multivendor marketplace

E-commerce marketplaces are constantly showing a growth trend. That’s why lots of people, inspired by the success of top e-commerce marketplaces as eBay and Amazon, are attempting to figure out how to create a multi-vendor marketplace. But before your multi-vendor e-commerce marketplace becomes can thrive and get plenty of visitors per month, there is much work that must be done. Our team has passed through all phases with customers, from idea development to implementation. This article aims to give you several helpful insights that will assist you in planning and developing a multi-vendor marketplace.

What is a Multi-Vendor marketplace?

It is an online marketplace in which more than one customer and merchant initialize or conduct transactions. It links customers and merchants at one platform to let them search out each other, scale, and manage their business effectively.

Why Create a Marketplace with Magento 2?

While searching for the best platform for a marketplace, you may need to consider five or even more CMSs. Certainly, each CMS has its own advantages and disadvantages. Thus, to choose the most appropriate platform for your needs, you should clearly understand the needs of the business, business cases that must be met, available timelines for the development, and your estimated budget.  It is highly recommended to make a minimum viable product (MVP) in the initial stage of the business to gain unique information and confirm or disprove hypotheses. This is a well-known and proven approach in starting up websites in a highly competitive niche and/or limited budget. We advise selecting the Magento platform, as it is regarded as the best e-commerce CMS with a 29% market share. Magento provides smooth functionality. Most importantly, Magento is scalable, secure and highly customizable. In brief, this platform provides everything a marketplace owner could dream of. Magento is presented in a few plans which fit different sizes of businesses. The open-source, free Magento 2 Community Edition is a great choice for small businesses. Magento 2 Enterprise Edition costs from $22,000 to $125,000 per year, and suits the best medium- and large-sized companies. The final cost depends on the business’ gross sales revenue. To prove that Magento 2 is the best choice, we have analyzed all the benefits of this platform, which are specified below.

High performance

The crucial characteristic of any Internet resource site, and especially for online marketplaces, is speed. An e-commerce website’s potential to convert site visitors into clients can be reduced because of any delays in processing users’ requests.  The Magento platform possesses high-end caching techniques like Varnish, and also provides other database optimization techniques that allow users to obtain error-free and timely results. The community of Magento specialists has a special statement about website performance: “Your requests must be processed one second ahead of your competitor’s”.

Offers more than 50 payment gateways

Magento supports an extremely wide spectrum of payment solutions and gateways that offer trading services all over the world. A payment gateway allows your store to process credit card payments immediately, in contrast to some payment solutions which transmit the control to complete the transaction to another site. You can also integrate Magento marketplace with other payment providers, using a Magento payment provider gateway, if its list does not contain the item you need. By default, such services as PayPal, Stripe, or Skrill are available out-of-the-box.

Considerable selection of extensions & modules

Nowadays, Magento has the greatest selection of extensions. On Magento Marketplace, it’s easy to find almost any extension. Before being loaded to the marketplace, all the extensions are accurately checked. So that you can find what you’re searching for more easily, extensions are divided into categories and have several reviews from current customers. It is important to pay attention to extensions’ ratings and reviews because this way you will have direct feedback, which our team finds helpful when choosing both paid and free extensions.

Simplicity of integrations

Magento is an associate of plenty of Magento 2 marketplace software providers. The goal of their collaboration is to make integrations as simple as possible. There are lots of classes, such as CRM, email gateways, ERP, migration tools, social media marketing tools, back office, warehouse management, and shipping. The permanent leaders of the marketplace include giants such as Xero, Salesforce, Hubspot, Mailchimp, and ShippingEasy. These have proven to be very reliable and offer good value for money.

Great community

There are more than 150,000 developers who work on platform improvement day by day. As CreativeMinds reports, more than 250,000 sellers use Magento, which means you’ll never be alone if you have any problems with the platform. Moreover, there is a dedicated Q&A website for sellers where merchants can ask for help.


How to Create a Marketplace like eBay

Online marketplaces such as eBay or Amazon appeared a long time ago. That became the reason why they had to start everything from scratch. Nevertheless, developing a multi-vendor platform using modern e-commerce technologies is no longer that difficult. If you are determined to build the best online marketplaces for merchants, some areas should be explored in advance so the pitfalls are found before they become obstacles that are hard or costly to overcome. We at Paspartoo recommend doing comprehensive competitor research to find out your own advantage that your customers will value your website for.

Research of the market

Vast market research is the first thing to do before starting the process of development. To succeed in retail, you have to understand your target audience and know how to satisfy your potential customers’ needs. Even more importantly, define who your buyer is and who your end-user is if your product or service is very specific. For instance, the target audience of Amazon consists of users in the 18-44 age range. To provide customers the journey and features they expect, the most important point is to understand both future marketplace retailers and buyers.

Ideal domain name

One of the most crucial points is choosing the right domain name. It is like a physical address. That is why the domain name has to be short and easy for people to remember. Our advice is not to use domain names that are associated with famous brands and trademarks, but are unique and self-explanatory. You can get a domain name by utilizing one of the web hosting services. Some of the most popular and reliable providers that we have worked with are specified below. We choose GoDaddy, as this company provides over 59 million domain names at an affordable price, and are likely to have exactly what you are searching for. Additionally, we established a good collaboration with hosting provider Bluehost, which also supplies a lot of well-known websites with high-performance servers.

Powerful server

One more point to consider when starting an online marketplace is service provider selection. It’s important to remember that your future website has to handle constantly increasing traffic from various geographical regions. Your marketplace platform has to be robust to prevent users from waiting long for a response to their actions. Nowadays, it is unforgivable to make users wait, and such detail can make a significant but not obvious impact on user conversion or any other metrics. For users, data management and storage are possible without purchasing a local server, which also prevents you from taking care of their maintenance.

Multi-Vendor E-commerce Website Development Cost

If your business plan needs custom development, the cost will vary from $10,000 to $100,000. When building customized multi-vendor marketplace software from scratch, remember that the cost depends on your demands and features. As clients usually expect to include all modern features, the cost could even be $150.000 or more. Meanwhile, creating a Magento-based website like eBay, using ready-made scripts, costs less. From our experience, we can say that using Magento Community edition it’s possible to get a top marketplace with up-to-date features for $750. However, the price of development depends on which company you choose, the ability of the developer and designer, and the developer’s country of residence.


We have answered the question of how to start a multi-vendor marketplace website. Its creation helps to refine the current business model. Although building the site may be challenging, the results will justify the efforts expended. To get a consultation for your e-commerce project, feel free to contact us!