Complete Roadmap to Build your On-Demand Service Marketplace

Last Updated Date 30th May, 2025

On-demand service marketplaces are gaining quick popularity around the globe because of the convenience they provide to customers and the various job opportunities that they open for home service professionals. As per statistics, the on-demand service industry is estimated to be at $5.95 billion in 2025 and almost double itself in the next 4 years, marking an impressive compound annual growth rate of 15%.

Furthermore, the rise of remote work culture, home improvement trends, renovation trends, sharing economy, and cost-effectiveness are likely to accelerate growth in the home services industry. However, many entrepreneurs taking inspiration from the on-demand service marketplaces are interested in launching their own marketplace. 

Building a service marketplace today is quite challenging. Along with the technology, you require a clear vision and innovation to stand out from the competition and gain traction in the market. In this blog, we have explained the various business aspects of an on-demand service marketplace so that you can make better decisions and launch your business with full confidence. From the business model and revenue model to industrial insights and development approaches, we will shed light on them all.

On-Demand Service Marketplace Business Model    

Figuring out the business model of your on-demand service platform remains a primary challenge. There are multiple business models in the industry and each of them has different benefits. 

1. Direct Hiring

Under this business model, customers can directly view service provider availability through a booking calendar and hire them. Post-hiring, they can discuss job requirements with their hired service providers. The direct hiring model ensures a faster booking experience but might fail to fulfill the requirements of complex jobs where service providers cannot easily confirm their eligibility for the job. Thus, the direct hiring model is preferred for simple jobs, such as fixing leaks and assembling furniture.

2. Job Posting (Bidding Module)

Instead of customers reviewing service provider profiles, they upload various job requests. Service providers review those jobs and place their bids. A major benefit of the job posting model is that customers get price flexibility. They can compare bids and select a service provider that best matches their requirements. Additionally, job posting is suitable for complex jobs. Service providers only place bids after ensuring their job eligibility. On the other side, the wait time for bids means extended service delivery.

3. Service Packages

Service providers create multiple service packages, stating the cost of each service and warranty over work. Customers browse these packages and buy them. This helps ensure better price transparency and customers are already aware of the package inclusions. Service packages are suitable for long jobs and tedious jobs that may take anywhere from days to weeks. 

4. Hybrid

An on-demand service marketplace that is the combination of all the above-mentioned business models. On this marketplace, you can conduct direct hiring operations, job posting, and also sell service packages. Due to its complexity, developing a service marketplace on this model might be more time-consuming and costly

Possible Revenue Streams of an On-Demand Services Business

There are several revenue streams of an on-demand service marketplace model. However, zeroing in on a couple of them that are sustainable and help businesses scale is essential. Some of the possible revenue streams are explained below:

• Service Commission: Set and charge your own commission rates on every service that is booked on the marketplace.
• Featured Listings: Display top service providers in the featured sections of your service marketplace platform.
• Display Ads: Join ad networks and display third-party advertisements on your marketplace. You can make money via Cost Per Mile (CPM) and Cost Per Click (CPC).
• Monthly Subscriptions: Create and sell tiered monthly subscriptions with different privileges for service providers.
• Paid Bids: Charge service provider for extra bids per month.

Potential Niches in the On-demand Services Industry

The on-demand services industry is further divided into various niches. On a marketplace platform, you can aggregate services from each of these niches. Alternatively, depending on the market demand in your targeted geographic region, you can launch a dedicated on-demand service platform for a particular niche as well.

1. Electrical

Electricians can increase their sales by listing their services on an on-demand electrical services platform and delivering their services to customer homes and business locations. As per statistics, the electrical services market is valued at $138.5 billion in 2025

2. Plumbing Services

To save clients the hassle of finding a plumber in their neighborhood, an on-demand plumbing services platform helps them find and book a plumber in minutes. Furthermore, the overall size of the plumbing services market is also impressive at $134.96 billion.

3. HVAC

As with other on-demand services, an HVAC services platform connects HVAC service providers to customers looking for them. Customers can find as well as book a visit from HVAC service providers. 

