How Much Does It Cost to Build a Website Like Amazon?

Today, the ability to make a purchase in 1 click means nothing extraordinary. Still, in 1999, it was a sensation. The sensation caused by Jeff Bezos and his website, Amazon, now loved by millions of buyers and suppliers.

In 2021, Amazon's stock value rose to make the marketplace worth $1.7 trillion. The store that was started in the garage has become the second company after Apple Inc.

Wondering how to build an e-commerce platform like Amazon? In this article, we will cover the main points to take into account when creating a similar e-commerce platform.

Amazon: 27 years of success and counting

The story of the retailer began in 1994 when Jeff Bezos and his ex-wife MacKenzie opened an online bookshop. They ran their business in the garage and three years later, the enterprise grew up to second distribution commerce.

Having started with a single niche, the company later covered multiple categories of goods, from CDs and DVDs to clothing.

In 2004, the multi-seller e-commerce platform began to expand its boundaries and extended it to China. Today, Amazon has 10+ separate websites worldwide, including localized sites for Australia, Germany, Turkey, and others.

In 2007, Amazon launched mass production of its own electronic book named Kindle.

In 2012, the company bought Kiva Systems, a manufacturer of warehouse robots based in Massachusetts, thus showing that automation is their priority. Delivering products faster became a reality.

In 2019, Amazon had above 600,000 workers onboard, occupying more than 250 million square feet of real estate. To compare, in 2021, the number of Amazon's e-commerce site employees reached 1.4 million worldwide. The online giant operates in various branches, from books to cloud development services, and believes that the customer is of the highest importance.

Why is Amazon so popular?

Four principles in work

The company follows the main four principles in their work that make the platform trustworthy.

1. Customer obsession rather than competitor focus
2. Passion for invention
3. Commitment to operational excellence
4. Long-term thinking.

We have focused like a laser on customer experience, and that really does matter.
- Jeff Bezos

Today, we are wondering: how to make a website like Amazon? Such a marketplace serves customers both via online and physical shops offering a wide variety of selling items. Thus, more and more shoppers can buy the desired products at a reasonable rate on Amazon.

Like all large companies, the multi-seller ecommerce platform analyzes the behavior of its customers and gathers statistics for every user. In such a way, Amazon makes their purchasing experience as smooth as possible.

Related reading: C2C Marketplace Development: Why Invest in Your Own Platform

User-friendly web design

Amazon’s marketplace website design is not about innovations and bright colors. First of all, it stands for convenience in use. The company’s focus is to provide maximum value to its visitors and not distract from searching and buying goods.

Here are some approaches that brands used when building online marketplaces like Amazon.

• High-quality photos and videos create an atmosphere of presence and real purchase. This way, customers view the desired product from different angles in a native environment.

• Detailed descriptions give users over-all information about the product they are interested in. Specifications, item overviews, and key features are of high importance.

• The mobile-friendly approach increases the number of purchases made via smartphones. People find goods on social networks and want to buy them as soon as possible.

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Convenient payment methods

Amazon offers its customers multiple payment gateways, thus making their shopping experience even more seamless. The platform works with credit and debit cards, such as Visa, MasterCard, American Express, Discover, Diners Club, and JCB.

Besides, users can make a purchase with the help of gift cards in different denominations that can be used for certain items only.

There is one more payment option available on the platform, namely FSA and HSA. Like in the case with gift cards, this gateway allows customers to buy only eligible products and services.

Amazon.com Store Card and Amazon Prime Store Card are used for most items available on the platform, some physical stores, and for purchasing from sellers who have included these cards as a payment gateway.

With special attention to its customers, Amazon encrypts all their personal, debit/credit card and banking information, thus making all transactions protected and secure.

How does Amazon make money?

Amazon’s business model is one of the most profitable in the world. According to a Statista report, the net revenue growth of this brand has increased from 3.02 bln USD in 2007 to 110 bln USD in Q3 of 2021.

Source: Statista

How does Amazon generate such a profit?

The key to success is choosing relevant business models and implementing them properly. Below we have gathered the most widely-used and effective monetization strategies used by Amazon.

1. Selling fees

Making the largest part of Amazon’s revenue, vendors are the key partners of the platform. The amount charged varies depending on a plan.

