Simtech Development

How to Create an Online Marketplace: From Idea to the First Customer

Roman Ananev

If eCommerce is the perfect kind of business for you, then you’ve already started your research and have the understanding that online marketplace is the most promising distribution model. We at Simtech Development help people from around the globe to create and launch their marketplace businesses since 2005. In this article, we’ll share our practical experience of creating online malls to get you ready for this exciting journey.

Find the idea for an online marketplace

How to Create an Online Marketplace: From Idea to the First Customer

The ideas are everywhere. They are surrounding you.

Look around

You have lots of things around you. Furniture, books, devices, clothes, windows, plants, doors. And, guess what, all these things consist of even more other things! Wood, fixture, glue, paper, ink, plastic, glass, cloth, soil, wires, boards, fittings. To have everything that is surrounding you while you are reading, you paid money.

Ask your friends

People are the best source of fresh business ideas. Why? Because they always want something. Better service, better products, better functionality. You can’t ask all the people for what they want, so friends are the best source of information. They have different personalities, different jobs, different hobbies and specific needs. They have children, some are vegetarians, some sing, some play football. One thing unites them – they pay money for the things or services. Make your friends happy and you’ll find out that there are lots of people out there who are just like them.

Take product segments

One way to do it is going small. Dedicate your marketplace to only one type of product, like pants. Or go deeper – men’s pants. Or even super deep – under-five-year-old-boys’ pants! This is about predictable pattern behavior – to buy car tires, you don’t go to the groceries store, you go to the tire shop.
Instead of going small, you can go big. Why sell real estate in one city when you can go global and unite sellers from other countries. Include land sales, invite local agencies to support deals, help with the visa for foreigners, help to migrate and get citizenship. Dare something no one dared.
The size is not the only feature for product segmentation. It may be the color. Simple as that. No one tried to launch a marketplace selling only red things or black, or blue, or white. If you want to buy a red outfit for your friend’s wedding, where would you search for it? On Amazon or in All-Red Marketplace? Probably you would visit both, which is already a 50% chance to get a customer.

Take audience segments

For example, you can build a marketplace of furniture for IT developers, or a multi-vendor service store for disabled people. Or here is a really fresh and daring eCommerce startup idea! An online learning marketplace for deaf people. Like Udemy, but with subtitles or sign language interpretation.
Referring to an association of dedicated people you get many vendors at once which is 50% of success. Gather all dental clinics across the country to help customers find the closest one and make an online reservation. Federal Dental Association can assist you with reaching all the clinics to make an offer to join your online marketplace and to become a vendor. Or consider sculptors. They also have their own associations across the world. They definitely have something to offer!

Follow big fish

All vendors on Etsy before selling something produce it and before that they buy the materials. Do you know where? You can become a supplier for Etsy vendors and provide them with everything they need – rocks, wood, cloth, thread, glass, sand. Keeping in mind that home-made producers like rare or unique materials, your marketplace of rare materials can rapidly grow global. Rocks from different countries, shells from different oceans, rare wood with unique characteristics or gems you can’t find anywhere else but in one certain place in the world. How will people find those things if you don’t help them?

Cover your local area

To find a good idea for you future online marketplace, you don’t have to look over the horizon. Go out into the street and look around! How many stores can you see? What kind of people are living or visiting your area. Are there lots of tourists around? Do they need cameras or bicycles to rent?
Or think about small, even tiny family shops around your city. For a small fee they can find new customers on your marketplace and extend their business over the whole city.
The best thing about local marketplaces is scalability! Finished with one city—move to the next.

Create a strategy of launch and growth (the Code and roadmap)

How to Create an Online Marketplace: From Idea to the First Customer

Before you even start moving towards your dream, sit down and do some paperwork.

Define your approach

Starting up a handmade product marketplace is a tough task while Etsy is out there. You need to make up your unique approach to stand out. Become your own customer and think of why you should buy from yourself. How are you going to attract visitors, create connection with them, convert them, retain them? The same for vendors – they are also your clients.

  1. Define your main values to create an emotional connection and empathy with your brand.
  2. Share vendors values. Create a shelter for like-minded people.
  3. Solve their problems. Get down to action instead of talking – start giving tools and solutions that make vendors’ and buyers’ life easier or more comfortable.
  4. Tell what makes you different. Compare your marketplace with your competitors – nothing wrong with that if you tell the truth.
  5. Tell why you’re worth giving a try. Provide the most engaging environment to make the first step with your marketplace. Don’t let them go away at any cost. Free stuff, extra discounts, trials, etc.


