How to Build a Multi Vendor Marketplace Website From Scratch

In the near future, the community expects a rapid increase in the number of multi vendor marketplaces. The scope of online trading is growing every year. More and more people want to get their part of this pie. The main reason is that an e-commerce platform is a very profitable business.

In this article, we cover important points that you should consider to know how to build a multi-vendor marketplace to make it popular and money-making.

What is a multi-vendor marketplace?

Make a long story short, a multi-vendor platform is a website which allows numerous vendors (sellers) to create their online stores (accounts) and put up different products for sale.

Multi-vendor marketplace structure | Codica

One of the differentiating features of this marketplace type is that the platform is managed by the only administrator, most commonly - a marketplace owner. As a result, this person provides a single roof for multiple vendors to sell various goods to the customers worldwide.

Let’s discover great examples of multi-vendor marketplaces:

  • eBay
  • Airbnb
  • Amazon
  • AliExpress
  • Alibaba
  • Etsy
  • Walmart
  • Flipkart
  • Snapdeal

Recommended reading: How to Build an Auction Website Like eBay

Successful multi vendor marketplaces platforms can get very profitable. Here is a report from Statista that shows us that the revenue of Amazon is increasing yearly:

Statistics: Amazon annual net revenue 2004-2018 | Codica

Source: Statista

So let’s take a look at what will help you to build a successful multi-vendor online marketplace.

Find the niche for your multi vendor marketplace

Initially, you need to decide what products or services will be provided on the platform.

Up-to-date, many consumers are still separated from direct communication with product suppliers through tons of offline shops. This option brings higher costs to the customer as they purchase a turn-key solution and doesn’t know if they could save a great deal of money.

Therefore, if you create a multi-vendor marketplace, your platform can provide the customers with lower costs giving an opportunity to purchase directly from sellers or suppliers.

So, narrow your focus, determine the type and category of your services or products, your target audience segments, and location.

Defining your target audience is extremely important. At the very beginning, it’s more productive to find and attract your unique customers, focusing on their preferences and needs. As the platform scales, you can expand the service and product offering, and thus cover more consumer groups.

If your audience is young, it'd be youth culture, if your audience is older, it'd be older people, if it were senior citizens, it'd be senior citizen issues. So you try and hit the target audience. - Kurt Loder

Benefit from competitors’ weaknesses

You need to come up with a way to become better than your market rivals. How can you achieve it?

Actually, there are different approaches to use the competitor’s weaknesses. Let’s define some of the most effective ones:

  • A unique inventory
  • Much better products or services provided
  • A lower commission rate for vendors
  • Advanced loyalty programs for buyers

Once you have chosen your own approach, apply it on your platform straight away.

Recommended reading: How to Build a Multi Vendor Marketplace Like Amazon

Choose a monetization strategy

A monetization strategy refers to the way you will earn money on the platform. Thus, you need to define a revenue model so that you both generate a preferable profit and don’t scare your potential vendors with the conditions.

Below is the list of the most commonly used monetization strategies.

Subscription fee

For instance: Vendors pay $15 per month for a subscription.

Transaction fee

For instance: Vendors pay 4% of the transaction value.

Listing fee

For instance: Vendors pay $10 for listing each product on your marketplace.

Premium listings

For instance: Vendors pay $5 for a premium listing, which stays higher in the feed for a week.


Featured ads are a great way for vendors to promote their products and get more visibility within your multi vendor marketplace platform.

Finally, the best way to prove the capability of these strategies is to see what well-known brands implement them. Let’s take a look at some benchmark companies.

Monetization strategies by famous companies
Subscription feeeBay, Amazon, WIX, Docplanner
Transaction feeShopify, Etsy, eBay, Amazon, Stripe
Listing feeEtsy, eBay, Delivery Hero, Mercado Libro, OLX
Premium listingsGoogle, oLX, Craigslist,, MyTaxi
AdvertisingAmazon, eBay, Facebook, LinkedIn, Twitter, Snap

Related reading: Best Monetization Practices to Build a Successful Online Marketplace

Define the required features for your online marketplace

How to build a multi vendor marketplace?

The functionality is of utmost importance. The matter is that the platform users (both merchants and buyers) should have the best user experience, which will give your customers the important convenience and simplicity which makes them stay and use your platform continually.

