How to Launch a Marketplace like Etsy and Ebay?


With an increase in customer’s demand and advancement in technology, Marketplaces like Etsy, eBay, etc have already started gaining popularity. Creating an Online Marketplace like these Marketplaces requires lots of efforts and strategies. The marketplace is one of the most profits generating business. An online merchant can earn a huge profit from the commissions paid by the sellers. The store admin need not invest in inventories of products.

Why should we create an online Marketplace?

The Marketplace is an eCommerce platform where multiple buyers and sellers are connected on a single platform. Multi-vendor store bridges the gap between users and retailers. Multiple retailers integrate to sell their valuable items on the Marketplace. Retailers need to get themselves registered at the Marketplace and be a part of the large shopping organization. The marketplace can help an admin to increase the customer retention rate and earn from listing seller products, seller services, seller commission in addition to its sale.
The demand and reach of the Marketplaces are expanding every millisecond. It’s never too late to build your Marketplace.

What are the benefits of building a Marketplace?


Some of the salient benefits of building a Marketplace are:

  1. Admin can earn from charging the sellers to list their items.
  2. In addition to the seller listing earnings, the Marketplace admin can also charge a commission for every sale.
  3. Enhanced traffic as buyers will get all their favorite brands at a single platform.
  4. Increased customer retention rate as items of various retailers are available in abundance.
  5. Admin need not worry about the inventories anymore and can even earn a huge amount by selling the products of third party vendors.

What is the Prerequisite for creating an online Marketplace?


1. For creating a Marketplace like Etsy, eBay the admin can follow either of the basic approaches:

A) If the merchant is planning to start his business. He can directly build a Marketplace like a website.

Website Script

If the admin is new to the online business, he needs to find a good eCommerce solution. The most preferred eCommerce platform options are:

B) If the admin is having an eCommerce store then there are various Marketplace extensions available in the Market to simply upgrade the store into a fully-featured Marketplace.

2. Merchant Panel:

Progress of a Marketplace mainly depends on its two main stakeholders i.e buyers and retailers. Details of buyers and sellers are very sensitive and need to be secured and protected. A Merchant panel to manage the seller list and listing of products is mandatory for running a Marketplace.

3. Effective Notification system:

A Notification system is required to keep the sellers and customers updated about any change at the Marketplace.

4. Feedback panel:

Review and Rating platform to monitor the customer’s valuable feedback needs to be there. Feedback sent by the customers is important for the growth of the eCommerce store.

5. Seller dashboard:

A dashboard for sellers to manage their product listings is required in a Marketplace.

How to build your Marketplaces like Etsy and eBay?

There is no denial in this fact that Marketplace is a great source of revenue for store owners. But to run a successful multi-vendor store is not a cup of tea for everyone. The total cost of building a fully-fledged Marketplace may vary from place to place. In various places, the cost of building a Multi vendor store is too lengthy and costly but the availability of the Marketplace modules has lessened the pain and it’s now easy and cheap to build a Marketplace like Etsy and eBay. To start building your Marketplace like Etsy and eBay you must keep the two basic pillars of the Marketplace in mind i.e., seller and buyers. A Marketplace can never run without its sellers and customers.

1. Patience and a plan


Patience is the key mantra in the way of your Multi vendor business. Patience is required in the initial stages of setting up the multi-vendor store. Keep your patience with you till both sides’ sellers and customer communities have established. The period required for the establishment is somewhat greater than an inventory based eCommerce startup where we build our supply chain. However, in the marketplace, both the customer and seller communities are required to build which eventually requires more time to run. The multi-vendor store may take a few months to prove their real worth in the meanwhile the admin needs to look for the target area and start focusing on that.

Etsy is one of the examples which started from a niche market (Vintage, handmade products, and books respectively) and later widened its target area. Thus the admin needs to stay focused, steady and patient with its plan.