4. Pest Control Services

Many homeowners take regular pesticide control as pests pose real threats to health and damage property. An on-demand pest control services platform acts as a one-stop destination for homeowners to find all sorts of pest control services. Within a few clicks on the marketplace, they can book pest control experts and eliminate serious health hazards

5. Cleaning Services

On-demand cleaning services for the ones who struggle hard to keep their house clean and hire maids or housekeepers for the same. Additionally, commercial cleaning is frequently required after house events and parties. The estimated market size of the cleaning industry in 2014 was $415.93 billion and the industry is growing at a CAGR of 6.9% in the projection period 2025-2030.

6. Appliance Repair Services

Customers prefer booking and delivery of services at their doorstep which has brought a lot of popularity to on-demand appliance repair services. These appliances can range from electronic appliances, such as TVs, fridges, and ACs to power tools and other electronic equipment.

7. Landscaping Services

Keeping the yard, lawn, and landscaping maintained has never been so easy with the fleet of local and professional on-demand landscaping services. Furthermore, landscaping requirements are equally required at hotels, schools, colleges, and other public infrastructures. Due to the increasing demand, landscaping services today are worth $330.58 million. 

8. Locksmith Services

On-demand professional locksmith services are in great demand due to residential locks, commercial locks, key duplication, automotive key programming, and locks for security surveillance. It can be difficult to find a professional and experienced locksmith in case of emergency, which is why onboarding locksmith experts on your on-demand service platform makes sense.

9. Roofing Services

On-demand roofing services are gaining popularity because of increasing construction projects and renovation projects. Roofs can be of various types and built from different materials, including asphalt, wood, metal, clay tiles, etc., fixing which requires expert assistance. Additionally, with the increasing preference for green roofs, solar roofs, and smart roofs, the need for roofing services is gaining more pace.

Top On-demand Services Marketplaces

To figure out the business model and workflow of your on-demand service platform, you can take reference from the following leading players. 

Things to Consider While Starting an On-demand Service Platform

While the glaring success of the on-demand service marketplaces is evident, every startup requires strategic planning and timely execution. Below are a few factors to consider while preparing your launch strategy.

1. Market Expansion

On-demand service platforms today refrain from expanding their market reach and end up being limited to a pool of loyal customers. The problem arises as soon as a new competitor with huge capital enters the market and starts expanding. The chances of them getting out of the business increase with the increasing number of competitors.

2. Alternate Financing Options in Place

It is extremely unwise to be dependent on funding to launch and sustain your on-demand business. No matter how well-propositioned your business model is, there is no guarantee of finding an investor. It is better if the entrepreneurs look into alternative financing options like partner financing, invoice advances, marketplace lending, revenue-based financing, etc., and not remain limited to venture capital.

3. Focus on Customers’ Needs

As many successful on-demand businesses have set the benchmark high, modern customers’ expectations have also risen. Some key traits are:

• 24*7 availability
• Personalized experience
• Quick turnaround time
• Cater to the exact customer needs
• Work Quality 
• Custom assistance

Take a look at these points and identify which of these relate to your business. These points can highlight where your business can improve the customer experience by focusing on the needs of your customers.

Trends Transforming the On-demand Services Industry

Here is a look at trends that are being formed and which also lay the foundation for the future of the on-demand services industry.

1. Adoption in a Wide Range of Industries

As people are getting used to on-demand service platforms, they are also looking to take advantage of more on-demand services in diverse industries. As a result, the on-demand economy is going to see an increase in its workforce in the coming years. From electricians and plumbers to remote freelancers and elderly care professionals, people will be able to hire any professional on an on demand service marketplace.

2. Skilled and Qualified Service Providers

So far, most of the on-demand services like cleaning, ride-hailing, food delivery, etc. did not require a special skill set or expertise, However, the growing number of service providers and niches will require skilled and qualified service providers with relevant experience to join the workforce. Some of the examples are medicine and healthcare services which are becoming popular and require service providers to be skilled and experienced.

3. Quality Services at Consumer’s Convenience

As the number of businesses and service providers is increasing in numbers and competition is rising every day, service providers need to offer quality services at reasonable prices. The hike in the number of service providers has forced them to offer premium services at customers’ convenience or lose a potential customer. This is why many service marketplace platforms have also started offering tiered service packages with different offerings.

4. Necessary Background Checks

As the penetration of on-demand services increases, there is an increased demand for running background checks. For safety purposes, customers are hesitant to use the services if there are no background checks for the service providers. On-demand business owners should consider this to build and maintain the trust of the customers.

