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  • How to Create a Local Buy and Sell App Like Letgo and OfferUp

    How to Create a Local Buy and Sell App Like Letgo and OfferUp

    Alex Gurbo
    Alex Gurbo
    CTO & Co-founder
    6 September 2019

    Despite being on the market roughly three years, Letgo has quickly become a buy-and-sell phenomenon. Thanks to the use of artificial intelligence, the app landed a $175 million investment and is the most popular tool for getting rid of used things. OfferUp is another example of how a successful buy-and-sell app can become a sustainable project for an extended period. The app has been running for over eight years and has a net worth of $1 billion.

    If you want to create a local buy-and-sell app, Letgo and OfferUp are both worthwhile inspirations. In this post, you’ll find out more about creating a tool like Letgo or OfferUp.

    Why Mobile Marketplace Apps Are So Popular

    The latest research proves that the popularity of shopping apps is rising at an impressive pace — it’s time for startup owners to jump on the bandwagon and create a business app like OfferUp or Letgo. And According to eMarketer, smartphone sales will make up the third of all e-commerce sales by 2021.

    eMarketer
    Source: eMarketer, February 2019

    With that being said, here are the reasons for m-commerce’s impressive rise.

    • Shopping on smartphones is more convenient. A customer can check deals on the go — as a result, it feels faster and more effortless than buying goods via desktop.
    • More dedication. When users download a mobile shopping app, they tend to spend a lot of time exploring it. Statistics show that an average visitor browses mobile shopping apps 3-4 times longer than buy-and-sell websites.
    • No need to remember URLs. Accessing a mobile marketplace app is more convenient than visiting the website as users don’t have to type the address of the page and log in to the account any time they need to buy something. A mobile app remembers your credentials, cutting down the amount of time needed to add an item to the cart.

    What Features Made Letgo and OfferUp So Successful?

    Back in the day when Letgo and OfferUp were released, the online marketplace competition was tough. Still, both apps managed to find respective audiences and build an impeccable reputation. 

    After analyzing both products, we found patterns in the two share. Here are people’s favorite features on Letgo and OfferUp that made these buy-and-sell apps successful.

    1. Search feed

    There would be no way to navigate apps as popular as Letgo or OfferUp without a search feed. Being able to find a needed item without having to browse through hundreds of announcements increases the value of the marketplace.

    Letgo App Search Feed
    Letgo App Search Feed

    2. Geolocation

    Both Letgo and OfferUp make sure a client can find the closest deals. Using geolocation is a way to help a seller and a buyer connect effortlessly via chat and arrange a product pickup in no time.

    3. Advanced filters

    Apart from having a separate category for different goods (clothes, furniture, electronics, etc.) both Letgo and Offerup have an elaborate filtering system. You are able to sort through deals by setting up the following criteria:

    • Location
    • Distance (you can localize deals at as little is at five miles)
    • Closest deals
    • Newest deals
    • Cheapest deals
    Letgo App Filters
    Letgo App Filters

    4. Comments and rating

    Both Letgo and OfferUp are community-driven apps. Here, users can see the product ratings and reviews on each seller. Such features are not new to retail industry though; shoppers have come to expect them from all buy-and-sell apps.

    5. Comparing prices

    To be a one-stop-shop, Letgo and OfferUp both include a price comparison feature. This way, a shopper will not leave the app and wander off to a different aggregator. Being able to analyze deals in-app or via email and determine which one is better is a way for developers to retain more customers and improve usability.

    6. Built-in payment gateway

    Unfortunately, Letgo doesn’t accept in-app payments — a buyer would have to message the seller and settle the arrangement. OfferUp provides clients with a built-in payment gateway and is much more convenient this way.

    When you create a Letgo clone, be sure to incorporate a built-in payment gateway into the app so that buyers and sellers can perform transactions in the most secure way possible.

    OfferUp provides clients with a built-in payment gateway
    OfferUp provides clients with a built-in payment gateway

    7. Delivery options

    Letgo follows Craiglist’s shopping model — it doesn’t offer shipping. It’s up to a seller and a buyer to arrange product pickup.

    OfferUp manages to rival Amazon and eBay when it comes to shipping. Last year, the app has introduced a built-in shipping model that takes the delivery issue off the seller’s plate. 
    Apart from being able to attract more visitors by embracing deliveries, your app can generate additional revenue by charging shipping fees. For OfferUp, these fees amount to 7.9% per delivery.

    What Do You Need to Know to Create Your Own App to Sell Products?

    There are several steps the management and development team has to compete to release a fully functional Letgo or OfferUp-style tool. Here’s a step-by-step guide on how to build an app like Letgo or OfferUp that will save you a ton of research, time, and confusion.