Among the most important multi vendor marketplace features, we recommend you to take into consideration the following list.

Authorization and Security

Users must sign up for providing personal details such as name, email, phone number, password. Also, the registration process should be as easy and as fast as possible. Users need to fill in only the most important data. Other information should be specified later.

Registration for both vendors and buyers

A multi vendor marketplace platform should provide an opportunity to create a personal account. For sellers, it is the primary option to create their online stores and start trading. For buyers, it is a boost in user experience, as they can personally chat with the vendors, add stores and items to favourites, etc. Also, it is important for users to have the same account for selling and buying goods and services.

Managing user profile and personal details update

This feature is more crucial for vendors than consumers. The reason is that store information should be comprehensively presented and easily managed by its owner.

Managing items listing

Sellers need to publish and manage their items’ listing. This feature allows them to update item information, such as specifications, description, price, etc.

Search & filters

You need to provide buyers with an easy-to-use and efficient search option. This way, a platform user has an opportunity to find the required product/service easily and rapidly.


This option allows sellers to track their activities. Leads, views, sold, not sold etc.

Boost options

This feature provides the marketplace owner with monetization opportunities. Alongside this, the platform sellers gain a chance to promote their product/service.


This option allows the buyers to increase the credit of trust with the platform and its sellers. Thus, the marketplace sellers are interested in providing excellent service and keeping their store rating high.

Payment functionality

Every multi vendor marketplace website requires advanced payment functionality: the ability to use credit cards, payment service (PayPal, Stripe), billing and invoice operations.

See also: 4 Best Payment Solutions for Online Marketplaces

These are the primary required features that your marketplace should have. Once they are integrated, you can expand the platform functionality with the following:

  • Notifications
  • Landing pages for clients and vendors
  • Browsing content
  • Customer service
  • Shipping options
  • Localization
  • “Request a quote” option (if the marketplace is service-oriented)
  • Substitute/complementary goods
  • An option to compare products/services

Create and launch a marketplace MVP first

Once you have defined those must-have features on your platform, we recommend building a marketplace MVP instead of creating a fully-functional product at once. This concept is rather effective and not so time- and cost-consuming as the full multi vendor marketplace development.

During the MVP development, we recommend you to reassess the platform functionality from the previous step, and make a shortlist of the must-have features, without which the platform will not work.

Then, implement those must-have features on your multi vendor marketplace. When you gain positive feedback from the community and investors (if any), it becomes reasonable to expand your multi-vendor marketplace functionality with additional options.

With the help of the MVP approach, you will get the following advantages at this stage of your multi-vendor website development:

Fast release

You have an opportunity to roll the product to the market within the shortest possible time.

Saving time and money

You develop only the required features spending much less money.

Recommended reading: Building an Online Marketplace - 5 Ways to Keep Costs Down

Knowing the customers’ needs as soon as possible

You collect the community’s feedback to improve your product.

Finding the early adopters

A marketplace MVP allows creating a potential clients’ base that may provide you with the so-called trendsetters.

Additional improvements

Receiving feedback on the customer’s needs, preferences, you need to bring new ideas and exclusive offerings to make your product more attractive. That means more chances to drum up your business.

To conclude, there is actually no reason to spend more time and money at this development stage. Here, you need to understand whether your product is valuable, has the preferable features and solutions, is somehow better than the existing competitors. Launching a marketplace MVP first gives you a chance to collect your customers’ feedback, process their comments, improve your product, and head towards the major release.

Considering the ways of creating an MVP, we want to emphasize the most relevant and effective options:

  • Choose ready-made solutions
    Around the web, you can find dozens of turn-key platform solutions that take into account your ideas, preferences, and requirements to launch the marketplace as fast as possible.

  • Build your marketplace from scratch
    When you come to custom software development, you need to use the most trending technologies. The matter is that they provide you with up-to-date and extended features and tools with huge community support. Among the most popular technologies, we recommend Vue.js and React (front-end) and Ruby on Rails, Node.js (backend).

Considering the software development providers, we recommend hiring a reliable and solid software development company. The main benefit of this choice is that such agencies have profound experience in creating solutions similar to yours that allows you to be sure of getting exactly what you need.

Recommended reading: How to Create a Minimum Viable Product (MVP)

Take care of the design

Your multi-vendor website design has a big influence on the customers’ emotions, feelings, and decisions. Both UI and UX designers should develop an easy-to-use, comprehensive, and attractive web solution.

