The building materials industry has consistently proven to be an economically viable business option for entrepreneurs. With a global market share of a whopping $1.7 trillion in 2024, the industry has exhibited immense potential in all geographical regions. To begin with, we can take the example of the North American region, which is flourishing with the latest recorded market share of $319 billion, followed by Europe with $210 billion.
Furthermore, the industry is estimated to expand by another $159 billion in the next 5 years, indicating the long-term value of timely investing in a building materials startup. In the digitally-abled era of today where technology is redefining traditional business models, launching a hyperlocal building materials marketplace emerges to be a lucrative venture.
Not only is the hyperlocal marketplace model asset-light, which means it does not require you to own any inventory, but it also helps you grow the entire hyperlocal market as a whole. Let’s take a closer look at everything you require to launch your own multi-vendor building materials marketplace, including its primary benefits, top players, business model, software technology, and more.
Online building materials marketplaces bring efficiency of scale with multiple vendors and a widespread product catalog. Due to this, they are able to provide the following benefits:
The building materials industry is fragmented into various players. When analyzed on the basis of their digital capabilities, the following are the industry’s leading players:
Home Depot is the world’s largest home improvement retailer with a wide range of building materials and supplies. It operates via both online and offline channels and has local stores all across the US. In terms of hyperlocal operations, Home Depot provides same-day delivery and also has a returns policy.
Estimated Revenue: $153.7 billion
Value Proposition: Same-day delivery, next-day delivery, both self-pick-up and delivery options, return options
Lowe’s is another digital building material and supplies provider in the US. With over 2000 local stores, it provides same-day delivery services in all 50 states. Lowe’s product catalog ranges from home accessories, power tools, and HVAC to lawn & garden supplies, bathroom supplies, and flooring.
Estimated Revenue: $86.3 billion
Value Proposition: Same-day delivery, bulk order discounts, return options, buy now pay later, credit programs
Menards is a big player in the building materials industry with over 300 stores in 15 states of the US. It also provides hyperlocal building materials delivery and has a wide catalog of hardware tools, paint supplies, garden equipment, bath fittings, plumbing, and flooring products.
Estimated Revenue: $13.4 billion
Value Proposition: Same-day delivery, credit programs, self-pick-up, and delivery options
As the name suggests, Materials Market is a complete marketplace for building materials suppliers. It helps them sell their products to thousands of customers and expand business operations. The product catalog of Materials Market is also very wide as it sources its products from an array of suppliers.
Estimated Revenue: NA
Value Proposition: Sources building materials from multiple suppliers, helps local businesses expand business operations, bulk deals and discounts
In comparison to Home Depot and Lowe’s, AMAST is a relatively newer player that provides online access to over 200,000 building materials and products. With multiple vendors, AMAST is an online building materials marketplace that specializes in B2B sourcing operations.
Estimated Revenue: $4.9 million
Value Proposition: Community of over 400 vendors, provides custom price quotations, provides vendor name in listings
Usually, four user types are involved in online building materials marketplace operations. These user types are:
These four user types interact on the marketplace platform in the following manner:
Based on the aforementioned business workflow, your online building materials marketplace requires the following features:
Along with these features, your entire technology infrastructure will also require separate mobile apps for customers and delivery staff:
Launching a new startup consumes substantial time and effort. It is highly recommended to invest those efforts in the right direction. For more efficiency, you should create a launch strategy for your building materials marketplace. To further help you out, we have outlined the major steps required to launch your hyperlocal business.
It is highly possible that statistical data for your target hyperlocal market may not be available. In such a situation, instead of statistical data, you rely on consumer surveys and feedback. Multiply the number of potential customers in the total number of respondents by the amount of money they are willing to spend on your online building marketplace. By scaling up this data to the target region’s actual population, you can estimate the market size. Additionally, focus your research on the pricing mechanics, key competitors, and consumer behavior.
