How to create an online marketplace like Amazon, eBay, or Etsy

Online marketplaces have $2.03 trillion worth of goods, accounting for 58% of global online sales in 2019. Many businesses want to try creating an online marketplace like Etsy, Amazon, eBay, Alibaba, and others. But how does one start a website like Amazon? The WishDesk web development team has broad experience creating online stores and we would like to share our ideas on how to build a multi vendor marketplace.

For anyone who is interested in building a marketplace website, we are going to start our study with defining the key e-marketplace types.

Types of online marketplaces

E-marketplaces fall into three main groups:

Vertical marketplaces present multiple vendors that specialize in the same niche. Examples include platforms like Zillow, Stock, or Chegg.
Horizontal marketplaces sell goods in several categories that are united by a certain common characteristic. For example, DogVacay only sells products that are interesting for people with pets. Other examples include Etsy, Poshmark, Dote, etc.
Global marketplaces sell everything to everyone. They have a wide range of product categories and vendors. Among the examples are Amazon, eBay, AliExpress, etc.

The most popular online marketplaces among vendors

According to Statista’s survey, the most popular vendor option among the US online marketplaces is eBay. Vendors were asked to rate the marketplaces on a scale from 1 to 10. In this rating, four key factors were evaluated – profitability, customer service, communication and ease of use. Sellers were also asked whether they would recommend the marketplace to others.

How do online marketplaces make money?

If you want to build your own marketplace, these are the most cost common ways for e-marketplaces to make money:

seller subscriptions/memberships
commission on items sold
referral fees/lead generation revenue
featured listings
affiliate programs
advertising
freemium packages (with extra paid services)

It should be noted that marketplace giants often have a wide array of services in addition to their marketplaces. For example, Amazon also has Amazon Web Services, Amazon Go, physical stores, and more.

However, consider the impressive outcome from their marketplace website alone. In the 1st quarter of 2020, the global net revenue of Amazon is:

$36.652 billion in onlines stores
$14.479 billion in third-party seller services
$5.556 billion in subscription services

How to make a site like Amazon: must-have features

Websites like Amazon are built around the same essential scope of features that help buyers and sellers reach their goals seamlessly. These include product listings, shopping cart, website search, payments, shipping, notifications, support chat, admin dashboard, and more. Each platform can have additional unique capabilities according to each customer’s ideas to make a marketplace website that brings conversions.

Here are the must-have features that are necessary to build a marketplace website like Amazon:

One-click ordering

Features like Amazon’s “1-Click” button for ordering are game-changers in online commerce that significantly increase its user-friendliness. Customers enter their billing, shipping, and payment information once and then they just hit one button to make an order. This one button replaces a set of actions like payment and shipment. The system waits for 30 minutes after the “1-Click” button clicks, so customers can continue their shopping and add other items.

Registration and user profiles

There are two basic user roles on a marketplace — buyers and sellers. Accordingly, your marketplace website will need these two types of profiles where users will enter the necessary information and update it when they need to.

Buyers are usually asked their names, email addresses, and passwords. They need an option to add a delivery address or a payment option. Their profiles also contain features like an easy-to-check order history and wishlist.
Sellers need to provide their company names, addresses, phone numbers, tax information, etc. They need to be able to edit many details from their account settings to payment methods.

Switching profile types

In answer to the question “How to make an ecommerce website like Amazon?” the following feature is very desirable but is probably not a must-have. This feature allows buyers to become sellers within the same user account. This is very convenient when they want to switch from buying to selling and vice versa. Logging in and out every time is time-consuming.

Homepage

Starting from the marketplace homepage, customers need to see a clear navigation system, product filters (by location, price range, or other factors), relevant product suggestions based on their viewing or purchasing history, a section of last viewed or popular products, etc.

Advanced product search

Due to a wide array of products, an advanced search feature is a must for online marketplaces. For example, to help buyers find the desired things among 12 million listings, Amazon uses a searching algorithm called A9 that sorts the products by multiple aspects of the customer’s behavior.