Write a plan of actions

Planning is essential to visualize your next step.

  1. Set up goals according to the stages
  2. Define realistic time frame to achieve those goals
  3. Plan the activities for every day to keep going to the goal continuously
  4. Set up KPI for every activity to be able to analyze the results and make amendments


Design a draft of your online marketplace

How to Create an Online Marketplace: From Idea to the First Customer

You don’t need any online tools to do it. Simple paper and a marker will do the thing. Just don’t go too far. The more you want – the higher the price will be.

Draw key pages layout

Think of the content blocks and elements that you need and how they lay on the page.
The main pages you need to think of are:

  1. Main page
  2. Gallery page
  3. Product page
  4. Checkout
  5. Customers profile

These pages are essential for the online marketplace. If you need more ideas about the important pages for eCommerce website, read a complete list of Must-have content for successful online store.
The blocks and the elements that you should consider might be:

  1. Banners (quantity, carousel, static)
  2. Galleries (Recommended, Bought together, For the same price, Sale)
  3. Filters (By color, size, brand, etc.)
  4. Breadcrumbs
  5. Pictures (background, thumbnails, logo)
  6. Text blocks (titles, descriptions, tabs, etc.)
  7. Reviews (text, stars, links)
  8. FAQ
  9. Social sharing buttons
  10. Tags (sometimes they also help)
  11. Subscription (in pop-up, in footer)


Think also of the vendor’s admin

What do you want them to see? Marketplace platforms include almost all necessary functionality into the vendor’s admin in default, but you might want something specific.

  1. Vendor-admin chat can speed up communication regarding technical issues
  2. Extended analytics for vendors may give them insights to sell more
  3. Extra design options will help vendors to express their individuality and engage more buyers


Make a list of features

Some functionality is in the back-end and can’t be drawn on the paper. Make a list of those features.
Tools on the storefront that may play the significant part:

  1. “Add to cart” button in the gallery
  2. “Quick view” button in the gallery
  3. One-click purchase button
  4. “Call me back” feature
  5. “Report seller” functionality
  6. Pop-ups to redirect, collect emails, offer discounts and promote
  7. Localization for currency, shipping, content, etc.
  8. Wishlists to track prices and share with friends
  9. “Order again” button
  10. Stock management system integrations
  11. Feed management system integrations
  12. etc.


Choosing a platform

How to Create an Online Marketplace: From Idea to the First Customer

Now you have a visualization and a clear understanding of what your marketplace will look like and what functionality and features it will have in its core. Now let’s get down to some technical research and find a platform for your business.

SaaS vs Software

The first thing you will bump into while searching a right platform for your marketplace is the variety of platforms. There are cloud solutions (SaaS) and downloadable software.
The SaaS type is very popular among eCommerce businesses for a bunch of reasons:

  1. Fast launch. You can build an online marketplace with minimum effort within a couple of days.
  2. Less expensive. Usually, the basic version is less than $100 a month. But extensions can significantly increase it.
  3. Hosting included. You don’t have to take care of server management. Instead, you focus on building your business.
  4. Security. It is up to your provider to take care of your online business security – software updates, firewalls, encryption, etc.
  5. New features. As long as you pay your monthly fees, you have all your important features for eCommerce business included. All new features that appear in the industry will be available with no extra charge.
  6. Strong community. If you have a question or experience any difficulties, you don’t really need to seek the assistance of technical support. Each popular SaaS solution has a community to help you out and share an experience.

At first, it seems that a SaaS platform is a perfect solution. But what if you need to modify a feature to perform something the way you need? Like a payout system for international vendors or shipping methods for different locations. You just can’t. To have more flexibility and customization options, business owners turn towards downloadable software. But they pay more money for that and dedicate more time to change code, moderate and take care of servers and security.
This is what more mature businesses that outgrow SaaS offerings are expecting from the platform:

  1. Customization. A freedom of choice for your design, layout, features, integrations and the way all that interacts.
  2. Control. You have everything in your hands all the time. You can choose servers and influence your marketplace performance speed. You have open access to code, which means you have the world in your hands.
  3. Independence. You are not limited with features offered by third-parties – you can develop and use them without monthly fees. Moreover, if you develop features for your marketplace, you can be sure they will be compatible with your platform and existing modifications.
  4. Ownership. The downloadable online multi-vendor software will cost you much, but it’s a one-time investment. Forget about a couple of hundred bucks. The price starts from over a thousand and can go up depending on your preferences. But you pay for the license only once. There’s no monthly fee. It is yours forever. The investment will return in time. Moreover, all settings and presets will stay with you if you decide to close a marketplace and start another one – just change your domain.


