How to Build a Successful Marketplace Business in 2026
Anyone can build a marketplace business. It’s easy. But building a successful one? That takes some skill.
Last year, I gave it a go. I built Aluga Vaga, a marketplace for garage rentals in São Paulo.
There are several challenges that come with creating this kind of business. I hope to help you overcome those challenges with this blog.
Building an MVP
Ship something fast to verify whether customers would use it before wasting time building something no one wants.
Version 1 of Aluga Vaga was a WordPress site with a Google Form attached.
The questionnaire asked users where they wanted to park in São Paulo and for how long.
This initial feedback made me pivot away from the short-term parking app I had originally planned. Instead, I focused on creating something for long-term parking.
I decided to create a real application after receiving 14 sign-ups in the first week.
Creating a full stack application
I built alugavaga.com.br using React.
Creating an app has never been more accessible, given the wealth of online tutorials, courses, and documentation.
If you hate the idea of coding, find a technical co-founder or pay someone to build the app for you.
Cold start problem
Getting the initial supply is one of the first and biggest problems you will face when starting a marketplace. Most marketplaces die here.
Opening an empty marketplace site does not foster much trust. Users will be reluctant to list on an any app that isn’t already being adopted.
100 listings is the classic benchmark required for a marketplace to have a shot at becoming successful.
Cold start solution
All marketplaces have had to overcome the cold start problem. Let’s take a look at how Airbnb and Uber tackled this.
Airbnb
Airbnb famously created a bot that would email hosts on Craigslist to pitch moving to Airbnb.
Later, Airbnb built a “post to Craigslist” feature where hosts could upload their property to Craigslist for more exposure, and traffic would then be redirected back to Airbnb.
Craigslist eventually caught wind and shut this operation down. But by then, Airbnb had already experienced significant growth.
Uber
We all know Uber as a commission-paying car ride business. That was not always the case, however.
Uber had to pay a flat-rate fee to drivers to incentivise supply during their early days.
In some areas, drivers were essentially paid to sit idly in their cars for a few hours.
Uber wanted to avoid the case where someone opened the app and saw that there were no rides available. As mentioned earlier, users will not trust an app with no supply.
Uber’s competition with Lyft
Things heated up once Lyft entered the market.
Many drivers signed up to both companies and chose to drive for whichever was offering the most lucrative incentives on the day.
To address this, Uber evolved its incentives from daily to medium-term. For example, instead of: “Earn $X per ride.”
They switched to: “Complete N trips this month, earn $Y,” locking drivers into their company for more time.
Additionally, referral bonuses fuelled growth, at a cost. At one point, Uber was offering $750 to the driver and $750 to whomever they referred.
This was naturally very expensive. Venture capitalists were willing to subsidise years of losses to sustain this business model.
Takeaways
Fake listings: Some companies actually placed fake listings to mimic growth on their marketplace. Instead, you could add products that you own at the start. For example, list your own Nintendo games on your Nintendo marketplace.
Growth first: Rather than worrying about profitability at the start, focus on getting as many listings on your site as possible.
What I did
Initial supply: I reached out to people already listing a garage on Facebook Marketplace to convince them to list on my site. Tip: Tell them that they have been exclusively chosen to list for free, creating more demand in your marketplace (even if it isn’t technically true).
Referral schemes: Once I had some listings, I integrated a referral scheme which suddenly took off. Be warned that this can get expensive. Eventually, I closed the scheme due to cost.
How to grow after achieving initial supply
Once users start using your platform, word of mouth will become a crucial way to grow.
For this to be successful, people must want to tell their friends and family about the platform. It has to be something they love and trust.
How to cultivate trust
Employ clear rules for both sellers and buyers.
Create a sense of community through forums and discussion boards.
Resolve issues promptly and apologise. Don’t hide from them!
The level of trust required depends on your product. For example, a car-rental platform requires more trust among users than a garden tool marketplace.
Uber removes drivers whose average rating is under 3 stars, which is a way to ensure trust and quality in the marketplace. Whilst Airbnb takes document information to incentivise guests to behave appropriately in the accommodation.
Who are your top suppliers?
Often, a small group supplies the majority of a marketplace.
Treat your top suppliers like royalty and keep them happy.
Airbnb gives out “super host” badges and provides special rewards like reduced fees.
How to make money with your marketplace?
Platform fees
Take a percentage fee from every purchase. For example, Airbnb currently takes 15.5% from the host.
Users avoiding platform fees
Buyers and sellers may try to coordinate the exchange outside of the platform, meaning you won’t receive your platform fee.
Solution
Build internal messaging so you can track when users are trying to exchange outside of the platform and prevent it.
Incentivise sellers to only take payment in-app. Airbnb provides host insurance, which is void if a guest doesn’t book via the app.
Ads
Place relevant ads on the site. For example, a second-hand wedding dress marketplace that allows wedding companies to advertise on the site. This makes the ads seem more natural and also allows you to charge more to advertisers.
Boosts
Charge to boost listings to the top of the page, something spareroom.com and gumtree.com use.
Many companies use a mixture of these strategies. Test and analyse which works best for your marketplace.
Final thoughts
There are endless options for what your marketplace product can be. I have recently launched bjjmat.io, which is a marketplace for Brazilian Jiu-Jitsu drop-in classes. Many niches exist that are desperately calling out for your marketplace to fill the gap.