27 Sep 2018 on Our Products · 13 min read

13 min read

It’s important to realize that a local marketplace app is a mediator, an online bridge between sellers and buyers. The main rule of modern marketing is to sell so that the consumer can buy without even thinking about it.

Another vital aspect of a marketplace platform is transactions. A marketplace should provide the possibility to pay for goods and services safely and easily. It’s the owner of the marketplace which is fully liable for the safety of users’ personal data and the overall stability of the system.

Ultimately, the objective of any marketplace is marketing. Making it quite obvious because, in order to make money on transactions, real purchases are needed. For this, you need to draw in buyers, who want a good deal, and sellers, who wish to bring home the bacon.

Now without wasting any time let’s get to the main thesis of this article: How to make a marketplace app like Letgo, OLX, or Quikr and make it generate revenue?

I am assuming that you’re inspired by the success stories of the big players in the market and stand solidly on the idea of creating an online marketplace application which will not only replicate but outweigh their success.

As a professional in the domain of marketplace applications and services, I will guide you through the process from the very beginning and give valuable advice.

As with any business, we’ll start with market research

Market research starts with studying big players in the domain, which are your main business rivals. For example, let’s consider big marketplaces like Letgo, OLX, and Quikr.


Founded by a former CEO of OLX, Alec Oxenford, Letgo was launched in 2015. Letgo is solely a mobile application, so you can’t use it on a desktop device as you do with other classifieds app like Craigslist. Letgo is a free person-to-person mobile application allowing users to buy from, sell to, and chat with other users nearby.

letgo clone

How does Letgo work?

Letgo is a mobile classified service where people can buy and sell stuff with any inconvenience. It’s intended for people looking to buy and sell used and old things near to them.

  1. All you need to do to start buying or selling through Letgo is download the app and sign up (either via email or via Facebook)
  2. Click a photo of the item
  3. Quote a price
  4. Write a title, description, category, and upload additional photos (if you want)
  5. Tap Done

*The company claims that it takes just 10 seconds to post an item for sale

How does Letgo make money?

Letgo did not earn money until they introduced a premium feature called Bump. The essence of this feature is that you pay $2 to place an item in the spotlight above the organic results to draw more attention to it for 24 hours.


  1. Easiest classified app
  2. No fees for using the app
  3. Chat lets you communicate effectively with potential buyers/sellers
  4. AI and image recognition technology making the app more comfortable
  5. A transparent environment for closing safe deals


Founded in 2006 by Fabrice Grinda and Alec Oxenford, the online marketplace OLX has its roots in Argentina. The company today functions in over 40 countries, of which it has emerged out as a stronghold in countries like India, Pakistan, Brazil, Portugal, Poland, Ukraine, Nigeria, Philippines, and Kenya. A major part of the company was taken over by Naspers, a South African media group, who succeeded in procuring the then investors. OLX had a standing of $30 million before being purchased by Naspers.

Olx clone

How does OLX work?

As any classifieds, they manage 2 sides platform where people and business can buy & sell items.


  1. Personal or business can publish items, uploading some pictures, with a title, description and price.
  2. They will post an item for sale, and will wait for their potential buyers to contact them.
  3. Sellers can contact by phone or private message and ask for items. Also can negotiate prices.

How does OLX make money?

Unlike other online marketplaces where website acts as an affiliate to sellers’ products, OLX has a different ball-game altogether.

  1. Google Adsense Monetising
  2. Google Custom Search Engine
  3. Sponsored Links and
  4. Sponsored Listings


Quikr essentially enables people, many without Internet access, to sell things that they may not need. The pace at which such deals take place on the site reflects in the brand of the company – Quikr. This Mumbai-based online and mobile classifieds firm, raised Rs 550 crore ($90 million) in 2014 from foreign investors.

quikr clone

How does Quikr work?

  1. Seller posts an Ad for a used product
  2. A buyer makes an offer against the particular ad. He can also choose to buy right there & then
  3. A seller can then choose to accept or counter the offer. The buyer then makes the payment to Quikr
  4. Upon receiving the payment, Quikr schedules a pick-up with the seller and then delivers the product to the buyer
  5. If the buyer accepts the product, Quikr transfers the money to the seller’s account. If the buyer rejects the product, Quikr refunds the buyer’s money and returns the seller’s product

How does Quikr make money?

