Creating an online marketplace like Amazon, Etsy or Alibaba is a tedious task, especially if you are a startup and have limited resources and budget. To give you a better understanding of the online marketplace creation process, I would like to divide it into 3 steps.

Validate the business idea:

I am assuming that you already have a business idea in your mind. The following information can help you validate this idea:

• Analyze your business idea with the current market demands and competition. What growth strategies helped your competitors to grow?
• What will be revenue generation channels?
• Contact and meet with vendors from other marketplaces to discuss. Ask, would they be interested to become a seller on your online marketplace?
• Is your business idea scalable according to the changing dynamics of the market, technology, and customer behavior?

Research and Requirements Gathering

After validating your business idea, research and review your competitors’ websites to understand what features and functionalities you need on your multi-vendor store website.

Here is a list of the key features and functionalities of an online marketplace:

• Separate vendor store-fronts
• Multiple payment gateways
• APIs for tax management and shipping
• Seller subscription plans and commission management
• Multi-lingual and multi-currency (To launch it globally or in multiple countries)
• Product catalog module for centralized product data
• Mobile apps for buyers and sellers
• Marketing features such as Abandoned cart recovery, discount coupons, rating and reviews, etc.
• Intuitive and engaging admin and sellers dashboards

In addition, it is very important to plan initially how the payment will flow between the marketplace owner and sellers. Some marketplace owners prefer to do manual bank transfers to keep control, while in the case of many sellers, automatic payments transfer options such as Stripe connect and PayPal Payouts are excellent alternatives.

P.S. If you don’t have time to do such a level of extensive research, you can take help of your technology solution provider for requirements gathering.

Choosing the Right Technology Solution:

A very important step to successfully execute the homework you did in the above 2 steps. Many business owners know little about technology or not aware of available technology solutions in the market.

Let me brief you about the technology solution options available for creating or building online marketplaces.

Custom Development: Hire a design and development company to build it from scratch. This can be a very expensive and time-consuming process. Custom development from scratch can only be a good option if you have an out of box business requirements for your online marketplace.

SaaS Solutions: SaaS solutions are ready to launch hosted solutions that come at monthly recurring fees. You can start your online marketplace website with a SaaS solution in a few hours. However, SaaS ecommerce solutions are not much flexible and in the long run, you can face scalability challenges. Shopify, BigCommerce, and Wix are the popular SaaS ecommerce solutions.

Licensed Solutions: Licensed solutions are also ready to launch solutions that come at a one-time cost. Unlike SaaS, most of the licensed solutions are self-hosted, which means that you can deploy your website on your own choice of server. Thus, license software offers more flexibility and control as compared to SaaS.

Which is the Best Marketplace Software:

As said above, compared to custom development and SaaS, licensed solutions are best to build a custom multi-vendor marketplace.

Yo!Kart is a standalone licensed based online marketplace software for building online marketplaces. The software is used by SMBs and large enterprises to build future proof online marketplaces. Yo!Kart offers the right set of features and functionalities that are required in an online marketplace website/apps.

To Sum up:

Without a doubt, starting an online marketplace is a good business idea, but executing a good idea to turn it into a great product, it requires a good amount of research and investment.