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How to Create a Marketplace Website: From Idea to Development

Marketplace Website

A marketplace website is an online platform that allows different sellers to offer their products or services. This kind of platform actually links sellers and buyers.

We can call marketplaces the next stage of development of large e-commerce projects as many leading online stores often switch to an operating model that aggregates offers from other sellers on their platform, aiming at expanding the product range and increasing their market reach. Platforms like eBay, AliExpress, Etsy, and others are among the world-famous websites of this type.

We can subdivide them: by the type of participants (B2B, B2C, and C2C), products, services, or monetization. However, any marketplace has its main purpose — to simplify the interaction between service/product providers and their consumers, and to help them find each other.

Let’s look at the main points to consider when developing this type of project, starting with searching for the idea and finishing with initiating development.

How to Find Ideas for an Online Marketplace (Research Comes First)

Everything starts with an idea. So, before you start planning future functionality, choosing a technology stack and finding the optimal business model, you will have to analyze the potential of the chosen niche.

In a broad sense, all potential niches may already be occupied, but some narrower segments are still very promising. For example, it is clear that the plan of creating a marketplace to sell digital equipment and electronics will not currently work. On the other hand, a niche photography products aggregator marketplace is quite a viable idea.

Here are several recommendations that will help you arrive at a good idea for a marketplace:

  • Analyze niches, moving from general segments to narrower ones.
  • Make sure you estimate the market volume, especially if you want to target a specific country or region.
  • Make sure you solve a real problem, not a fictional one, and people are ready to pay for the products/services offered.
  • Confirm your idea is viable by interviewing representatives from the the target audience and ordering a search demand analysis from marketing specialists.
  • Analyze competitors and make sure you can offer more value to your target audience than other niche players.

Lastly, remember one more interesting rule:

Not every successful startup starts with a brilliant idea. To be successful, it is sometimes enough to adapt an existing idea to the needs of a specific market.

Find the Right Business Model

For visitors, a marketplace is just a showcase displaying products, but, actually, a marketplace is a platform with elaborate business logic and processes. Moreover, you have to comprehend from the very beginning that such a project should generate profit. To achieve this, you will need to choose an elaborate business model with particular care.

How marketplace work
There are several proven basic monetization options to use:

  1. Commission from operations. This is one of the most popular business models. Users can take advantage of it as they do not pay any fees to the marketplace until they start getting real customers and profits. The website receives benefits from such cooperation as well since it charges a percentage of the total amount of the money passing through it. Examples:,
  2. Monthly subscription. Users pay for a certain period when they use a trading platform. Its cost, customer engagement and retention issues are the weak points of this business model.
  3. Freemium. Sellers on the marketplace pay for additional features, such as a private message function or to place an additional range of products (extended list of services).
  4. Ad promotion. Sellers use the website for free and only pay to make their ads or product pages more visible. For example, sellers can pay to get their products on the main page or at the top of the main list.

Some marketplaces combine several business models at once while searching for the most advantageous combination of monetization options.

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Top Features to Include in a Marketplace Website Development

You have to make the decision to implement a particular function based on how a particular capability can help your target audience solve their problems. Here are the main features relevant to a marketplace platform:

  • Authorization and registration. This usually means a standard authorization procedure, using email and password, which can be expanded to authorization via social networks, or two-factor authorization via SMS or other sources.
  • Profiles (seller and buyer). Sellers will have the ability to create a company page and add or edit product/service pages.
  • Administration module. View and manage all data in the system, view transactions, resolve disputes, and get analytics and statistics.
  • Internal search. Search by fields, and filter and sort out data.
  • Product card. A product or service page with fields to fill out data.
  • Recommended products. Based on user activity and purchases, similar products/services are shown to customers.
  • Notifications. Inform users about important actions (orders and their processing, comments, etc.).
  • Shopping cart. Add and manage orders.
  • Making payments. Link bank cards and integrate payment systems, view and manage transactions, payment history, or cancel payments.
  • Feedback system. It also includes the ability to rate products.
  • Favorites (wish list). Provide users with the ability  to save their favorite products to bookmarks to buy them later.

Marketplace Dashboard

We have listed the main functions, but this list can be expanded, depending on the type of project and the niche in which the marketplace platform operates.

Choose the technology stack (or a reliable development partner)

This is a broad topic, so we dedicated a separate blog article to it, and we recommend you read it. Create such a website based on “boxed” solutions or order individual development.

Wanting to save money, customers often choose boxed solutions at the initial development stages. This is quite logical if you do not have enough money or time, or you just want to test an idea.

However, boxed solutions have limited flexibility, and customizing a boxed version is sometimes more expensive and takes much longer than developing a product with similar functions from scratch.

That is why we recommend you simply find an experienced team of developers who will select the best solution and technology/tool stack for you and take on all the complex technical issues.

Build a Marketplace Website MVP

A startup in this niche can turn out to be an expensive project that will take a long time. Therefore, it is better to start with an MVP. This option will provide you with the opportunity to test your product with minimal functionality and financial investment in real market conditions.

When developing a marketplace, the main advice is to avoid trying to implement all the functions in the first product version. If you try to do everything at once, you will face several problems:

  • It will be more difficult for you to bring the whole idea to the development team, and the technical specifications manual may become huge with dozens or even hundreds of pages.
  • Project development will be a long process, and that creates risks of getting a low-quality product as a result.
  • At some point, you may run out of budget, and you will have to halt the project.
  • Finally, while implementing the project, you will have additional demands for it, which will be entered into the technical specifications, making it larger and larger. And, in the end, no one will remember which version is the final one.

MVP model example

In general, if you do not want your project development to take too long, be too expensive, and cause too much pain, split the implementation into several versions, gain customers, and track their reaction to new features implemented on the website.


When creating an online marketplace, it is very important to choose a niche that has no such services so far. Then you have to choose a business model and a list of planned capabilities.

After that, you have to start by choosing a reliable technical contractor who will not just develop the website, but become a fully fledged partner available for you at all stages from consulting to launching the project. In any case, it is better to start with an MVP so as not to slow down the development and to test the idea in real market conditions.

If you make sure your idea is promising and people are willing to pay for it, you can focus on increasing your audience and further project development.

Are you looking for a reliable technology partner? Write to us, and we will help you develop a really high-quality product!

Lvivity Team

Flexibility, efficiency, and individual approach to each customer are the basic principles we are guided by in our work.

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