Product pages

Sellers on your marketplace need the ability to easily create new products and manage them. They should provide as many details as possible (description, price, high-quality photos, availability, warranty, delivery info, etc.) Good descriptions help buyers make decisions and are also useful for SEO. To encourage sellers to enter as many details and make the process easy, you can use features like autocomplete forms, error corrections, category recommendation, etc.

Product images

To make product images more informative and helpful for boosting sales, Amazon imposes a few image standards. For example, images should occupy 85% of the frame, have sufficient dimensions (measured in pixels), be presented against a white background color, use only the specified formats (JPEG, PNG, GIF, or TIFF), etc. You will also need to apply image optimization techniques to make all the uploaded images look consistent and never slow the website down. Marketplaces like Amazon often use a photo slider that shows the product with all its details.

Product videos

E-commerce product videos are able to show products from more angles, which makes them a lead generation technique that is on the rise today. So one of the answers to the question of how to build a site like Amazon is to offer a video option for your vendors.

Wishlist

Be sure to include a wishlist as a key marketplace feature that increases user engagement and promotes sales. This is a wishlist allows customers to save the goods they like and share their wishlist with their friends and family.

Admin dashboard

Your marketplace administrator needs a multifunctional dashboard to customize plenty of settings like shipping and payment methods, listings, filters, categories, and so on. Admin also gets messages from the contact forms.

Ratings and reviews

Customers widely rely on ratings and reviews while making purchases. Not every e-commerce website has them but marketplaces always do. In order to make sure reviews are honest, your marketplace will need features like IP address check and reviews acceptance only from registered users. Amazon has a Feedback Manager where sellers see feedback for 12 months and for the current day, and are able to reply to the reviews or ask buyers to remove incorrect feedback.

Shopping cart

Shopping cart is the place where buyers store their products before the final purchase. They need to be able to easily view and change the product details — like the number of goods — as well as delete some items. All the purchase information should be clearly stated in the shopping cart (shipping prices, fees or discounts, payment methods, etc.)

Shipping options

With the shipping feature, your marketplace customers can choose the best delivery option offered by the vendors. On Amazon, vendors can choose whether to ship it themselves or use Fulfillment by Amazon. Vendors can also manage the shipping details like shipping zones.

Easy checkout and payment options

Reduce the checkout abandonment by making it extremely easy to perform the needed steps. This included a few best practices as follows. Minimize the required fields, create clear and prominent CTAs, show payment security proof, and allow no-sign up payment. Of course, payment options need to be varied. The big mistake of many marketplaces is to use PayPal only. You need to consider specific region payment preferences instead.

Payment reconciliation

Another answer to the question of how to make a multi vendor ecommerce website is that it needs reconciliation reports. This helps sellers compare internal payment records with external ones such as bank records to be sure they match and there are no inconsistencies. Amazon recommends that sellers check them daily.

Notifications

Sellers receive a number of notifications that they can customize, and can switch on and off according to their preferences. Among them are notifications about orders, refunds, reports, account changes, tips from Amazon, and so on. This helps them always keep their fingers on the pulse.

Order reports

On the reports page, sellers should be able to view reports on their orders (fulfillment status, sales channel, item details, and more). On Amazon, they can view both FBA orders (Fulfillment By Amazon, or the services of storage, packaging, and shipping assistance) and orders fulfilled by themselves.

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

To build a website like Amazon, you can take their key features and modify them to meet your business needs. So although Amazon is a giant platform, your marketplace website development can be much cheaper.

To save money, stay within the essential scope of features and choose a web agency with a cost-effective approach that uses enterprise-level, scalable CMSs as a basis for websites and offers an affordable hourly rate.

Here is an approximate estimate to build a marketplace like Amazon based on the key essential features. However, you need to know that the implementation of every feature may differ from project to project:

Design from 50 hours
Development from 200 hours
QA from 50 hours

To sum up

These have been the basics of how to start a marketplace website. It’s clear that online sales, including ones in e-marketplaces, will keep gaining momentum because of increased demand related to the pandemic and post-pandemic times.

Our web development agency can build a multi vendor marketplace for you by making the development cost-effective. We work with Drupal and WordPress CMSs. So contact us if you want to create a website like Amazon or any other popular marketplace.