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How to Create an eCommerce Marketplace from Scratch? Cost to make e-commerce Marketplace

Have you been looking for a guide on how to create an e-commerce marketplace from scratch? This is your lucky day. Creating...

Written by Niel Patel · 3 min read >
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Have you been looking for a guide on how to create an e-commerce marketplace from scratch? This is your lucky day. Creating an online marketplace is not such a big deal when you know what to do. For the sake of reference, an online marketplace or e-commerce marketplace is a modern virtual market. 

It is more like the link between the seller and the buyer. Popular e-commerce marketplaces like Amazon, Etsy, eBay, Alibaba, and so on. It is an online space where sellers offer their products for buyers to buy. This article will inform you about the 5 basic steps you need for a custom marketplace development

Step 1: Marketplace Idea

The initiator of all creation is an idea. Building an online marketplace starts from the place of having a marketplace idea. The starting point for creating an e-commerce marketplace from scratch is not marketplace app development. It is not even to decide on a business model. 

A potent marketplace idea must first be conceived and tested. There are important steps to take in testing an idea. That idea must address a specific need, this means it must solve a problem. No vendor or buyer will come to your e-commerce marketplace platform if it does not offer them something extra that is not in their current marketplace. 

The second thing in testing your marketplace idea is putting it side by side with what established e-commerce marketplace platforms are doing. These are your prospective competitors and how they are fairing currently will help you fine-tune your idea. Finally, get people of like minds to discuss the idea. 

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Step 2: Business Model or Ecommerce Marketplace

Money-making is one important motivation for thinking of building an online marketplace platform. The business model is the roadmap on how the money is supposed to come into the marketplace owner. So when you start thinking of building an online marketplace, you should decide on the business model. 

You need to decide if your marketplace will be a business-to-business, business-to-customer, or customer-to-customer platform. The e-commerce marketplace model will determine the channel of making money. 

There are different models for bringing revenue to an e-commerce marketplace. Below are the 5 main business models you can choose for your e-commerce marketplace model:

  • Commission

This common model features the payment of a specific percentage of successful sales by the vendor to the marketplace owner. The percentage is predetermined and it can be an attraction for new vendors. The model relies on the total sales generated by the vendors. 

  • Listing Fee

An amount is paid by vendors when they put up a product or service on the online marketplace in this model. This is a common model used for premium marketplaces and for classified ads. A specified amount is only paid for listing a new product. This model works when new vendors keep coming in. 

  • Advertisement and Preferred Placement

This is quite similar to what is done with Facebook ads. It is one of the models being used on Amazon. An amount is paid to make a product appear at the top or a specific part where more customers are bound to notice it. 

  • Freemium

Many e-commerce marketplaces use this model. Here, most of the platform features are free and few are paid for.

  • Subscription Model 

A subscription fee is charged for every vendor for a defined period of time. 

Step 3: Research

The third step in building an e-commerce marketplace software is to do thorough research. This is a deeper analysis than the one you did when you were testing your idea. You need to analyze in detail what your competitors are doing and not doing. 

Another important thing to research is the e-commerce market software and platforms available. This will help you determine the best functionality needed for building your online marketplace from scratch. The research will help you decide the type of marketplace to build. 

It could be a multi-vendor marketplace, an NFT marketplace, a product or service marketplace, and so on. At this stage, you should create a test platform where you launch your minimum value product (MVP).

Step 4: Find Sellers & Buyers for your eCommerce Portal

Attracting buyers and sellers is a very key part of building an online marketplace. The launch of your online marketplace must be preceded by attracting sellers especially. This will ensure that on launching, there are a considerable amount of things to buy. How do you attract sellers and buyers?

The first place to get sellers is on similar marketplace platforms. Active e-commerce vendors will likely come onboard your new platform if your offering sounds nice. Sellers and buyers can also be acquired through other digital marketing methods. 

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Step 5: Launch & Promote your eCommerce Marketplace

The easiest of all the steps to create an online marketplace is launching. After you have tested your MVP, and successfully attracted some sellers and buyers, it is time to launch the platform. The launch will attract some more buyers and sellers. 

The follow-up process after the launch is more important. That process is the key to sustaining the platform. You must promote the marketplace to keep having new buyers and sellers. Pay attention to feedback and customer comments. You must ensure that you deliver on the fulfillment part of the bargain. You need to build trust


The question of how to create a marketplace has been answered. Five basic steps are required and the initial one is to have an idea. It is a refined idea that becomes a goal, this is why your marketplace idea must be refined. Then you must choose a business model that not only attracts sellers but brings money to the coffer. 

Time and money must be invested into adequate research and analysis. Understand and define a unique selling point for your e-commerce marketplace. Ensure to build an online platform with the required functionality. Test your MVP, attract sellers and buyers, then launch your marketplace. Finally, you must commit to continuing to promote your marketplace. Keep your words and build credibility. 

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