How To Build An ECommerce Marketplace For Future

How to Build an eCommerce Marketplace for Future

by Ankush mahajann — 3 years ago in Development 11 min. read

Whether you are planning to invest in a new business venture or looking to augment an existing one, the success achieved by the eCommerce marketplaces world over is hard to ignore.

The paradigm shift towards eCommerce has been expected given the continued development and improvement of digital and logistics infrastructure. Better devices, faster internet and technological advancements have further fuelled this growth. But despite that, the B2B multivendor market is yet to reach its full potential. The current scenario is just a taste of things to come.

The eCommerce Impact!

Consumers spent $861.12 billion online with US retailers alone in 2020, up 44% from $598.02 billion in 2019 (source Digital Commerce 360 analysis). Even though CoVid has hastened this growth. Still, it’s slated to grow even further in 2021 and beyond. According to a forecast published on Statista, gross revenue in the eCommerce market is expected to show an annual growth rate (CAGR 2021-2025) of 6.3% resulting in a projected market volume of US$ 3,477,296m by 2025.

This elucidates an enormous potential in the market as exemplified by innovative startups like Taobao, Depop which are carving out their own niche in the eCommerce ecosystem and, whilst “old-timers” like Alibaba and Amazon continue to rule the roost.

Brands that still have just a conventional brick and mortar presence are starting to lose out on their brand value and consumer loyalty. The £1bn loss suffered by Primark being the latest case in point.

Covid has confined everyone to their homes. A trend that is likely to continue in the immediate future as well. eCommerce marketplaces have been the savior during these testing times for businesses. They give a near-perfect shopping experience to the buyer.

eCommerce is all about volumes, delivering unparalleled value to the buyer. With the world economy reeling under the covid impact, people have been becoming increasingly circumspect on their spending, making the value proposition offered by eCommerce (especially multivendor) marketplaces even more significant. This is another factor that is driving traffic to various eCommerce marketplaces.

Advantages of an eCommerce Marketplace over a single vendor eCommerce store

Higher Volume:

The sheer volume that a multi-vendor market can potentially create redefines the business strategy of the marketplace. More volumes would result in more revenue, but it also opens doors to innovative marketing strategies, further attracting more customers to the marketplace.

More marketing Options:

Bigger revenue also makes it possible for the marketplace owner to offer significant discounts and employ other similar marketing strategies, both for vendors and buyers.

Easier to sell Niche Products

Reaching a larger audience is easier. multi-vendor marketplaces make it possible to reach out to an otherwise unfathomable number of buyers. This also makes it easier to sell niche products.

Generates higher revenue in the form of Advertisements:

A larger customer base will make it easier to attract advertisements in your marketplace, thereby further increasing the revenue.

A better platform for the vendors 

Different vendors feed off each others’ success and product range. A buyer, for instance, would consider shopping for product accessories along with the product being purchased. A notable mention here is the marketplace solutions that have the smart recommendation feature, wherein related products are displayed enticing the customer to buy more.

More ROI 

The initial investment may be more in the case of a multivendor store as you go about setting up the infrastructure and the rest of the paraphernalia, but so is the ROI.


Getting off to a start

Just like any other business venture, the biggest challenge for a multi-vendor eCommerce marketplace is the start. The initial stage is all about garnering attention and convincing potential vendors and establishing a loyal customer base. And this is where the dilemma lies.

Just like the chicken or the egg paradox, this is a similar conundrum where it is difficult to identify a starting point. Both adding a vendor base or adding a customer base are interconnected and can’t happen without the other.

Issues with the software

If you have customizations done on the software, you might face an issue initially getting used to it. After-sales support is a crucial factor when you choose a multivendor marketplace platform. In fact, the software company must keep you abreast of the customizations during the development stages as well.


After achieving significant growth, an eCommerce marketplace will need a scalable platform. It is imperative, then, to choose a platform in the first place that offers scalability. 

