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How to start your own E‑Marketplace

In 2021, Amazon’s net sales surged to $469.8 billion, marking a remarkable 21.7% increase from the previous year. These impressive figures serve as a motivating example for entrepreneurs deciding to build their own e-commerce platforms akin to Amazon or eBay.

However, starting an online marketplace website can be a daunting task, especially if you’re unsure where to begin. To streamline this process, we’ve compiled a report that outlines the critical stages of entering the e-commerce realm. The time to start is now.

Understanding Online Marketplaces

An online marketplace is a platform that brings together various sellers and buyers of goods and services, simplifying transactions. In recent times, there’s been a shift from individual online stores to marketplaces due to the advantages they offer.

Marketplaces businesses come in various forms, categorized based on the products they offer, the interaction between participants, and the types of participants involved. Three primary marketplace business models emerge.

  1. B2B (business-to-business) – These platforms cater to businesses and often involve wholesale dealings
  2. B2C (business-to-customer) – This is the classic model, targeting individual buyers. Marketplaces like Amazon follows this approach
  3. C2C (customer-to-customer) – Transactions occur between private individuals, whether involving money or barter. Marketplace apps like eBay and Airbnb exemplify this model

Each type of marketplace has its unique characteristics, such as the value of sales, pricing, the sales process duration, and motivation for purchase.

The Benefits of Marketplace Platforms

Creating a marketplace offers distinct advantages for different stakeholders.

For Platform Owners

  • Revenue – Owners can select a revenue model that suits their niche, with options like listing fees, subscriptions, and commissions
  • User Interest – Marketplaces attract users seeking a wide variety of options
  • Investor Interest – Marketplace investments are substantial, attracting significant venture capital

For Buyers

  • Diverse Product Range – Buyers find a wide variety of products conveniently in one place
  • Trusted Platform – Marketplaces inspire trust through ratings and reviews
  • Promotions and Discounts – Many marketplaces offer discounts, providing added value
  • Convenience – Buying is just a click away

For Sellers

  • Reduced Self-Promotion Efforts – Sellers can avoid website development, SEO, and marketing expenses
  • Enhanced Search Ranking – Marketplaces consistently rank high in search results
  • Increased Promotion Opportunities – Sellers gain brand visibility and more customers
  • Access to Product Analytics – Sellers have access to valuable statistics

How to Start an E‑Marketplace in Six Steps

Step 1: Secure Your Domain

Before you begin as a marketplace owner, it’s vital to secure your domain name. This step is relatively straightforward and sets the foundation for a successful marketplace. You can start by following the below steps.

  • Choose a Domain Name – Select a name that clearly conveys the essence of your marketplace idea. It should instantly tell people what your marketplace is all about.
  • Register Your Domain – Once you’ve decided on a domain name, you’ll need to register it through a reputable domain registrar. Several trustworthy options are available, including Nexcess, Cloudways, and AWS.
  • Cost Considerations – The cost of domain registration can vary based on the domain name you choose. Domain registrars may also offer promotions, so it’s worth shopping around to find the most suitable domain for your marketplace.

Step 2: Select Your Ecommerce Marketplace

The next step is choosing the right eCommerce platform for your online marketplace. Your platform serves as the backbone of your marketplace, enabling it to provide essential services to you, vendors, and customers.

Robust software platforms simplify the process of building a marketplace platform, ensuring smooth operation and functionality for your online marketplace. Your platform should effortlessly handle tasks such as the ones below.

  • Handling multiple transactions
  • Listing an unlimited number of products
  • Providing timely customer support
  • Managing vendors and their orders
  • Offering marketing tools to promote your marketplace
  • Automatically approving products uploaded by vendors
  • Analyzing vendor growth within your marketplace 

Several top marketplace software options, like Magento, Prestashop, and Opencart, are available for creating your marketplace. Your choice will depend on whether you prefer open-source or SAAS platforms.

Open-Source – This type of platform allows you to host, implement, and customize your marketplace. Proficiency in coding and eCommerce is necessary to manage an open-source platform effectively. It offers flexibility and adaptability, allowing you to customize the look and functionality of your marketplace. However, building a marketplace using open-source software can be time-consuming and costly, as it requires coding for various aspects of your marketplace.

SAAS (Software as a Service) – SAAS platforms provide you with a ready-made marketplace, eliminating the need for extensive coding. You pay a subscription fee that covers all the essential requirements for your marketplace, including security features.

Your choice of eCommerce platform is a critical decision for your online marketplace. It’s the fundamental component that can significantly impact your business. So, take the time to explore, evaluate, and select the platform that aligns with your needs and vision.

Step 3: Choose Your Payment Gateway

It’s necessary to address payment systems in this guide to build an online marketplace, as payments play a pivotal role in your multi-vendor eCommerce business. Understanding payment systems is essential before launching your eCommerce marketplace. Selecting the right payment gateway that seamlessly integrates with your marketplace is key.

