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

At a time when SaaS solutions for e-commerce are making it easy to launch and manage an e-shop, can the same be said for a marketplace? Nothing is less certain. 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. But for a marketplace, 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 has to manage different payment flows and transport costs for different sellers, which implies centralised management of logistics. In addition, a marketplace must offer its operator a wide range of remuneration models (subscription, commission, listing fees, etc.).

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

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

• 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.

What is a SaaS or proprietary marketplace solution?

The SaaS marketplace solution

With a SaaS (Software as a Service) solution for creating a marketplace, the project owner has access to turnkey, ready-to-use software. They delegate the technical side, hosting and maintenance to the publisher of the solution. The SaaS solution does not require any particular technical skills.

In practical 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 easier to change technology.

The proprietary/customised marketplace solution

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

• The proprietary solution where development is delegated: you can delegate development to a publisher with expertise in marketplaces (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).

The major differences between SaaS and proprietary solutions

SaaS Marketplace

In the case of a SaaS market place, you use a market place publisher who offers software accessible in the cloud. In practice, you are not the owner of the software, but rather the "tenant". You only own the database. You pay a fixed recurring cost and benefit from comprehensive support.

Depending on your choice of marketplace publisher, you will have varying degrees of freedom to customise your Front Office. Hence the importance of choosing the right solution, if you don't want to be restricted. You also need to make sure that you can recover all the elements if you want to change solution.

Proprietary Marketplace

In the case of 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 (management of catalogues, orders, invoicing, etc.). You can choose only the modules you need, and adapt the tool to your budget. These solutions also integrate interconnections with other software such as CRM, accounting, logistics, payment methods, etc., and make synchronisation easy.

Fast time to market

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

The best solutions available 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 comply with 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 the revenue models, canvassing vendors and partners, implementing the social media strategy, etc. Once again, it's essential to choose a robust publisher to whom you can delegate part of the project with peace of mind.

The 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 publisher's roadmap, which is why it is important to choose a publisher that offers a good level of flexibility.

The advantages of a proprietary marketplace where development is delegated:

Ownership of the solution

If you choose a marketplace solution in proprietary mode and delegate development to a publisher, you own the intellectual property rights. If you have a problem with the publisher, you can break 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 the business, not the technology

As with the SaaS solution.

Made-to-measure

The proprietary solution with delegated development allows you to adapt perfectly to the needs and constraints of your market. In fact, you can create a truly bespoke solution, in terms of both design and main functionality. For certain types of market, customisation 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 health sectors, where we have worked on ambitious projects that required extensive customisation and external connections.

Bastien Barritaud - Medialeads

The downside

A longer time-to-market compared with the SaaS solution.

The 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 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 specifics of the Marketplace model, and you will need to allow time for adaptation and training.

Disadvantages:

• A longer time-to-market compared with the 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 specialising in marketplaces.

Factors to consider when making your choice

In the 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 consider the key criteria:

The specific nature of your business

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

If, on the other hand, your project concerns an area with strong constraints, requiring APIs to connect with other specific software (as in healthcare or finance), it is more likely that you will need a customised solution.

In general, the more business-specific your project, the more likely it is that a proprietary marketplace with bespoke development is the best 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, not sufficiently scalable 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 offer ultra-fast time-to-market and a range of modules capable of adapting to a wide range of business models. Proprietary solutions, on the other hand, have no equal in terms of customisability.

If you're getting ready to launch a first version of your marketplace or if you want to change your solution, our expert advice is to talk to specialists in the sector. The specific features 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.