get more visibility within your website.

Think About Promotion and User Acquisition

Various techniques can entice customers to sign up for the platform. Attracting sellers and buyers to an online marketplace requires addressing the marketing and traffic acquisition challenge. There exist various methods to advertise your service marketplace platform, including:

  • Social media marketing
  • Paid-for advertisement
  • Keyword-focused content marketing
  • After launch

Deliver Personalized Customer Service

  • Rapid and efficient handling of inquiries and complaints.

  • The purchasing and selling process is straightforward.
  • The capability to engage with the organization via various communication channels.
  • Tailored customer service.
  • Understanding the requirements of your clientele can enhance the overall user experience. The implementation of a personalized shopping experience has the potential to convert website visitors into customers. Moreover, it facilitates the conversion of one-time shoppers into repeat customers.

Use an Existing Platform or Software

For those seeking a swift launch solution, the option of utilizing white label marketplace software is available. Entrepreneurs often prefer this option due to its shorter launch time for the marketplace. Often, it is unnecessary to allocate resources toward wireframing, development, or testing. The applications have the potential to be open-source, licensed, cloud-based, or self-hosted.

Dominate The Digital Divide With Our On Demand Service Marketplace

Hyperlocal Cloud has mastered the art of creating faultless service marketplaces that have made small businesses a multi-million dollar empire. Want to become the next one?

Tech Stack For A On-Demand Service Marketplace

Our Company Provides Clients With Cutting-Edge Technologies For Building A Marketplace.

                                React                              Redis                     Redux
                              Rails API                              (AWS)                     Sidekiq

How Much Does It Cost To Develop A Service Marketplace?

The cost of making a market depends on how you choose it. Whether it's based on a template or made from scratch, starting a market from scratch will cost you about $77,500.

For a more precise estimation, kindly contact our development partner.

Are you in search of a reliable web development company?

Our team of professionals will assist you in developing software that meets the highest standards of quality.

Concluding Remarks

Developing an online service marketplace entails a complex and time-intensive procedure. To establish a thriving online services marketplace business, it is important to consider numerous details in advance. Going with a white-label on-demand service marketplace is the best option if you want to launch your business in no time.

Every services marketplace encounters distinct challenges specific to its platform, owing to the differences between various platforms.

Regardless of the type, deciding the major points at the outset is essential. This includes the development process, monetization strategy, customer service enhancement, and marketing efforts.

The team at Hyperlocal Cloud has developed numerous marketplace websites and possesses the expertise to construct a successful services marketplace.

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