Some technical staff you need to consider starting an online marketplace

How to Create an Online Marketplace: From Idea to the First Customer

There are more hidden things you need to know to go into eCommerce with a multi-vendor solution.

Types of hosting for eCommerce

After a long research of the hosting services, you will come to the conclusion that not all of them are meant for eCommerce. Your hosting has to be fast, secure and ready for traffic spikes.
Cloud Hosting. The most popular and widely spread type of hosting due to the provided level of sustainability, security, and flexibility.
VPS (Virtual Private Server). Almost the same as cloud hosting but with one important difference – you have access to the server control. It’s a compromise between a cloud and a dedicated hosting.
Dedicated Server. The most expensive option. Entirely yours physical server machine with all resources at your service.
Read How to Choosing the Best Web Hosting Service For Your Online Business.

Choosing the domain name for an online marketplace

Choosing a domain for an online marketplace is almost the same as choosing a company name. It is your brand online. That’s the word your customers will associate your business with. It can be a success or a complete failure.
Here are a few tips to help you choose the right domain name:

  1. Be comprehensive. Use existing words that most of the people know how to type.
  2. Keep it short. Less typing – less mistakes. It’s also easier to remember.
  3. Use a keyword. Use one keywords in the domain to describe your products to engage customers.
  4. Targeted area. If you are a local marketplace, say it in your name to build trust of the local audience.
  5. Be memorable. It’s hard, but if you have a catchy name, you are more likely to get direct traffic.
  6. Beware of trademarks and copyrights. Or you can lose the entire business. At least make sure you are not in the same industry with the copyright owner.
  7. Consider different extensions. To cover other regions and to make sure no one else can register another version and steal your audience.


Load speed optimization

Even if you have the best design for your marketplace, useful features, unique products or services, super secure protocols applied and an unfrogettable domain name you won’t make it to the end of the month if the customers close the window because the page just won’t load!
Here you go with a checklist of how you can raise your page load speed:

  1. Minimize the number of elements on your pages. Loading each element takes time.
  2. Put scripts to the bottom of the page. Let your visitors see the body of the page first.
  3. Combine different styles into one. Make page rendering faster.
  4. Reduce server response. Choose the right hosting and use CDN.
  5. Use compression. If you have large pages over 100kb.
  6. Optimize the code. If you have an ability to edit code, make sure to delete extra spaces, line breaks, and indentation.
  7. Optimize images. Use JPEG, adjust images to your page aspect ratio, resize them to web preferences.


Mobile interface

Though you can start an online marketplace without a mobile storefront but in a little while you will understand the importance of having it. Mobile shopping is a strong and growing trend. Most eCommerce platforms already offer responsive themes to their clients. People are not giving up shopping offline or using desktop, but the times are changing. Next generation is coming and they will do more things using mobile. Probably they will have even less time for themselves than we do and will buy everything on the go.

How to Get Vendors for Your Online Marketplace?

How to Create an Online Marketplace: From Idea to the First Customer

Reaching your future vendors is not only about the place to search for them but also about the right way to contact them, how to make a good first impression and how to make the first offer. It’s easy if you want to see big players on your storefront. They all have business emails and understand business language. But most of the vendors on successful marketplaces are individuals. That’s the point of any online marketplace – anyone can sell on it. Being the founder of a marketplace, you will have to make an approach to all of them. Sometimes it takes quite an effort to personalize your offer.


There are millions of firms providing millions of services and producing billions of products! All of them have business addresses and direct contacts. You can find them in Yellow pages or LinkedIn. There are also companies databases being sold on the web. Unfortunately, none can guarantee that the contacts in those databases are valid, but some can be trusted. It is up to you to take a risk. It is not very expensive but it will give you a time advantage if you get lucky with a list. This way is appropriate if you are about to cover hundreds or thousands of vendors in a certain industry niche. Consider that sending out emails massively may cost you money. Or time, if you decide to do it manually with your Gmail.