For earning revenue, you need to solidify a working revenue generation model that you can easily set up on your online store. Your revenue generation model should focus on maximizing profit generation and diversifying the income streams. Some revenue streams that you can include in your hyperlocal marketplace are:
There are two development approaches to develop your hyperlocal marketplace.
Readymade software are tried and tested business solutions that are developed after thorough research of market scenarios and various use cases. Due to this, they come with all essential features to facilitate hyperlocal operations right out of the box. To provide a superior user experience, readymade hyperlocal delivery solutions also have shorter workflows. Some benefits of using a readymade solution to develop your building materials marketplace are:
In the bespoke development approach, you need to develop the marketplace from scratch. Either you can write the source code yourself or hire a software developer. While bespoke software development is a feasible approach, it lacks the benefits provided by readymade software. For example, the development time frame in bespoke development can range from several months to years and you will also need to pay hourly development costs to the development firm. Some benefits of using bespoke software development are:
| Using Readymade Software | Bespoke Software Development |
| Comes with all essential features in-built |
Requires everything to be developed from scratch |
| Already tried and tested for market scenarios |
Not tested for market scenarios |
| Shorter time-to-market | Longer development and deployment timeframe |
| More cost-effective | Highly costly because of hourly development payment |
| Has predefined workflows | Workflows can be designed as per business requirements |
After developing and configuring the marketplace, you can start your hyperlocal building materials business operations. Prioritize local SEO to attract a hyperlocal audience and also connect with local contractors, engineers, plumbers, and other service professionals. To build your product catalog, you will need to onboard several vendors. There are multiple ways to do so including introducing lucrative offers, building a personal network, email marketing, paid campaigning, and more. For more assistance in attracting vendors to your hyperlocal building materials marketplace, check out this blog.
Lastly, you also need a wide range of building materials to meet the diverse requirements of customers. Some building materials that you can sell on your marketplace are:
Building Materials:-
Growcer is a readymade hyperlocal delivery solution that supports numerous marketplace operations including building materials. It has been carefully developed after years of research to help you with daily hyperlocal business use cases. Perfected with native Android and iOS mobile apps along with different admin, vendor, customer, and front-end interfaces, Growcer is fully equipped to power robust marketplaces.
To further streamline your business, Growcer automates several operations such as inventory, invoicing, returns, cancellations, commissions, payments, taxes, discounts, promotions, user management, analytics, and even shares real-time order status with customers. With automated workflows, Growcer is also able to reduce your overall operational costs.
Lastly, marketplaces built with Growcer are completely white-label and fully scalable. Meaning, that not only you can rebrand Growcer and promote your marketplace under your own brand name but also provide your vendors with unlimited listings and transactions for limitless growth.
Reasons to select Growcer to build your online building material marketplace:
ShortA is an online building materials marketplace with operations in New Zealand and the United Kingdom. With over 7000 delivery partners, ShortA delivers a wide range of construction supplies, including power tools, plumbing tools, electrical supplies, etc. With the help of Growcer, ShortA is able to simplify operations between vendors, customers, and delivery partners. Moreover, it also uses mobile apps to deliver superior service to contractors and homeowners.
The increasing convenience of online shopping apps is revolutionizing diverse industries. However, the revolution is still much awaited at the hyperlocal level in many states and cities. In the building materials industry, you can take the initiative and gain the first-mover advantage by launching your own hyperlocal building materials marketplace. To launch a reliable marketplace, you will need to focus on several factors such as market research, consumer behavior, software technology, and onboarding vendors. After launching your marketplace, build a strong supplier network and focus on local SEO to grow your business.
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Abhishek Kataria is a business consultant at FATbit Technologies. He assists entrepreneurs and business owners in developing viable digital touchpoints and marketplaces. Abhishek is curious about exploring and analyzing new business trends and has a keen eye for the latest developments in the eCommerce sector. Apart from consulting, you can find him practicing French and exploring his creativity in Photoshop.
