SaaS or proprietary: what's the right choice for your Marketplace?

At a time when SaaS solutions for e-commerce make it simple to launch and manage an e-boutique, can the same be said for a marketplace? Nothing could be further from the truth. SaaS solutions are perfect for e-commerce because all e-shops are essentially based on the same principles and require more or less the same functionality. For a marketplace, however, it's a completely different matter.

Unlike e-commerce (which is based on interaction between the e-tailer and the customer), a marketplace is based on a tripartite structure (operator/seller/buyer). This platform must manage different payment flows and transport costs for different sellers, which implies centralized management of logistics. In addition, a marketplace must offer its operator a multiplicity of remuneration models (subscription, commissions, listing fees, etc.).

As you can see, you won't be able to approach the creation of a marketplace in the same way as an e-commerce business, and the robustness of the solution chosen for your platform will be central to its success.

Today, there are two main types of solution available to project developers:

• SaaS marketplace solutions ;
• proprietary solutions.

Between the need for speed of launch, flexibility and budget, and the need to change technology, it's not easy to choose the one best suited to your project.

SaaS or proprietary marketplace solutions: what are we talking about?

The SaaS marketplace solution

With a SaaS (Software as a Service) solution for marketplace creation, the project owner has access to turnkey, ready-to-use software. The technical, hosting and maintenance aspects are delegated to the solution provider. The SaaS solution does not require any particular technical skills.

In concrete terms, you don't need to touch the code to launch your marketplace. But not all SaaS solutions are created equal. Some, like Birds Marketplace for example, offer an intuitive interface that makes it much easier to get to grips with the tool. They are also designed to be scalable, making it easy to change technologies.

Proprietary/customized marketplace solutions

A proprietary marketplace solution is, as the name suggests, a technology whose code you own and to which you have full access. In practice, there are two types of solution:

• Proprietary solutions where development is delegated: you can delegate development to an expert marketplaces editor (such as Medialeads) while still owning the code. With this option, as with the SaaS solution, you don't need to touch the code.
  
  
• Proprietary solution with in-house development: you own the code and have the solution developed in-house (with a dedicated team of developers).

Major differences between SaaS and proprietary solutions

SaaS Marketplace

In the case of a SaaS Marketplace, you use a marketplaces editor who offers software accessible in the cloud. In practice, you are not the owner of the software, but rather the "tenant". Only the database belongs to you. You pay a fixed recurring fee and benefit from comprehensive support.

Depending on your choice of marketplace publisher, you may or may not be able to customize your Front-Office. Hence the importance of choosing the right solution, if you don't want to be limited. It's also important to ensure that you'll be able to recover all your elements if you wish to change solution.

Proprietary Marketplace

With a proprietary Marketplace, you own the code, but :

• In the case of a proprietary solution where development is delegated: maintenance and facilities management are managed by the publisher.
• In the case of a proprietary solution with in-house development, you are responsible for maintenance and hosting.

The advantages of a marketplace in SaaS mode

Flexible modules

SaaS solutions offer modules that natively integrate business processes (catalog management, ordering, invoicing, etc.). You can choose only the modules you need, adapting the tool to your budget. These solutions also integrate interconnections with other software such as CRM, accounting, logistics, payment systems, etc., making synchronization easy.

Fast time to market

A SaaS marketplace can be deployed very quickly. The SaaS Marketplace editor provides technical support and accompanies you through every stage of set-up. Being able to count on the experience of a team that has already supported other projects will save you a lot of time. What's more, the editor will have the answer to most legal and technical questions, and if not, can direct you to the right contact.

The best solutions on the market

A SaaS marketplace solution gives you access to a turnkey platform that is constantly updated and meets the latest market requirements. The publisher of a SaaS solution must respect and adapt to the latest regulations in its sector. The expertise acquired in supporting other projects benefits all users of the solution.

Focus on business, not technology

When the infrastructure, maintenance and security of the platform are taken care of by the SaaS solution provider, you can concentrate your efforts on the more "business" part of the project: fine-tuning revenue models, prospecting vendors and partners, implementing the social media strategy, etc. Once again, it's essential to choose a robust publisher to whom you can confidently delegate part of the project.

Disadvantages

• You don't own the solution, but you do own your database.
• You have a recurring cost to bear.
• You are tied to the editor's roadmap, which is why it's important to choose an editor who offers a good level of flexibility.

The advantages of a proprietary marketplace where development is delegated:

Ownership of the solution

If you choose a proprietary marketplace solution and delegate development to a publisher, you retain all intellectual property rights. If you have a problem with the publisher, you can terminate the contract while keeping your code. As the code is hosted on the publisher's server, you will have to pay periodic hosting and maintenance fees, depending on the contract with the publisher.

Focus on business, not technology

Just as with the SaaS solution.

Made-to-measure

The proprietary solution with delegated development enables you to adapt perfectly to the needs and constraints of your market. In fact, you'll be able to create a truly tailor-made solution, both in terms of design and core functionality. For certain types of market, customization can represent real added value.

In sectors with highly specific features and particular constraints, tailor-made solutions are a key element of success. This is true, for example, in the aviation and healthcare sectors, where we have worked on ambitious projects requiring extensive customization and external connections.

Bastien Barritaud - Medialeads

The disadvantage

Longer time-to-market than with a SaaS solution.

Advantages of a proprietary solution with in-house development

Ownership of the solution

As with the previous solution, you own the intellectual property rights. The difference is that you host the code on your own servers.

Made-to-measure

As with the previous solution, you can create a platform that meets your business needs and constraints, in terms of functionality, APIs and design. But beware: your in-house team of developers may not have the necessary expertise in the specificities of the Marketplace model, and you'll need time to adapt and train.

Disadvantages:

• Longer time-to-market than with a SaaS solution.
• Greater risk-taking: recruitment and training of an in-house team of developers.
• You don't benefit from the expertise of a publisher specialized in marketplaces.

Factors to consider when making your choice

In light of the advantages and disadvantages of each solution, it should be easier to choose the one that best suits your project. But first, make sure you take into account the following key criteria:

The specificity of your business

If your marketplace meets relatively standard needs, already covered by solutions on the market (for example, a BtoC product marketplace), you're sure to find what you're looking for with a SaaS solution.

If, on the other hand, your project concerns a field with strong constraints, requiring APIs for connection with other specific software (as in healthcare or finance), it's more likely that you'll need a tailor-made solution.

In general, the more business-specific your project, the more likely it is that a proprietary marketplace with custom development is the right solution for you.

What if you want to change technology?

Are you currently using a solution that you'd like to change because it's obsolete, coming to an end, isn't scalable enough, or for any other reason? Thanks to Medialeads' expertise, whether in SaaS mode with Birds Marketplace or in proprietary mode, we can support you throughout the transition and implementation of your new platform.

In conclusion

Today's SaaS marketplace solutions enable ultra-fast time-to-market, and offer a panel of modules capable of adapting to a wide range of business models. Proprietary solutions, on the other hand, have no equal in terms of customizability.

If you're getting ready to launch a first version of your marketplace, or if you'd like to change your solution, our expert advice is to talk to industry specialists. The specificities of the marketplace model leave no room for improvisation: only a publisher who is an expert in Marketplaces will offer you comprehensive support for your project.