Phone call

If you have only around 100 vendors on your list, the best option for you will be contacting them by the phone. You will receive immediate feedback and those who agree to join you on your eCommerce adventure will start acting right away. Moreover, you will have a chance to know those people better. 100 calls can be made within only one day! Ok, two days of lazy work.
Talking on the phone also needs preparation. You are not going to talk to a friend, but you have to become one by the end of the conversation. Unlike sending emails, talking on the phone will require lots of explanation. People are not expecting your offer. Maybe, they don’t even know, what is online marketplace. Reading an email, they can just close it, but talking on the phone with the founder, they have a chance to ask questions. And they will. Answering the same questions multiple times is quite exhausting but look on the bright side. While you keep talking people stay on the hook – they listen. If they listen, they allow you to influence their attitude and point of view. And this is a powerful opportunity for you.

Meet your vendors

Starting an online marketplace for a local community like a city or even a district gives you the most powerful lever for your success – personal meetings. Put on your best suite and black leather shoes and visit your future vendor residence. Make a good impression and your marketplace will have a face, not only a logo. What can build a better trust to a person than a handshake? Moreover, meeting your future vendors lets you demonstrate your marketplace live with your own hands. You know it better than anyone and can show the best of its features. And you can even register a vendor account right here and right now. This way of attraction can take lots of your time, which will return as the rust. But prepare to be patient and self-critical. Vendors can start telling you something they don’t like about your online marketplace. Don’t get mad! Remember, negative feedback can be even more valuable than positive. It will give you an idea of how you can improve your business.

Launch social campaign

Companies are already there looking for additional sales  channels and almost ready for your offer. But what about individuals? You can’t write emails to all the people in the world, you can’t call or visit them all. How will individuals find out about your excellent multi-vendor marketplace and their opportunity to make money with it? You have no other option than start a social advertising campaign. Everyone is in the social networks. Social media will give you almost immediate and powerful response!

Launch Google ads campaign

Another instrument you can use to attract a massive crowd to your multi-vendor store is Google ads commercial. Yes, again you will have to pay. But we want to make money tomorrow, don’t we? So we have to make a powerful move today. Remember a golden business rule: the more you invest in your business, the more you have in return. Don’t rush, if you have financial limits. Start with narrow geographical or interest targeting. Watch out for the click-bots and block locations where they operate immediately.
Starting a commercial campaign in Google or in social networks think of where your future merchants will land. Having a friendly and informative landing page is vital. Give people comprehensive information about your marketplace, monetization method, their prospects becoming your vendors, leave your email and a phone number, not only a contact and registration form. You can be funny or serious, you can make mistakes or use aristocratic vocabulary – it doesn’t matter that much. Honesty is the core. Make people believe you and they will believe in you.

Record a video

There is another channel of attracting people to sell on your marketplace – Youtube! It will demand skills in making videos, your imagination and a pinch of luck. But it’s free and can go viral and lead thousands of sellers to your marketplace. Making a popular video is quite a challenge. The emotional hook, which is the point of the promotional video, will not only bring you vendors but will also build their loyalty from the first contact with your marketplace business.

Success stories in the blog

Blog is also a very good way to attract people to sell on your marketplace. Success stories of your existing merchants, business insights, market overviews and other useful information for sellers keep them close to your business. Moreover, search engines love blogs. If you write a useful post on how to become a successful seller on your online marketplace, in a little while you will find a link to it in Google search results. It’s free, it’s useful and it’s forever. Blog obviously is not the best instrument for the market impact. But it’s perfect for continuous growth.

Promoting your marketplace

How to Create an Online Marketplace: From Idea to the First Customer

Promoting marketplace takes pretty much the same effort as any other online business, but the following are some points that may differ.

  1. Create a plan. Yes, again. This is business and it likes planning and achieving.
  2. Social media is a free and effective tool. Instagram and Pinterest will be your primary as they involve pictures in the first place and that’s what works for eCommerce business.
  3. Press coverage can help propel your business to success. From there, get in touch with magazines you are interested in an email the relevant editors.
  4. Build up a mailing list. This is an important channel to return customers and retain them with your marketplace.
  5. Tell the story. Start blogging and involve your vendors to write. Let them tell about themselves and their products as they will do it better and more efficiently then for you. Don’t chase the quality first as your authors won’t be professionals in this aspect. More importantly, they will bring in their personality and experience which is more valuable to the customers that get emotionally connected with them and, as a result, with your marketplace.



Launching an online marketplace can be difficult. It takes lots of planning, scheduling, analyzing and communicating. But the prospects are worth the effort and time. If you have a niche idea but not sure if this is the right time to start, write us an email for a free consultation. Don’t hold it for yourself, get a valuable feedback from the eCommerce professionals.

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