Further reading: 16 Leading UI/UX Design Trends

Let’s take a look at the most important design concepts and principles that should be followed to attract customers and make them stay on the platform and make a purchase.

Make navigation easy

Navigation and user journey are the cornerstones of usability. The easier it is to buy products, the more sales are generated. You need to make the whole marketplace navigation options clearly visible without creating a deep nesting. Build the easy-to-understand and efficient user flow that will allow them to find and purchase the desired products in a few steps.

Multi-vendor marketplace navigation example: Etsy | Codica

Establish credibility

Try not to overload pages with tons of information not to make the users overwhelmed. You can create trustworthy photos of products, prove full product description, a system of ratings, and reviews. Also, you need to establish a secure purchase and refund policy to make the user confident while working with your marketplace.

Increase user engagement

Make your multi vendor marketplace idea clear. Primarily, provide the users with a complete understanding of the products and services available on the platform. Also, highlight the main features that make your multi-vendor marketplace better than competitors. Users don’t like solving puzzles. Your platform idea and benefits should be clear for any user within the very first seconds.

You may also like: How UX Design Solves Online Marketplace Issues

Acquire vendors and buyers

Now, let’s discuss the sellers’ acquisition and the tactics you can implement and use to get the supply and demand and solve the “chicken & egg” problem, sometimes even before even launching your marketplace platform.

Attract Vendors

  • Build your first supply.
    In the early days, one of the smartest things may be producing your own inventory on the platform. It provides you with a good start, attracting first buyers and, subsequently, sellers.

  • Get your supply from someone else.
    There are tons of products and services available on other existing marketplaces. You can list them on your platform to generate the initial user acquisition.

  • Provide monetary subsidies.
    You can encourage this platform side via monetary subsidies. Such well-known giants as Facebook or Uber in their very beginning were ready to pay cash to attract users to the platforms.

Attract Buyers

  • Have your supply bring your demand.
    You will definitely have sellers on the platform that are known worldwide. You can stimulate them by providing different premium features and then you will promote your marketplace back.

  • Motivate potential customers.
    Similarly to providing monetary subsidies to your vendors, you can offer buyers a certain amount of money for signing up early. Surely, you should not just give away cash for people’s emails. For example, you can provide a discount on the first order or offer $5 off the first purchase.

Attract both parties

  • Leverage channel partners.
    Over time, you need to enter into partnerships with the marketplaces of another niche, for example. It will provide both of you with the beneficial results in the number of new platform users.

  • Targeting buyers and vendors within the same community.
    In case consumers and sellers share common interests on similar goods and services, then they can become interested in such trading on your platform.

Further reading: 7 Smart Ways to Overcome the Chicken and Egg Problem for Online Marketplaces

Promote and grow

Multi-vendor marketplace promotion is a tough hill to climb. For this reason, here we want to provide you with several efficient techniques to grow your online marketplace platform. Surely, each of them requires a separate article to be discussed, but we want to point out the primary moments.


Many consider social media networks as a tool for personal communication. However, this is not exactly correct. Such socials as Instagram, Twitter, Facebook, YouTube, Medium and others are not only about community conversation. Actually, you can effectively benefit from using these channels to promote your brand’s online activity and appreciation.

SEO optimization

Search engine optimization is crucial for your multi-vendor marketplace. You need to be in the top of Google, Yahoo, Bing results when potential buyers are looking for the products available on your platform.

Email Marketing

Once you have launched your multi vendor marketplace platform, start collecting email addresses of your clients. You need to build email lists to retain the existing customers, which is even more important than attracting new ones. The reason is the following: if they bought a certain item from you once, they are more likely to do it again as there is a high credit of trust.

Paid Ads

The paid-for advertisement is quite a powerful tool for promoting your multi vendor marketplace. For example, such an option as Google Ads increases your opportunities to acquire more users from search engines.


Multi vendor marketplace development is a complex, time- and cost-consuming process. You need to take into account all those aspects we have discussed in order to be competitive, advantageous, and achievement-oriented.

Are you looking for a team that knows how to build a multi vendor marketplace website quickly and efficiently? Codica team has created multiple multi vendor marketplaces, and we will gladly help to create yours. Check our ready works or contact us to discuss your project.