Speed Issues

According to data published by, nearly 70% of users say a website’s slow loading time affects their decision to buy. What’s palpable but more concerning for an eCommerce website is that 14% of the users said that they will close the tab and visit a competitor’s website. That loss of business impacts the future of your business venture as well. This makes the speed performance of your marketplace a crucial pain point that you have to address.

A check on the quality of products & services  

The end-user will inevitably judge your business by the quality of products and services on offer. Thus the brand image of your marketplace hinges on this factor.

You must opt for a multi-vendor marketplace software that gives you complete control over the vendors and products on offer by them. Moreover, it should provide you with a complete statistical overview of your marketplace. Additionally, it should let the end-user review the products on offer.

Business Models of eCommerce Marketplaces

“Chase the vision, not the money, the money will end up following you.” – Tony Hsieh (Zappos CEO)

A successful multivendor marketplace would warrant an in-depth knowledge of the market and a little bit of intuition as well. Above all, you would need a business strategy based on a robust business model. It is prudent then, to have a look at various business models that are possible.

B2B eCommerce Business Models

Business-to-Business eCommerce or in short B2B eCommerce is when transactions take place between businesses. Thus, a marketplace that connects businesses is essentially based on a B2B business model. It can be achieved via the following arrangements.

Marketplace focused on the buyers

Such a platform allows a business to post its requirement, following which interested sellers can respond with their quotes and product description. The buyer can then analyze and select which seller to buy from. Thus the business is initiated by the buyer by posting the requirement. This model is suitable when the buyer has a bulk requirement of a significant value, such that multiple sellers may be interested in selling.

Marketplace focused on the sellers

This is the lopsided version of the buyer focused model. Such a platform allows sellers to post the products or services they wish to sell. They can set the prices, minimum quantity available, shipping time, etc., and display it in their posts.

Buyers can log in to the marketplace and order the product or service they feel is best suited for their business. Thus the business is initiated by the seller by posting product details. This model is suitable for business transactions of all values, such that buyers can choose the product or service according to their needs.

Marketplace set up by intermediaries

This is a marketplace that is initiated by intermediaries. It provides a platform wherein the buyers and sellers can connect and conduct business. A prominent example of such a marketplace is This marketplace is owned by intermediary Alibaba Group Holding Limited. It connects Chinese manufacturers as sellers, that post product details on the marketplace and buyers across the world who can buy the products as listed.

Revenue Models

There are multiple ways to generate revenue from your eCommerce marketplace. Some of the popular models are.

Subscription model 

This is when revenue is earned through periodic subscriptions. This model can work in the case of a very price-sensitive market. The vendors would be able to price the products competitively. The benefit would further be passed on to the end-users, thereby adding on to the value chain. This model also ensures that only those vendors register who are serious about selling. This is an automatic method of filtering fake and poor-quality products. The vendor pays a periodic fee to get listed.

The biggest advantage of this model is that there is predictable and recurring revenue and a vendor base that is likely to stick around provided they find value in your offering.

Commission model 

In this revenue model, the marketplace owner can charge the vendors a commission on each successful sale they achieve on the marketplace. Thus each transaction on the marketplace will result in revenue for the marketplace owner.

Charging commissions on transactions makes it easier to add vendors to the marketplace. The vendors don’t have to pay anything to list the products and are charged only when a successful transaction is made.

But this model also attracts fake leads and vendors who may offer below par products. So the overall reputation of the marketplace in offering quality products can be affected. Although this can be countered to a point by letting customers review products.

A good marketing strategy will increase earning potential. Affiliate marketing will go a long way in generating traffic towards the website. 

Revenue earned from advertisements

In addition to the aforementioned methods, you can also earn by allowing advertisements to be displayed on your website. You can monetize these ads by two methods i.e.

  1. You can charge per click, or
  2. You can also charge per impression

You can sign up with services such as Google AdSense, Amazon affiliate program, etc.

Hybrid Model

Ideally, you would want to combine more than one revenue model for an innovative model that brings out the best of both worlds. For instance, you can keep a commission model but introduce a subscription model that lowers the commission for vendors. There is room for a lot of creativity and innovation in designing your business strategies.

eCommerce Marketplace Features

Ideally, you would want a comprehensive ecommerce marketplace that can give you all the required core features. This will give you an edge over the competition. And to make things even better, at a competitive price, that can save your precious investment capital for all the things that follow. Listed below are must-have ecommerce marketplace features.

