Create an Amazon Marketplace:
10 Tips for Creating an Online Marketplace like Amazon & eBay

The e-commerce industry is experiencing a true boom and seems to have become unstoppable. It appears as though nothing can halt its expansion. There is only one way to cope with this e-commerce avalanche: by jumping on board and getting as involved as possible, embracing new technologies and trends. Multi-vendor marketplaces like eBay and Amazon are demonstrating the latest trend. In fact, there is hardly any e-commerce shop that manages to survive without the help of Amazon or eBay.

The Essentials in Brief

Which Online Marketplace Would You Like to Create?

How Do You Create an Online Marketplace like Amazon?

When creating an online marketplace like Amazon, you must first prepare a concept and a specification document containing all the required functionalities. Afterwards, the appropriate technical infrastructure for development is defined – fundamentally, you choose between a simple solution using CMS systems or a more complex solution using a programming language like PHP.

1. How Did They Achieve Such Tremendous Success?

The answer lies simply in their business model. A closer look reveals that it is primarily due to the large number of providers, which results in an extensive range of products from all areas. For example, Amazon, eBay, Etsy, AliExpress, and Alibaba: these online marketplaces offer the widest range of products, such as books, electronic devices, fashion, stationery, kitchen appliances, and much more.

Marketplaces like Amazon, eBay, Etsy, AliExpress, and Alibaba have a very extensive product range.

With such an enormous range, it is easy to win over customers, as they feel they can buy anything under the sun. Without this fantastic variety of products, online marketplaces would not be a hit. It is easy to find a specific product, get information about it, and then purchase it with a single click to have it delivered right to your door. That is why customers find shopping on an online marketplace so advantageous: it is fast, simple, and convenient.

2. Build Your Own Amazon

Creating an online marketplace is far more complicated than designing a simple online shop. The multi-vendor platform offers customers a far more extensive range of features and functionalities.

For example:

• Control at every stage: confirmation/cancellation of purchase, orders, technical support, user information
• The user interface to make offers, update payment information, collect and manage personal information, services for buying/selling, view transaction history, and much more
• Reputation rating of sellers through customer feedback and sales volume
• Establishment and management of commission fees.
• Various payment systems.
• The proven system of user-friendliness

Wiki.Rademade.com contains all the necessary specifications for the multi-vendor platform. This is the basic version of a marketplace, an MVP that is ready to use. However, you need some technical knowledge before you can get started. A fundamental understanding of WordPress is sufficient. With the help of open source, you can customize the site as needed and equip it with the desired plugins.

Step 1: Conduct an Extensive Market Analysis

A market analysis is aimed at studying the target group and is meant to reflect their purchasing behavior as well as various demographics and similar factors. If you want to launch an online marketplace like Amazon or eBay, you must come up with a concept that is at least as impressive as that of the market leaders in order to impress and attract customers. For instance, Magento has assembled over 250,000 online shops on its marketplace. Sellers come because they find it easier to sell on a well-frequented platform than to fend for themselves.

Step 2: Find a Niche

If you do not focus on discovering a niche market, you will get lost like a fool in the multitude of various providers and will ultimately receive no attention. However, if you can secure an important niche with a specific demand, you need worry less about competition – or may even hold a unique position. Being the only online marketplace for a product is a stable foundation for any business that expands on its own and can always stand up against Amazon or eBay.

Step 3: Choose the Right Technology

The range of available technology for both the backend and the frontend is extensive, and even an experienced web developer can get lost in it. In the end, it always comes down to the finished CMS with its range of plugins for the peer-to-peer marketplace. Earlier, the importance of target audiences and niches was mentioned. For the initial attempt, it is crucial to try out many iterations and various options. Only in this way can the operator learn from experience which setup appeals most to visitors of the online marketplace. The price for a multi-vendor marketplace like Amazon and eBay, with a standard template and a distinctive design, costs between 2,500 and 5,000 euros. Should the operator choose a unique design, the amount increases by 1,000 to 2,000 euros.

Step 4: Design

It is a misconception that design is the first thing a user notices about an online marketplace. In fact, design serves much more to either build trust or not. Furthermore, it indicates whether the execution was professional or not. Thus, a design that has already been used countless times as a good and proven choice on eBay or by Trump might still not be suitable for an online marketplace website.

The priority in the design of the online marketplace is user-friendliness. 

Step 5: Choose the Right Features

To test acceptance, the operator initially uses a beta version of the online marketplace. For this, the simplest form is chosen in order to determine which properties, features, and functions should definitely be integrated. We recommend a catalog, registration, as well as sections for products, statistics, payment options, and a search engine. The administrator needs his own system to maintain control over the online marketplace.

Step 6: Pricing

There are several schemes for fee assessment in multi-vendor online marketplaces. These can be used individually or in any combination.

2.1 Item-based Fee

The most popular scheme is that when a seller sells something on the online marketplace, they must share the profit. Typically, the rate is between 3 and 20 percent. In the beginning, the operator should not set the fee too high, as a high fee can be off-putting. A certain degree of leniency can become a real advantage in the long term.

2.2 Payment for Clicks

With around 25,000 visitors per month, who on average view 5.3 pages, the online marketplace receives 132,500 page views. Many companies aim to increase these numbers and direct the audience’s interest toward certain products. Therefore, small rewards for viewing pages or specific products can achieve the desired effect.

2.3 Freemium and Memberships

The target group consists of sellers outside of Amazon or eBay who want to offer 10 or up to 1500 products. Therefore, a fee that takes into account the number of products offered is also suitable. Those who offer many products can pay a lower fee, while a seller with few products at high prices may pay a higher fee rate. Alternatively, the operator could structure the fee entirely based on the number of products offered – for example, up to 250 products for 30 euros per month, up to 1000 products for 80 euros per month, or something along those lines.

3. Marketing

Marketing in the era of Amazon and eBay is a complex matter, and the best results are achieved through a combination of different strategies. One of the most important is SEO:

• Email marketing campaign
• Advertising on AdWords or Facebook
• Placing ads with a third party

Step 7: Domain Name

When selecting a domain name for the online marketplace, this quickly proves to be a sensitive subject, because the domain name must attract customers and evoke expectations. Therefore, a short, as memorable as possible name is ideal. Additionally, it should be completely aligned with the project.

Conclusion

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