    Steps to create your own buy and sell app
    Steps to create your own buy and sell app

    Step 1. Find a niche

    It is tempting to start a generic marketplace. However, after a second thought, it becomes clear that not going for a separate niche means setting yourself up for failure.

    There are several ways to choose a marketplace niche:

    • Sell products in a sector you’re passionate about.
    • Look at trending categories on bigger platforms and chase after those audiences.
    • Choose the niches that lack a dedicated marketplace and create an app to sell products from that sector.

    Step 2. Define the target audience

    At the founding stages of the application, it’s better to aim at a particular segment of shoppers and sellers. Determine what kind of users are the core audience of the app. Think about the profile of this group:

    • Location;
    • Age;
    • Language;
    • Education;
    • Average income;
    • Interests.

    Step 3. Plan the development schedule

    Define the list of technical specs and features you’ll have to implement while buying and selling apps development. For a clearer view of the project, combine all the ideas in a flow chart. 

    As a rule, companies use the following steps for app development:

    • Research;
    • Wireframing;
    • Prototyping;
    • Design;
    • Development (front-end and back-end); 
    • Testing;
    • Deployment.

    Step 4. Map out the scalability opportunities

    When you create an app like Offerup or Letgo, keep in mind that someday it may outgrow its traffic capacity. At a certain point in time, a manager will feel that the app is not keeping up with the traffic flow well. That’s why you should consider planning a scalability requirement set beforehand. From a business standpoint, think of ways to retain old visitors while gaining new ones when you anticipate the app’s growth.

    How to Monetize Your Local Buy and Sell App

    How to Monetize Your Local Buy and Sell App
    How to Monetize Your Local Buy and Sell App

    Finding a way to gain profit from running a buy-and-sell app is crucial. Here are the monetization strategies to consider:

    • Membership fees. By encouraging visitors to get a membership, buy-and sell-apps owners strengthen the connection with the core audience. Amazon Premium is a poster case for using a membership monetization model. Keep in mind that if you switch to a fully paid app, there’s a high risk of losing most of the audience. 
    • Freemium. Offering sellers advanced features that increase the amount of exposure a listing gets or giving buyers paid access to cheapest deals. Marketplaces can use the freemium Letgo business model to show the best deals to shoppers or offer additional exposure to sellers. 
    • Commissions. Taking a part of sellers’ profits is another way to sustain a marketplace. This way, without having to pay directly, users will share a fraction of their profits with developers. 
    • Listing fee. Build an Etsy-style marketplace where users pay a standard fee for posting a listing.

    To get a better idea of the ways to monetize a mobile marketplace, let’s answer the question ‘How does Letgo make money?’ as well as ‘What is a monetization model of OfferUp?’

    1. Letgo

    The app’s main revenue stream comes from advertising — Letgo has an on-demand premium feature that helps sellers increase the exposure of their listings. The app charges users $1.99 per listing.

    2. OfferUp

    At its founding stages, OfferUp revenue model was not well-established. The app relied on venture funds to build the name and the following. Now, the app has taken the eBay road and is working towards sustainability. OfferUp has shifted from the local to a global mobile app marketplace. If you were wondering, how does OfferUp make money? — the answer is, the app is charging users delivery commissions.

    How Much Does It Cost to Build an App Like Letgo and OfferUp?

    How Much Does It Cost to Build an App Like Letgo and OfferUp?
    How Much Does It Cost to Build an App Like Letgo and OfferUp?

    There’s no one-size-fits-all price tag for Android and iOS apps. When developers estimate development costs, the following factors are usually taken into account: hour rate, a timeline for app development, complexity.

    Regardless of the app’s niche or monetization model, all marketplace apps share a standard feature set — an authorization page, a shopping cart, a payment gateway, and so on. Here’s a breakdown of how much developing and implementing basic app features would cost:

    FeatureCost range
    User registration$1500-$3,000
    Push notifications $1,000-$2,500
    Navigation$500-$1000
    Geolocation$2,250-$3,500
    Google Maps Integration$1,000
    In-app purchases$2,700-3,500
    Payment integration$2,250-$2,500
    Multi-language support$650-$,1050

    Conclusion

    Seeing the success of apps like Letgo and OfferUp, a fair share of aspiring entrepreneurs want to design a local marketplace app. Building such a project is not as complicated as it may seem as long as you have a basic understanding of must-have features for m-commerce apps. 


    It’s easier and cheaper to develop an app like Letgo or OfferUp if a team of professionals is handling it. At Lotasoft, we offer a full development service package for e-commerce apps. Our technology stack includes Swift, Objective-C, Kotlin, JavaScript, React Native, MySQL, and many more programming, markup, and database languages.

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