For those unfamiliar, a payment gateway is an online portal that validates and processes card payments. In simple terms, payment gateways enable you to accept credit card payments on your website.

Several payment gateways are available.

  • Stripe
  • PayPal
  • 2Checkout
  • WorldPay

When deciding on a payment gateway, consider these factors as they heavily influence a buyer’s choice when making a payment on your marketplace.

  1. Fees and Charges – Payment providers incur expenses to offer their services on your marketplace. They may charge fixed fees per transaction or variable rates. Your decision should align with your budget and available options. Be aware of setup fees, chargebacks, and other related costs, which can include monthly fees and service charges. Keep in mind that your location and the location of your customers may also affect fees, as some gateways charge extra for international payments.
  2. Payment Types – Another significant consideration is the types of payments you aim to accept when establishing your marketplace. While most payment gateways support card payments, if you plan to accept non-traditional forms of payment like cryptocurrencies (e.g., Bitcoin), you should research whether the gateway supports these payment types.
  3. Payment Integration Solutions – Streamline your online marketplace with payment integration solutions. These solutions seamlessly incorporate various payment methods, making it easier to launch your own online marketplace. They save you time and money while enhancing the checkout experience for buyers.

Step 4: Determine Your Products and Secure Suppliers

Products serve as the backbone of any e-commerce marketplace, making vendor acquisition a pivotal task.

Exploring Suppliers – When it comes to drawing in vendors, it’s essential to delve into their needs and expectations. Many vendors are acquainted with the services offered by major players like Amazon, Flipkart, or eBay and are likely seeking similar or superior offerings on your online marketplace. Conducting thorough research in this regard helps shape your marketplace to align with their expectations.

Provide vendors compelling reasons to believe that your online marketplace startup offers superior returns on investment. This can be achieved by offering smooth transaction and shipping services, easy-to-manage inventory systems, and timely payments. Building trust with vendors is crucial as you embark on your online marketplace journey.

Communication with Suppliers – Engaging with potential vendors through in-person meetings, phone calls, or email correspondence is invaluable. It not only allows you to gather a wealth of information and have your questions addressed but also enables you to gauge each supplier’s preferences and practices. This is especially important when dealing with overseas suppliers, as it minimizes the risk of miscommunication or incorrect orders.

Convincing Your Vendors – Persuading vendors to come on board presents its own set of challenges, but assuring them that your marketplace will boost their business and profitability is a powerful incentive. To achieve this, emphasize the benefits below.

  1. Your online marketplace empowers them to run their business effectively
  2. Registration comes at a low cost, eliminating the need for significant upfront investments
  3. The vendor management system allows them to track their sales performance
  4. Marketplace analysis reports help vendors devise strategies for boosting sales in case of slow growth
  5. Your marketplace facilitates the sale of slow-moving inventory, maximizing their returns
  6. You provide a robust inventory management system for their convenience

By highlighting these advantages, you can win the trust and commitment of your vendors, ensuring a mutually beneficial relationship on your online marketplace.

Step 5: Streamlining Order Fulfillment

In the world of e-commerce, offering convenient delivery options is a make-or-break factor for retaining buyers on your marketplace. Shoppers are quick to abandon their carts when faced with perceived inconveniences.

  1. High delivery costs
  2. Slow delivery speeds
  3. Complex return policies
  4. Lengthy checkout processes

These issues all stem from a common source: buyers’ desire to make efficient use of their time. As a result, they expect fast and free shipping when shopping online, and this expectation plays a pivotal role in driving repeat sales. In fact, a staggering 95% of online shoppers actively seek out fast delivery options.

However, for vendors, offering free shipping can be a painful proposition. Many end up spending a significant portion of their profits on shipping expenses, leading them to impose hefty shipping fees on buyers. This, in turn, can deter potential customers. This is where your online marketplace platform can step in to alleviate the situation.

A few things are necessary to make a significant impact in the world of order fulfillment.

Essential Shipping Components

  • Shipping Carriers & Couriers – Establish connections with shipping operators, with options like UPS, DHL, and FedEx being among the right choices.
  • Order Management – Implement order management systems that efficiently process and track orders, often leveraging CRM software like Salesforce and HubSpot.
  • Fulfillment – Handle the packaging, labeling, and shipping of items after receiving orders.
  • Tracking – Employ a tracking system that keeps buyers updated on order status, such as “shipped” or “in transit.”
  • Returns – Streamline the returns process to foster customer loyalty.
  • Customer Service – Form a dedicated customer support team to assist buyers.

The Cost of Order Fulfillment – Buyers on your marketplace are accustomed to paying for products, delivery, and shipping, along with applicable taxes like VAT. Shipping costs are applied based on various factors such as dimensions, weight, and chosen carrier.