This monetization strategy of Amazon includes the following varieties of fees:

• Per-item fees are paid for each item sold. The rate is $0.99 for an individual plan.

• Referral fees are charged from vendors on a product sold. This type of monetization strategy of Amazon varies by category.

• Shipping fees are collected by the platform depending on the category of an item. Amazon applies shipping rates on media products sold by vendors with the professional plan and to all goods sold by individual sellers.

• Closing fees are charged for each media item sold, i.e. books, software, DVDs, computer games, etc.

2. High-volume listing fees

For each ASIN listed on the website, sellers pay $0.005 every month. The online peer to peer marketplace charges those suppliers whose number of items published is above 100,000.

3. Advertising

The retailer has a strong advertising policy. With its help, vendors increase their revenue by placing ads of their stores and goods on the platform.

4. Subscription fees

With Amazon Prime subscription, buyers pay $119 per year and get a lot of benefits. For example, they get free 2-days shipping for most of the goods listed on the website, unlimited streaming of movies, and special offers. Besides, the e-commerce platform provides students with discounts for becoming the Amazon Prime member.

The following statistics show the rise in the popularity of this paid service.

Source: Statista

5. Amazon Kindle

Kindle eBooks help to generate profit in two ways. The first one is purchasing its products and content, including Audible. The second one is buying Amazon Prime.

How does Amazon make money? Kindle comes with a free 30-days Amazon Prime trial. So, Kindle owners get used to the service and end up buying it.

6. Amazon web services

At the moment, with Amazon web services being the source of primary income, the company takes one of the leading positions in the cloud market.

As Statista shows, in the 3d quarter of 2021, AWS generated a profit income of approximately $16 billion.

Source: Statista

How to attract users to a store like Amazon?

A well-structured platform with tons of complex features and relevant monetization strategies is only the first part of Amazon’s success. The second requirement is to attract both sellers and buyers to start the transaction turnover.

This is a common challenge for e-commerce websites like Amazon. It is called the chicken and egg problem because one party cannot exist without the other. Actually, there are a lot of smart ways to solve this issue. We will discuss the ways the well-known company acquired their users.

Attracting sellers

In terms of attracting sellers, the process was pretty simple. Back in 1995 when the platform launched, there were far fewer online websites working as online stores or e-commerce platforms. Amazon chose the strategy of concentrating on a niche market of books. Zero competition, few sites, word of mouth, and little marketing investments led to acquiring first hundreds of vendors that were more than enough to start.

• Customer service

The e-commerce platform makes customers its top priority. It offers buyers quick delivery, and secure purchase and returns policy.

• Wide variety of selling items

Amazon sells a great number of products in different categories, thus making the shopping experience even more convenient, as there is no need to leave the site where you can buy everything.

• Optimized checkout process

As has already been mentioned, the retailer provides its customers with the ability to make a purchase in 1 click, simplifying the checkout process and saving its users’ time greatly.

• Customer loyalty

Amazon Prime has become a silver bullet for the company, as it greatly increases its clients’ loyalty. Free shipping on dozens of items in only 2 days, special offers, free ebook download, and other opportunities to build trust in the platform.

• Discounts on purchases

Amazon offers discounts on a regular basis. Of course, this strategy is built to get more potential buyers receiving their loyalty. Still, the tactics work.

How to create a multi-vendor marketplace website like Amazon?

We have discussed the main peculiarities of the retail giant. Now, it is time to dive into the process of building a website like Amazon.

Amazon’s technology stack

First of all, you need to choose the right technology stack for the future development process. The difference between various programming tools lies in the platform’s performance, web page response time, and website stability. All these factors affect the visitors’ user experience making them stay longer or leave your website.

If you are looking for how to create a website like Amazon, you should choose the right tech stack which may be quite difficult. Still, it plays an important role in your platform’s success and can greatly reduce your time and money to build a multi vendor marketplace like Amazon.

As a rule, technologies used are divided into two groups: means from the server-side and means from the client-side. At Codica, we recommend you take into account the following tech stack:

The client-side or front-end technologies:

• Hypertext Markup Language (HTML) and Cascading Style Sheets (CSS) point a browser how to show a web page’s content.
• JavaScript (JS) allows customers to interact with your e-commerce platform. For this purpose, we use the most advanced technologies like React.js.

