How to Launch a Marketplace like Etsy and Ebay?

With 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.Marketplace is one of the most profits generating business. Online merchant can earn huge profit from the commissions paid by the sellers. The store admin need not to invest in inventories of products.

Why should we create an online Marketplace?


Marketplace is an eCommerce platform where multiple buyers and sellers are connected on a single platform. Marketplace bridges the gap between users and retailers. Multiple retailers integrates together 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 organisation. 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 own sale.
The demand and reach of the Marketplaces is expanding every millisecond. It’s never too late to build your own Marketplace.

What are the benefits of building a Marketplace?


Some of the salient benefits of building a Marketplace are:

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

What are 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 built a Marketplace like 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 stake holders i.e buyers and retailers. Details of buyers and sellers are very sensitive and needs 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 customers valuable feedback needs to be there. Feedback sent by the customers are important for the growth of eCommerce store.

5. Seller dashboard:

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

How to build your own Marketplace 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 Marketplace is not a cup of tea for everyone. Total cost of building a fully fledged Marketplace may vary from place to place. In various places the cost of building a Marketplace is too lengthy and costly but the availability of the Marketplace modules has lessen the pain and its 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 pillar 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 Marketplace. Patience is required in the initial stages of setting up the Marketplace. Keep your patience with you till the both sides’ seller and customer community have established. Time period required for establishment is somewhat greater than an inventory based eCommerce startup where we build our own supply chain. However in marketplace, both the customer and seller communities are required to build which eventually requires more time to run. Marketplace may take few months to prove their real worth in the mean while the admin needs to look for the target area and start focusing on that.

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

2. Emphasis on 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 likes big teams and big offices in the early stages of the Marketplace 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 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 Marketplace from their stand-alone eCommerce sites. Successful Marketplaces though may provide you with diverse and rich quality stuff at one place but none of them has started from there where they are now. This narrow 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, 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 the both the early sellers and customers.

Etsy in it’s 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. The online Merchants can approach these platforms to expand their reach and build a healthy communities. 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 be a successful startup with more than 500 thousand followers on different social media platforms.

6. Focus on Stats


While building your Marketplace business the online merchant needs to have a vision and trust on himself. Having a vision is important to achieve success in the business but blind faith leads often leads to fall. 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 in not in favour, the admin can rethink about them and find measures to turn the result in its favour. 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 for 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 a practical experience as a customer will help you to address the issues faced by the customers on the eCommerce site. For running a successful Marketplace it is important that equal attention is 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 Marketplace in the same way a large number of sellers and product variety can compel the visitors to shop from your site. Moreover the advertisements involving the 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 foot well 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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