Requisite Architectural features 


With time your business will grow, your marketplace should be able to grow accordingly. Thus, scalability, that too at competitive prices, is a fundamental feature of a multivendor marketplace.

API integration: 

To enhance the functionality of the marketplace, you would want it to have integrated API(s). So whether you would like to manage shipping via Shipstation or manage newsletters and other communication via MailChimp or you want the intuitive support of analytical tool such as Facebook pixel, the multi vendor marketplace platform should support it. Another critical addition is QuickBooks API that lets you manage Finance. Efficient finance management is the backbone of any successful Business

The marketplace should let you reach a global audience: 

The ecommerce marketplace should house all the features that let you set up shop for a global audience. This could be part of your business model initially or something that you may plan later. Tax management, multilingual support are some of the features that you would need in such a scenario.

Essential features for admin to ensure complete control over the marketplace.

Robust Reporting: 

A good ecommerce marketplace software will give you all the insights in terms of statistics to give you the complete picture of the health of your business. This information is also crucial whilst taking decisions that determine the future of your business.


Each business is unique and so should be the marketplace. Customizability is an integral feature of any eCommerce platform. And in this regard, the more control you get the better it is. It will help you establish a unique marketplace that looks and feels custom created for your business based on your brand ethos.

SEO friendly Content Management System & other marketing features

Marketing and increasing brand awareness for a business carry on in perpetuity. Thus, the marketplace should have an extensive list of SEO and marketing features. This includes an SEO-friendly CMS and an option to use blogging to reach a wider audience.
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Indispensable features to ensure ease of business for vendors.


It is paramount that the ecommerce marketplace software is built on a secure platform. A secure platform will guarantee that all sensitive information stays safe, payments are done through a secure platform and the marketplace can ward off hacker attacks, notably blocking XSS and CSRF.

Multiple Payment Options

A salient feature of any good multivendor platform is the provision of multiple payment options for the buyers. The payment platform should also be thoroughly secure.

Essentials for analyzing customer behavior:

Online marketing is based upon establishing a conversion funnel. For that very reason, analyzing customer behavior is central to achieving just that. Your multi Vendor marketplace ought to have features such as abandoned cart,

Product Management: 

Critical features such as product catalog management, data migration, etc. are necessary for the vendor to manage and display the products within the marketplace effectively.

Key features for enhanced UX for the end-user that ensures customer satisfaction and higher conversion rates.

Comprehensive search bar and predictable navigation 

A key UX element of an eCommerce marketplace that is vital to customer satisfaction is the integration of a comprehensive and elastic search bar. The more accurate the search results the more chances are of a completed transaction. Additionally, the marketplace should provide easy and predictable navigation that makes it easier for the end-user to browse through the website.

Mobile apps/ PWA/ responsive website

The multivendor marketplace needs to be accessible on the plethora of screen sizes and platforms that the buyer ends up accessing. For this reason, the website should be responsive on all screen sizes. Additionally, there should be provision for apps on both android and IOS. An added option of PWA (Progressive Web Apps) is quintessential as well.

Top 5 eCommerce Marketplace Platforms Examples:

In case you are wondering how to start a multi-vendor ecommerce marketplace, the two possible options are as follows.

You can either start coding from scratch or opt for a turnkey ecommerce platform. If you opt for the former approach, you will need to invest funds and more crucially time. But if you build upon a turnkey platform, you will save a lot of time.

This saved time, you can invest in bringing vendors on board, marketing your marketplace, and building the conversion funnel for your project. eCommerce is a dynamic market, time lost is an opportunity lost. It may be prudent then to start with a marketplace platform.