The server-side or back-end technologies:

• A programming language and framework are applied to build the basic logic of your marketplace. At Codica, we work with Ruby and Ruby on Rails, respectively. With their help, we build scalable, fast-loading, and secure online platforms. Besides, we also apply automation frameworks such as RSpec and Capybara for testing.
• A database is used to keep the necessary information about your marketplace website. We opt for PostgreSQL (SQL data storage), Redis, and Amazon Web Services (AWS), as they help us develop reliable platforms.
• A server works with requests that come from customers’ devices. When developing an online marketplace, we use Nginx and Puma because they are perfectly combined with Ruby on Rails.

At Codica, we believe that with the above Amazon’s website tech stack, you will surely build a fast-loading, user-friendly, reliable, and secure website.

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Core features for a marketplace like Amazon

Marketplace functionality is everything that visitors use on your website to reach their goals and satisfy certain needs. Amazon is a giant marketplace platform with dozens of features, but there is no need to implement everything at the start.

Your ecommerce marketplace solution should include the basic functions that will surely make the purchasing process easier and customers’ experience seamless.

What features should you consider when looking at how to build a website like Amazon?

Profiles contain all the necessary information, both about suppliers and buyers. The vendor panel includes specific data, such as shipping and payment methods used by a seller, their product listings, etc.

Buyers’ accounts are mostly about personal information, the ability to view previous orders and wishlists.

The administrator panel is a must-have functionality for the business holder. With its help, the owner of an e-commerce platform customizes settings individually for various groups of suppliers. These settings include shipping and payment methods, fees. The administrator can also manage sellers’ listings, filters, and categories.

Advanced search is a vital feature for any multi vendor marketplace as it makes navigation easier and less time-consuming.

The product page should provide customers with comprehensive information about each selling item. High-quality photos and videos, detailed descriptions make your platform look reliable.

The shopping cart of a multi vendor marketplace like Amazon contains the products chosen. It is the space where a buyer can change the number of goods they want to buy, delete them, view payment methods, shipping prices, etc.

Payment methods allow buyers to purchase via different types of cards and multiple gateways. With a wide array of payment options, you will give your customers the possibility to choose the one that suits them best.

Ratings and reviews help buyers come to well-thought purchasing decisions on multi vendor marketplaces. Besides, this one of Amazon's core features makes your website more trustworthy as you provide users with both products’ and vendors’ ratings.

Wishlist is a strong marketing strategy as this feature allows customers to save products they are likely to buy. When buyers share their wishlists with their friends or family, it sends free traffic to your online marketplace. So, let vendors create extra possibilities to drive engagement to the platform.

Notifications allow both buyers and sellers to reach a certain web page as fast as possible. It works pretty simply: you get a notification, click on it, and immediately shift to a certain page. This way, it greatly boosts user experience and accelerates many processes.

Shipping is a must-have function that helps consumers choose the most relevant and convenient delivery option set by sellers.

Problems and opportunities for websites like Amazon

Undoubtedly, the e-commerce industry attracts entrepreneurs. Certainly, it is possible to earn income being a marketplace owner, but business is not limited only to its creation. If you want to build a website like Amazon, you need to know the opportunities and risks of entering a global marketplace.

Opportunities

First, let's look at the opportunities multi-seller marketplace like Amazon can provide:

• Unlimited scalability

An ordinary online store will need a lot of resources to process many orders per day. At the same time, a marketplace can handle a great number easily.

Furthermore, marketplaces help to unite a large number of partner organizations. Thus, marketplaces expand their range of products and services. This helps to create new ways to generate income and find additional sales channels.

• High customer traffic

Marketplaces use many approaches to attract users to their websites. For example, they devote a lot of effort and time to marketing development. Also, marketplace platforms provide a wide range of products.

Interestingly, the PWC study found that personal attitude to brand became one of the top buying criteria. Therefore, marketplaces check the quality of the goods, which affects the overall level of customer confidence. Also, this helps to improve the customer flow. Furthermore, Amazon’s marketplace sales opportunities and markets with similar possibilities attract the sellers.