Quikr revenue model is somewhat different from those of others in the same business, such as Olx and Letgo. These companies list for free and make money through advertisements, but Quikr primarily gets its revenue from paid listing and lead generation for small businesses.

  1. By displaying third-party ads like Google Adsense
  2. By selling ad space for premium classified ads


The company has endeared itself to users by exploiting a very Indian thing – missed calls. The potential seller is required to give a missed call to the company, which will then contact the caller for the ad to be put on the site.

Let’s consider the important features you must be included in your marketplace app

The first feature that stands out is a secure payment gateway. A local buy and sell ads marketplace app should provide a payment gateway interface that securely connects customers to a payment system. Research has shown that the best payment processing frameworks today are Stripe, PayPal, and Payoneer.

Importent features

Google Consumer Barometer shows that 55% of digital moms and Millennials research products online before making a purchasing decision. Introducing an innovative approach to view and compare products in the application will let your users research products or services without leaving the app.

The majority of shoppers count product reviews making it extremely important. Customers always want to know the opinions and verdicts of others before making a choice. Understandably, if reviews are positive, customers are likely to purchase a product. Therefore, consider creating a feature that displays product reviews if you wish to convert users into buyers.

An image is all that the customer sees before making a purchase. I suggest you invest in real photos instead of stock images and regularly monitor the uploads manually or technically based on your websites user base. This will help users take a closer look at the product in a real environment.

Customers are fond of discounts, cashbacks, and on any other attractive money back offers. The secret of discounts lies in the possibility to save some money while making a good buy.

A dedicated discount is a feature you could add to your buys and sell used items app to spur customers to influence their purchase decision.

How much does it cost to build an app like Letgo, OLX, or Quikr?

Now we’ve finally come to the point of development. Developing a marketplace application like Letgo or Craigslist isn’t a big deal.

Clearly define your product strategy

Specify the benefits your Letgo like app will deliver to your customers. There are four main benefits you cannot refuse to offer:

  1. Best quality
  2. Best value
  3. Must-have
  4. Luxury and aspiration

Proceeding from this, you should be able to answer the following questions:

  1. What products or services is your app targeted at?
  2. Who is your target audience?
  3. What makes your product unique?
  4. It might seem that it’s very hard to make a difference in the classified mobile market since the major features are the same in your app and your rivals’ applications.

Read more about what is the best hosting service for your business?

This is somewhat true, but you can always introduce interesting and attractive features like:

  1. Discounts
  2. Loyalty programs
  3. Free shipping
  4. Giveaways
  5. Guaranteed refunds
  6. Personal offers
  7. Gift cards

The best approach to build an buy and sell used items marketplace app

I could’ve taken a mobile app like Letgo and calculate the approximate time needed to develop it, but I’d rather help you make a standalone product that will generate revenue than create a dull custom mobile app that will most likely not launch within the scheduled timeline.

When building a marketplace mobile app, you should keep in mind that its cost will include

  1. The cost of the technologies,
  2. The cost of developing special and custom features you decide to adopt (your universal value proposition), and
  3. Marketing costs

These are the parts of the cost that influence your budget the most, apparently.

Read more about how to estimate a Meetme like app development costs?

Considering the situation in hand let’s estimate the cost of building an Android marketplace application for buyers and an API. The optimum resource needed from design to development are:

resource needed for letgo like app development

*Note: The team composition and number of members depends on the scale of the project and the scope of work. 

We’ll assume that the following stages have already been successfully completed:

  1. Market research and business analysis
  2. Product definition
  3. Feature definition (core features and add-ons)
  4. Business model selection

Now you should start with establishing priorities and performance indicators. By defining the top performance indicators, you can outline the design and major features of your application.

Two key pillars to focus on when defining your top indicators are UI and UX, and branding.