The top 5 multivendor ecommerce marketplace platforms are listed below    

1. Yo!Kart: 

Customizability, flexibility all rolled into an inherently secure and cost-effective platform. It offers both mobile apps and PWA (Progressive Web Apps) on android and iOS platforms. The website is intuitive and responsive as well. It is also backed by 1-year free tech support and a month’s access to Digital Marketing services. Yo!Kart is available at a one-time payment.

Key Features: Its key features are Product Catalog System, Advanced Tax management, multilingual (including RTL) support, downloadable reports, ability to export and import data in CSV format, Third Party API integration, Elastic product search which provides results within 10ms, SEO management, ability to add metatags to listings, etc.

Testimonials and customer feedback indicate a good (alternatively excellent) customer experience. Notable mentions include appreciation for stable and rich-featured software available at a very competitive price. Customers are also all praises for both their pre and post-sales customer support.

Examples of existing clients: Uni-Diamonds, a diamond distributor, based out of Israel. Yo!Kart has also published an extensive case study of the same on their website.
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2. CS-Cart: 

CS-Cart, has been around since 2005. It is a product by Simtech Technologies (based in Russia) and is one of the more popular choices amongst eCommerce marketplace platform solutions. It has customizable themes and mobile apps (both android and IOS platforms) to boot. It offers a decent amount of features, albeit at a premium over its competitors. CS-Cart is available at a one-time payment.

Key Features: Its key features are namely marketing features such as the option of sending newsletters and mass notifications, Tax-Management, import/export tool, data feeds, advance vendor payout system, bulk product editing, etc.

Customer reviews highlight its intuitive design tools and customizable themes.

Examples of existing clients: Nguyenkim, an online electronic supermarket, based out of Vietnam.

3. Shopify with marketplace

Shopify is a popular choice for a single store eCommerce solution but it can also function as a multivendor marketplace albeit with an extension called “marketplace”. This module has been developed by Webkul. Shopify is a SAAS-based software.

Key features: The marketplace module has all the basic functions like product management system. It is built on PHP. It is easy to use and allows decent customization.

Customer Feedback indicates satisfactory response, although customers are critical of the lack of features without installation of plugins and delayed response from the technical support team.

4. Prestashop 

Prestashop is a free open-source eCommerce solution. It has all the necessary features and more, but it requires coding prowess to set it up. In other words, you will need a team to work on it. Getting accustomed to using it from the admin’s panel takes time as well. It can be made into a multivendor marketplace by a module from KnowBand.

Key Features: It can be self-hosted or hosted from the cloud. It offers endless customization in the form of themes. It also has a store builder and eMarketing options. Additionally, it offers API integration as well. If you need support, Prestashop offers paid support. KnowBand extension has all the common features along with a free 3-month subscription.

Customer feedback on Prestashop is good. Customers appreciate features and customization but also highlight the fact that time and money have to be invested in setting it up and in garnering the ability to utilize it to full effect.

Freemium to be precise. The software itself is free, but all customizations in the form of themes and all functionality in the form of modules are paid.

KnowBand is an independent company and has no relation to Prestashop, France.

5. Magento with Marketplace 

Magento is a popular open-source single store solution. Just like Shopify, it can also function as an ecommerce marketplace if a module developed by Webkul is used with it. Although webkul has similar modules for Shopify and Woo-commerce, but, this module has the reputation of being more robust out of the lot, especially considering it has been developed by a third party

Key features: The marketplace can be customized. There are features to add and edit products and their reviews on them. It offers API integration as well. There is 3-month free tech support on offer.

Customer Feedback indicates sufficiently good response, although customers are critical of having to manage 2 dashboards, the absence of stripe connect, and some key API’s being paid.

Example of an existing client of Webkul Marketplace extension: Labx

Webkul is an independent company and has no relation to Shopify, Inc which is based in Canada, or Magento, Inc (An Adobe Company)
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The world is moving towards eCommerce. According to a 99firms prediction, by 2040, 95% of all purchases are expected to be via eCommerce. This makes the decision to start an ecommerce marketplace possibly the best business decision in 2021. There are multiple business models and revenue models to choose from. Make an informed decision, based on the market you want to tap onto, the working capital at your disposal and the business strategy you want to adopt.

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