5. Business Intelligence and Analytics

As the competition in the on-demand services industry is roaring high, businesses will not be able to thrive without data mining and business analytics. These can give valuable insights into the services which are in demand. Business intelligence and analytics will help to find out the demographics of the users, whether the marketing strategies are performing well or not, and what can be done in order to streamline the business.

Building an On-Demand Services Marketplace

Launching an on-demand service marketplace platform is an opportunity to tap into this growing industry, however, rushing to launch a platform as fast as possible with a vague idea about the target market and business model can sink your business before it is even established. A well-thought-out business strategy is a solid foundation, not only for the business but for the technical aspect as well.

Here is what you need to do when building an on-demand services marketplace.

Select your On Demand Business Model

The untapped potential of your business can go far beyond expectations with the aforementioned business models. To provide the best experience, start with job posting and online bidding both. This will keep multiple options open for your business and help you gain traction. Furthermore, you would be flexible to cater to the business requirements of diverse professions.

Define Customer Needs

While exploring the market, find out answers to a couple of questions:

• What is the audience’s age and social status?
• What are their daily challenges?
• How can your business help them solve their problems?
• What are the expectations of service providers?

Build a user persona that can greatly help you define your potential customer’s needs and enable you to fulfill them.

Analyze Market Competitors

Prepare a list of your competitors, irrespective of the fact whether they work in a similar niche or have a slightly different market. Take a closer look at their business, and try to find out insights into their business, like:

• Specialization
• USPs
• Strengths
• Weaknesses

Analyzing all these factors, you will be able to detect the elements their business is missing. You can then use this missing element to strengthen your business and make it one of a kind. You can also use Porter’s Five Forces methods for doing competitive analysis.

Select your Revenue Model

In this article, we mentioned five feasible revenue streams for an on demand marketplace. You can integrate any of them to develop a strong revenue generation channel. Apart from these, you need to select a percentage commission that would be profitable for the business but not too restrictive for service professionals. High commission charges can also turn away service professionals. 

Select Features

An on-demand marketplace needs to have different features for all the different users – admin, service provider, and customer. Have a thorough research of your market and audience and then select the features. 

For reference purposes, we have given a complete list of features below:

• Multiple Job Types: Give users the option to upload multiple types of jobs. These can include private jobs, public jobs, fixed-price jobs, and biddable jobs.
• Job Posting: Let users upload detailed job postings, including all key requirements, skills, images, etc.
• Booking Calendar: The booking calendar will help you display service provider availability on the marketplace. Users can easily check service provider availability and book service. On the other hand, service providers don’t need to worry about double bookings.
• Bidding Module: The bidding module will only work on biddable jobs. It will let service providers upload detailed work proposals on the job along with the bidding amount. Users can review these proposals and select the winning bid based on their job requirements.
• Custom Task Categories: Have the option to create multiple task categories on the marketplace. With the help of these categories, you can attract diverse service professionals to your on-demand marketplace and also use them to create filtering options in the navigation menus. 
• Custom Registration Forms: To collect necessary information for different service professions, you can take the help of custom registration forms. You can place a document verification field on these forms for background check purposes.
• Discussion Forum: Discussion forums will help service providers find easy solutions to their everyday problems. They will also help you generate User-Generated Content (UGC) on the marketplace.
• Service Packages: With the help of service packages, service providers can create readymade tiered packages, offering diverse services. 
• Internal Messaging: To streamline communications between all user types, admin, users, and service providers, you can integrate an internal messaging system. 
• Conflict Resolution: Sometimes users enter into conflict because of work quality issues and payment issues. With a conflict resolution option, you can act as a mediator and provide the best experience to both users and service providers.
• Reviews and Ratings: Reviews and ratings help users identify top-performing professionals and hire them for reliable and quality work. On the other hand, service providers can also have the option to rate and review users.
• Job Cancellation Module:  In case of any unjustified cancellations, be it to avoid marketplace commission or evade a high-charging service provider, the job cancellation module will help you compensate appropriately for the damages. 
• User Management: On an on-demand service platform, you will need to manage a lot of users. To provide them with complete support, you need access to view their order history, payment methods, reviews, and more. Additionally, features like admin approval on service provider registration and maximum registration attempts will help you create a safer marketplace.
• Reports and Analytics: In-depth analytics and reports will help you make data-driven marketing decisions on your platform. 

