How to Effectively Build an Online Marketplace from Scratch In 5 Steps

How to Effectively Build an Online Marketplace from Scratch In 5 Steps

Learning to build an online marketplace like Amazon, Ebay, or Etsy, is easier now than it ever has been before.

In the past, the job of gathering and enabling multiple vendors to sell on a single website, providing them with an effective selling online environment to market their products, and managing the inner-workings of their active marketplace was no cake walk to say the least.

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Paying for the development a website with these capabilities could cost tens of thousands of dollars alone, not to mention the added work of maintaining it.

Fast forward to today, however, and there are fantastic content management systems (CMS) with plentiful resources and automated tools available that let you build an online marketplace more affordably, and with much less trouble.

To learn how to build your own thriving online marketplace, check out our step-by-step guide below:

1. Determine your Value and Business Model

2. Pick an Effective Ecommerce Platform

3. Find Awesome Web Tools

4. Maintain an Effective Online Selling Environment

5. Launch your Marketplace and Grow

1. Determine your Value and Business Model

An image of a signpost with a depiction of a business plan

Before getting online, it’s important to make sure you have a viable idea to work with in the first place. After all, how can you build an online marketplace that works unless it draws genuine interest from other Ecommerce entrepreneurs?

Building a Customer Base:

Market research is a must to learn how you can effectively focus your marketplace for success. For example, what type of users will your marketplace cater to, and what will your marketplace provide that others already don’t?

Mainly, the most important thing to determine is whether your idea offers true value to your customers. If it does, you’ll have a much easier time reaching out and bringing vendors in.

Choosing a Business Model:

On top of stimulating your customer-base, you’ll also need to decide what business model your marketplace will operate under. Will you charge commission on each sale made in your marketplace, or offer subscriptions that allows sellers to market products instead?

Whether charging-per-listing, charging-per-sale, or something else, what matters most is employing a business model that naturally matches your marketplaces’ operations.

2. Pick an Effective Ecommerce Platform

Logo for the Magento Ecommerce CMS

While you can build an online marketplace through a variety of CMS, we prefer Magento for a few reasons.

As the most popular Ecommerce platform on the planet, Magento demonstrates incredible growth through regular upgrades, and endless third-party tools. It boasts easy usability and customization, with an endless supply of extensions that can add more to its Ecommerce capabilities.

Due to its high-popularity, Magento storeowners also enjoy access to endless support from in-house representatives and other fellow users.

So, in a nutshell:

The Magento platform comes packed with an assortment of tools that allow you to take steps toward creating an effective webstore right off the bat. And with a few extensions, you’ll be able to effortlessly modify your Magento website to build your ideal online marketplace model.

3. Find Awesome Web Tools

No matter which CMS you choose, it’s highly unlikely you’ll have everything you need to build an online marketplace that matches your business plan by default.

But as mentioned, Magento users have a huge extension marketplace they can browse for tools that get the job done.

Choosing the Right Magento Extension:

There are many options available that handle every aspect of the multi-vendor selling that’s required to build an online marketplace.

For example, this loaded extension allows multiple vendors to sell on a single store, and includes sales reports, inventory management, payment tracking, and everything else that one could need to monitor and manage a fully functional online marketplace.

Simply enough, after choosing Magento and empowering your store with an extension like this, your website will nearly be ready for launch.

4. Maintain an Effective Selling Environment

There’s nothing that deters online users more than a clunky website.

For example, this study shows that 40% of users leave webpages if they take more than 3 seconds to load. With data like this, it’s plain to see that slow and glitchy websites are a death sentence for online businesses.

Keeping your Website at Peak Performance:

If you don’t have the technical know-how to keep your website running at its maximum potential, consider sourcing outside help.

There are many maintenance services, and even Magento extensions, to help you maintain your website’s active performance. If you need to find website support suited to build an online marketplace of your own, try checking out these support and maintenance services for Magento here.

5. Launch your Marketplace and Grow

Once your online marketplace is built, it’s time to test it for actual use. Then hit the ground running.

A graph depicting a rise in business profits.

Launching your Marketplace:

Run tests, such as private in-store transactions, to ensure everything operates as intended before launch. At this point, the worst thing you could do for your new marketplace’s reputation is starting off with sloppy errors.

After your website is ready, it’s time to reveal your online marketplace and watch the results of your pre-launch marketing.

Growing your Marketplace:

Every successful online business becomes that way by adapting to the ever-changing nature of their market. This means staying informed is key to discovering the most profitable growth channels that your business should follow.

Customer traffic may seem slow at launch, but you can influence your rate of growth by monitoring marketplace statistics and making data-driven decisions. Transaction data and other business metrics can tell you which aspects of your marketplace are most profitable, and which need attention.

Staying Informed and in Control:

Continue to monitor your website closely, it’s the best thing you can do once your online marketplace launches to stay on top of the game.

Magento comes with multiple helpful tools by default, and many multi-vendor extensions add in more. Which is great, because intelligent data tracking is a surefire way to encourage your online marketplace to flourish, and the most useful ability you’ll have to appropriately adjust your future tactics.