Delivery charges are also incurred by buyers, factoring in variables like handling, packaging, and insurance.

Marketplace Shipping Integrations – To connect your marketplace to a shipping solution, you can rely on third-party platforms which offer shipping APIs to link shipping companies with your marketplace. These integrations help prevent errors, offer multiple carrier options, and validate addresses, ultimately enhancing the overall shopping experience for your buyers.

Step 6: Enhancing and Promoting Your Marketplace

You’ve established your payment gateway, fine-tuned your shipping services, and set up various features for your marketplace. Now, you’ve successfully built your marketplace. But the crucial question remains: How will people discover it? Let’s explore the avenues.

Search Engine Optimization (SEO) 

Commencing an e-commerce marketplace entails reaching out to audiences across the vast expanse of the internet. When launching an e-commerce marketplace, it’s essential to ensure that you are discoverable. All of this revolves around the strategic concept of “SEO.” A pivotal element of search engine optimization is backlinks. The backlinks leading to your domain contribute to a score known as your Domain Rank.

The Domain Rank determines your position in Google search results for specific keywords and significantly influences the amount of organic traffic directed to your website. To gain backlinks and secure a high Google ranking, you should adopt effective backlink-building strategies.

Email Marketing 

Email marketing is an immensely potent strategy for reaching out to prospects and customers. Effective marketing emails convert potential customers into loyal buyers, enabling you to generate leads and sales consistently, 24/7.

People who purchase products advertised through email tend to spend more compared to those who do not receive email offers. Email marketing offers substantial return on investment (ROI), surpassing social media marketing. To put it in perspective, the average cost of an email’s effectiveness is at least three times that of social media.


Once you’ve successfully garnered a considerable number of clicks through SEO efforts, search engine advertising becomes a crucial channel for directing additional traffic from Google search queries to your website.

Google Ads offer three main campaign types: Search, Display, and Responsive. It’s essential to assess and optimize these ad campaigns before launching your online marketplace. Additionally, it’s recommended to run web retargeting ads alongside these paid traffic funnels.

Social Media 

Following the establishment of your marketplace, social media platforms become essential for attracting potential buyers. Your social media strategy may differ significantly from what you’ve practiced before. Review the user profile you previously created on your preferred social media platform.

This profile offers valuable insights into your target audience and provides updated information. Identify where your audience spends their time and what motivates them to make purchases.

This data helps you pinpoint the social media channels vital to your target audience. Armed with this knowledge, you can devise a more cost-effective social media marketing strategy to effectively engage with your audience through these platforms.

Evaluate Your Marketplace’s Performance

Your marketplace is up and running, and your marketing efforts are successfully driving traffic and sales. It’s time to assess how well your marketplace is performing, to measure results and overall effectiveness.

The way you approach this step may vary depending on how you’ve set up your own online marketplace in 2023. Typically, you can obtain the necessary metrics by reviewing your platform’s reports and using tools like Google Analytics.

Key Performance Indicators (KPIs) to Monitor

Website Traffic – How many visitors do you attract on a daily, weekly, or monthly basis? How do customers discover your marketplace, and where are they based?

Analyzing your website traffic provides insights into these questions, helping you make informed business decisions as you get ready to start an e-commerce marketplace. For instance, understanding how people find your marketplace can guide your investments in marketing channels. If, for example, most of your visitors come from Instagram, this information suggests focusing more on that social network. Knowing your customers’ geographical location can aid in implementing localized campaigns or site features, such as displaying prices in a specific currency for visitors from a particular country.

Conversion Rate – The conversion rate is a necessary metric that indicates whether people are making purchases on your online marketplace startup.

A low conversion rate can signal various issues, like attracting the wrong audience or a disconnect between your ads and product offerings. Site usability problems, such as slow loading times or a lack of user-friendliness, could also contribute to a low conversion rate.

If your conversion rate is low, it’s essential to investigate the problem and identify its root cause to address it effectively.

How Can E‑ Help? offers valuable expertise and services for individuals and businesses seeking to create their own e-marketplace. Their support covers a wide range of aspects discussed in the report on starting an e-marketplace, including multi-channel commerce, assistance for retailers in optimizing sales and marketing, guidance for wholesalers in adapting to online operations, support for brand expansion, solutions for digital transformation, and assistance for e-marketplace operators.’s comprehensive skill set makes them a practical resource and partner for those looking to navigate the complexities of the e-commerce landscape effectively. They can help you learn how to build an online marketplace business.


Marketplace websites are on the rise, offering significant opportunities to connect people and businesses globally. To build a thriving business, it’s crucial to excel in every aspect, from understanding user requirements and crafting engaging designs to ensuring flawless functionality during the launch. Staying updated with both current and emerging trends is also essential for creating an online marketplace.