UI and UX

A tailored user experience job is about helping your users identify the features and functions they’re looking for without any inconvenience. This means that even such a minor detail as text alignment or colour selection will play a big role.

Correct image alignment, branded colour selection, etc. draws attention, by guiding users throughout the app, and helps to retain their focus on searching and buying.


This is an aspect that’s frequently brushed off. Every business has its own face – an identifiable brand name and logo. Your product, a marketplace app like letgo or OLX or Quickr, must resonate with your brand without hurting the end user.

Now it’s time to get your hands dirty with real tech stuff.

The core features of a buyer marketplace app should include:

  1. Registration for users with the ability to sign up via social networks
  2. Personal profiles
  3. Customer profiles — settings, personal info, push/email notifications
  4. Seller profiles — settings, listings, shop statistics, customer feedback, ratings
  5. Menu bar
  6. Search field
  7. Filters
  8. Favourites
  9. Shopping cart
  10. Payment options — credit cards/PayPal/cash/etc.
  11. Checkout
  12. Shipping and shipment tracking
  13. Customer support and FAQs
  14. Built-in instant messenger
  15. Product feed
  16. Product feed — product cards
  17. List of trending items
  18. Special offers
  19. Seller ratings and product reviews
  20. Development flow

It’s high time to get down to development.

This is how the development flow looks

To understand how the end-user will exploit your app, it’s important to create a mind map of interactions between screens and work out the product functionality. And it goes like,

Buy and sell app development

Prototyping and creating a marketplace app

Every professional prototyping stage involves polishing up your product functionality and building a map of your user behaviour.

Designing the UI/UX is about developing the application prototype. When designing the UI/UX for your business, your design developers must implement all of the functions described in

  1. The product specification
  2. Determine both application and end-user behaviour, and
  3. Think out the location of buttons and the functionality of each screen

Creating a design concept and rendering app screens

To create a good design concept, it’s enough if your open source development partner renders a few (oftentimes up to five) elaborated screens proceeding from the goals, target audience, and functionality.

As a rule, the designers you are partnering should be able to provide the concept in several styles to help you choose from. When the design concept is approved, the rest of the screens should be rendered in compliance with it.

Implement this best practice

As a best practice, every online app business should start with a minimum viable product or MVP. An MVP is the first version of your app with just enough core features to satisfy early customers and get feedback for future product development.

The major purpose of an MVP is to test your product in the real user environment and evaluate if it solves the initial problem or meets the initial goal of your business.

Consistent feedback will help you to revise the present version of the product, gather information on bugs, to find and address your customers’ pain points and usability index.

Testing and debugging

It’s quite hard to foresee how your local ads app will be used in practice while developing it on a computer. All apps should be treated as unique individuals and unavoidable bugs should be fixed from the very first version of the app.

It is advisable to compile a list of bugs and improvements in order to polish the basic functionality of your product before introducing new features and add-ons.


As soon as the first version of your app is revised and debugged, the MVP will be ready to withstand any new features and add-ons.

Following the update phase which involves the iterative implementation of both major and minor features to the letgo like app’s core functionality.

After updates are deployed, it’s essential for you to conduct a second and final round of testing during which the QA engineer will search for bugs and compare the results with the project requirements.

Testing should be repeated until the criteria for test termination are reached.


Now it’s time to release your flawless local ads marketplace app like letgo and show immense results on the market.
Building a new local ads marketplace app isn’t a big deal. The big deal is elaborating the right idea for your product.

The cost of a dull or poor custom development starts at $30,000 leaving you bankrupt. Which on many times exceeds the given timeline.

While a pre-developed letgo clone will start from $799 opening up many doors for customization and further development.

I suggest you focus extensively on research and analysis, explore stories of success and failure, and gain knowledge. Choose your development team wisely, work hard, and make the diamond mine work.

*Note: The actual cost of an app like Letgo directly depends on the hourly rate of the development company and may vary.

Want to find out how much it costs to build an app like Letgo or OLX at AppKodes?

If you’re interested in specific aspects of a buy and sell used ads marketplace platform and app development, our professionals are ready to guide you.

Schedule your free consultation now.

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