• Flexibility

The ability to sell goods you don't own means that it is easier to change and adapt the business to the client's needs.

• Revenue

There are many types of monetization options for the marketplace’s owners: fees, commissions, listening, subscriptions, and providing additional services for users. So, an owner can choose the most appropriate way to generate money for their marketplace.

Most common problems

However, despite all advantages, there is no absolutely perfect work strategy in e-commerce. Thus, here we highlight a few of the common problems you should be ready for when thinking about how to start a business like Amazon.

• High competitiveness

Certainly, it's hard to compete with such giants as Amazon, eBay, and AliExpress. Nevertheless, examples of well-known marketplaces prove that if you find your niche, then success will come.

• The chicken and egg problem

When you set up your website at an early stage, you can face a nontrivial chicken-and-egg problem. Obviously, you don't have sellers and buyers when you launch a marketplace. Therefore, you should convince one of the parties to come in first to your platform.

By the way, it was one of Amazon's website problems when it started as a multi-vendor marketplace. Amazon was a successful book retailer before it became a marketplace with a wide range of products. It solved the chicken and egg problem by using the same customer base from the earlier business. With a strong consumer base, Amazon allows other sellers listing their products on its platform.

• Poor personalization

Indeed, the way how businesses interact with customers has changed a lot, especially when it comes to personalization. Nowadays, it is crucial to help the buyers find faster what they really want to buy.

For example, HelloAva, a personalized skincare platform, helps customers find products for their specific needs. First, customers upload selfies and fill out a questionnaire about their skin. Then, they indicate which products they are interested in, and what specific problems they want to combat.

• UI/UX mistakes

Another problem for a marketplace is poor user experience and user interface. So, it can be a reason why the buyers and sellers don't show any interest in the marketplace platform. To solve the design problem, you should keep it simple, make the text relevant with size and contrast, avoid long paragraphs in text, and so on.

For example, at Codica, we helped create a visually-appealing online travel marketplace for iExpedition. Our task was to build a user-friendly and easy-to-manage booking system to help customers find the most suitable cruise. As a result, all the pages were designed correctly to make the platform convenient and appealing to users.

Related reading: 5 Major Principles for a User-Friendly Website You Need to Know

How much does it cost to build a website like Amazon?

To begin with, Amazon is a complex platform, which took many years to evolve. However, let’s try to get an approximate cost to create a multi vendor marketplace website like Amazon.

We should take into account the required functionality, as well as the rates of the software development provider that will help build your marketplace website. These are the most significant aspects that will influence the required budget. The table below shows approximately what is the cost to develop a website like Amazon.

So, if you are wondering how much does it cost to build a website like Amazon, our rough estimate is a minimum of $78,300. To calculate this number, we used an average hourly rate for Eastern European development agencies, which is $50/hour.

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Why turn to Codica for multi-vendor marketplace development

As a multi-vendor marketplace development company, we have extensive experience in marketplace website development. We have successfully launched many e-commerce websites that bring high traffic, increase conversion and boost sales.

For example, we helped to build the first auto multi-vendor marketplace in Africa. The client asked us to build an online multi-vendor marketplace platform where users could sell or buy vehicles. Furthermore, our goal was to make the website convenient, with a fast loading speed, simple workflow, and optimise it for mobile devices.

As a result, we created a user-friendly multi-seller marketplace which is convenient for both buyers and vendors. Therefore, our client could successfully present the first product’s version to investors.

You can also get acquainted with other examples of the projects that our team delivered in our portfolio.

Summing up

Amazon is a perfect example of a successful e-commerce website transformed from a narrow book-selling platform into the complex and most visited marketplace in the US. It would not be easy to build ecommerce website like Amazon and repeat the success of the company which has been occupying the market for 27 years.

However, you can still succeed in the platform creation and launch. Follow the mentioned above principles and guidelines, then customize your product to make it unique and stand out from the crowd.

Are you looking for an experienced online marketplace development team that can create a website like Amazon?

Codica team has built multiple marketplace websites, and we will gladly help you to build a high-quality and money-making marketplace. Check our ready works or contact us to discuss your project.