Attracting Customers for Your On-demand Services Marketplace

Studies and reports portray that the on-demand services market is expanding and there is an unconfined inclination towards this economy. However, not many businesses make it big in the market and their efforts go in vain. The primary reason is the lack of proper marketing.

Let’s discuss how on-demand businesses can attract more customers and increase their revenue.

1. Strategize Marketing Plan

Building an on-demand platform is not all; businesses need to have a properly strategized marketing funnel to create demand and entice customers. A lot of research is required keeping in mind the target audience and the services being offered before actually launching an on-demand services marketplace.

2. Gain Customers’ Trust

Building a better bond with the audience is always recommended in a business. Sponsoring events, interacting with service providers through different mediums, and sharing skill-developing videos can help businesses gain trust and build the authority of their on-demand business.

3. Conduct Research/Surveys

Proper knowledge of the market is vital in any business, and on-demand businesses need it more than any other. It is essential to know the difficulties faced by potential customers, their requirements, and how your services can help them solve their problems. On-demand businesses need to carry out these surveys to be on the right track, or else the competitors can grab their potential customers.

4. Showcase Client Testimonials

Every new customer has this psyche of being doubtful towards a new company. However, if they see another customer sharing positive feedback, they are easily convinced of the services. On-demand businesses need to make sure they allow their customers to share their experience (video, picture, written), which will serve as a testimony of their quality and attract new customers.

5. Offer Lucrative Discounts

Another effective strategy to gain more customers is to provide enticing offers and discounts that can attract existing as well as new customers. The only thing to consider while offering discounts is that these offers should be realistic and not cost much, or else they can backfire.

Build an On-demand Services Marketplace with Yo!Gigs

Yo!Gigs is a full-fledged service marketplace software with comprehensive support to build all types of service marketplaces. With its attention to detail and daily business use cases, Yo!Gigs is the unrivaled solution in the entire industry. Its state-of-the-art design ensures maximum user-friendliness and is also fully customizable. Be it an on-demand marketplace for plumbers, HVAC experts, garage mechanics, electricians, or babysitters, all of them can be developed with the help of Yo!Gigs.

More Reasons to Use Yo!Gigs

• Faster Time-to-Market (TTM): Yo!Gigs is a readymade marketplace software that reduces your overall Time-to-Market and ensures a faster launch. With Yo!Gigs, you can start your pre-launch campaigns hassle-free without any worries of delays.

• Lifetime Solution at One-Time Cost: Unlike other service marketplace software available in the market, Yo!Gigs’ lifetime usage license is available at a one-time cost, making it a highly cost-effective solution for long-term operations.

• Fully Customizable: Yo!Gigs is also fully customizable to accommodate any additional feature requirements or UI/UX preferences.

• Fully Scalable: Service marketplaces are primarily dependent on their capability to scale. Yo!Gigs provides complete scalability in terms of both source code and limitless restrictions. For example, it comes with unlimited job postings, transactions, and user profiles so that you scale and grow your business endlessly.

• Multilingual & Multi-Currency: For business expansion purposes, Yo!Gigs also comes with built-in multilingual and multi-currency support.

FAQs

Q1. What is the best solution to start an on-demand service marketplace platform?

Ans: For on-demand marketplace operations, Yo!Gigs is a highly recommended solution. It comes with a wide range of essential features to simplify all types of on-demand service operations. Furthermore, it also supports direct hiring, job posting, and bidding to provide customers with diverse hiring options. 

To ensure quality services and establish trust in consumers, the marketplace owner gets the background checklist and verification badge features. For managing service providers, Yo!Gigs has modules such as user management, commission management, withdrawal settings, eWallet, advance deposit, etc.

To view Yo!Gigs in action, schedule a free personalized one-on-one demo session here.

Q2. What is the cost of developing an on-demand service marketplace platform?

Ans: The cost of developing an on-demand service marketplace varies on the development method. Via the custom development method, you would be paying between $25-100 per hour to develop your marketplace platform. If it takes 1000 hours to develop the marketplace, then your overall custom development cost will be somewhere between $25,000 – $100,000. On the other hand, by using a readymade solution, you can reduce the overall cost to $1000-$5000. This is possible as the solution has been already developed by the software provider and you are only purchasing a license for the software.

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