2. Emphasis on the initial investment


Never rush for the initial investment decision. The online merchant needs to give himself some time to calculate the worth of its own business as everybody is not a Microsoft owner who has no scarcity of dollars. Some businesses show huge success with early big deals but it’s not possible to buy the speed while building a Marketplace. Emphasis on the initial investments would take your business furthermore on the runway.
Plans like big teams and big offices in the early stages of the multi-vendor store launch can be avoided. Initial marketplace investments are mostly required in two functions:

A. Building the marketplace site, and
B. Building the supply chain with the buyers and sellers community.

3. Target on the niche market


Etsy marketplace started as an eCommerce platform for Vintage and handmade crafts and later expanded its target area to other categories. As of now, Etsy even accepts the integration and the merchants can sell their goods on the oldest and successful multi-vendor store from their stand-alone eCommerce sites. Successful business though may provide you with diverse and rich quality stuff in one place but none of them has started from there where they are now. This narrowly targeted approach steadily grew up into a diverse market and the result is a successful online place like Etsy.

Action plans for targeting certain types of product categories and sellers can be adopted to gradually expand outside the niche of the circle.

4. Niche users utilities


From the above point, it’s clear that successful marketplaces are built from a niche to the masses. During the initial period, the emphasis is required to provide better user experiences to the early on-boarders. Before making plans to appeal the masses focus on user engagement for both the early sellers and customers.

Etsy in its budding stages did a superb job as a marketplace for handmade crafts which ultimately led to its expansion to other categories. Thus before focusing on the broader section first make sure the marketplace is doing justice in the narrow section which ultimately will take you to the enhanced section automatically.

5. Build a community with your Niche users


Focus on the utilities of the targeted Niche users and support them from time to time. Various social media platforms are available that can be used to build a community. Online Merchants can approach these platforms to expand their reach and build a healthy community. Like the Meowing tons that focused on the women who like cats and started selling the cat accessories, cat utilities, and cat theme accessories for women. Women Cat lovers shared a major part of the US population and thus it turned out to be a successful startup with more than 500 thousand followers on different social media platforms.

6. Focus on Stats


While building your Multi-vendor business the online merchant needs to have a vision and trust in himself. Having a vision is important to achieve success in the business but blind faith leads often leads to falling. Tracking your progress and reassessing these steps from time to time will enable you to calculate what is working for you and what is not.

If the stats are not in favor, the admin can rethink them and find measures to turn the result in its favor. Moreover, you can’t run a successful marketplace just with your vision, the online merchant needs to stay tuned with the latest stats and facts.

Measures to be taken care of in your online marketplace.

If you have been a vendor ever that experience can help you to get the best from the third-party sellers. Similarly having practical experience as a customer will help you to address the issues faced by the customers on the eCommerce site. For running a successful multi-vendor store equal attention must be paid to both the sellers and customers. Build a personal connection not only with your sellers but also have a strong customer relationship. A strong customer base will help you to approach the sellers for your multi-vendor store, in the same way, a large number of sellers and product variety can compel the visitors to shop from your site. Moreover, advertisements involving celebrities can play a major role in attracting both sellers and end-users.

How to get the customers?


As discussed earlier, some of the strategies the merchant needs to follow to bring the traffic on their site are:
1. Focus on the niche market.
2. Create a strong customer base
3. Take measures for customer retention.
4. Pay attention to the follow-up emails and social media engagements.

How to get the retailers on your site?

Once the Marketplace is established and you are clear about the niche, things will turn to be fruitful in your way. After you have conquered a place in the market, attracting the sellers will be easier.


The steps discussed above will guide you in giving a correct start to your business. Building your own Marketplace business is a hard job as compared to a one-sided inventory model, but once the Marketplace is properly established and is going in the planned direction then things would start kicking and would setup your footwell and firm in the Market. Till then stay in touch with the latest trends and techniques to give your business new wings to fly high with both sides being well established.

For any query, feel free to contact

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Joe Parker

We boast of the best in the industry plugins for eCommerce systems and has years of experience working with eCommerce websites. We provide best plugins for platforms like - Magento, Prestashop, OpenCart and Shopify . We also provide custom module development and customization services for the website and modules..

One thought on “How to Launch a Marketplace like Etsy and Ebay?

  1. Hey Joe!
    Thanks for publishing this article. I am highly looking forward to create a Marketplace. I got to know some useful tips to consider before proceeding. Waiting for more such articles!!

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