April 20, 2024

How To Create An Online Marketplace Like Etsy – An Comprehensive Guide

Online marketplaces are the most challenging as well as promising business ideas that have unbelievable scope and future. Many leading eCommerce giants have proved that the industry has high demands and millions of users are utilizing these platforms.

One such remarkable platforms like etsy that has gained the attention of a maximum number of users who show special interest in purchasing hand-made accessories, furniture and vintage clothing. This popularity has made a revolution in the minds of entrepreneurs and they have started showing interest in creating a website like Etsy.

Let us first have a deep look about what an online marketplace is and how to build an online marketplace like Etsy.

What Is An Online Marketplace?

An online marketplace is a digital platform where several companies will display their products or services through the platform and will reach their audience easily. Buyers will find their products or services by searching within the platform and will buy them online.

The checkout process is quite simple and will contain payment gateways integrated to it. Buyers can select their comfortable payment option and can get their products at their doorstep. 

Great Sounding Success Of Etsy Could Be So Beneficial!

The success gained by Etsy is transparent and can be clearly identified by all. This made entrepreneurs think about create marketplace like etsy. Let us analyze the key reasons behind the success of Etsy.

  • Value creation – Etsy has its own unique way of providing product offerings to its users. The entire marketplace is restricted to sell only handcrafted and vintage goods alone. This gives additional value to the marketplace and 
  • Sustainability – Etsy has sustained well in this market and there are many factors that have supported Etsy to stay long. 
  • Scalability – Etsy has a flexible marketplace model that allows business expansion and can hold numerous customer data that can be used anytime for customer behavior analysis.

How Etsy Marketplace Make Money?

Etsy has gained global attention through its renowned customer service and quality products. Every budding entrepreneur is inspired to build a website like Etsy mainly due to its revenue generation. Etsy has excellent revenue channels that make the platform a grand success. Let us analyze the major revenue sources of Etsy in detail.

Sale fee – sellers will be charged 5% as a commission on the purchase value of all sales that have been done through the platform. Sellers will find this to be comfortable as they need to pay only when a sale happens. The platform will be benefited from each and every sale that occurs with multiple sellers.

Listing fee – sellers will be charged 0.20% for listing one product on the website. This will promote the product and will make it visible to the target audience. The platform cannot assure about the conversion and for just listing the product, the platform will earn.

Processing fee – sellers will be charged a flat fee as a processing fee for each order that is placed through the platform. the flat fee will vary according to the location of the seller and it is not the same for all.

Advertisements – sellers can have two types of advertisement with Etsy. Promotional advertisement and Google shopping are the types. In promotional, sellers can attract buyers within Etsy by promoting the product within the platform. In Google shopping, sellers can attract buyers out of Etsy. 

If you plan to develop a marketplace like Etsy, then you should make sure you integrate all the above revenue channels in your platform that will be more fruitful for your business.

Business Model Canvas for Online Marketplace Like Etsy

Marketplaces like Etsy can succeed only if it has a perfect business model. Etsy has a reliable business model that benefits sellers, buyers and also the admin of the platform. Etsy connects sellers who are into selling handcrafts and vintage products.

All products are arranged under categories and this will facilitate buyers to easily find products of their choice. Buyers will pay through the platform and the admin will deduct the commission fee from the customer and the remaining amount will be settled to the concerned seller.

Features That You Should Integrate While Creating An App or Website like etsy

Let us split the features of Etsy for admin, sellers and buyers-wise as it will help you to build a marketplace like Etsy.

Admin features
Seller features
Buyers features
Exclusive dashboard to understand the business performance.Dedicated seller page to manage their store.Easy registration process
Simplified commission setting.Perfect order management.Dedicated mobile application to buy products.
Tax and invoice management.Excellent inventory control.Advanced product search
Reports and analytics.Easy transaction management.Add products to the wishlist.
Easy customer and seller managementInternal chat system and many more communication channels to
communicate with buyers.
Review and rating system.

How To Create An Online Marketplace Like Etsy For Online Business

By seeing the success that Etsy has made and the revenue it has earned so far, every aspiring entrepreneur will be curious to know how to create a platform like etsy. You can find step by step guidance to build a marketplace like Etsy..

  • Step 1: Research And Analysis – Before how to start a website like etsy for your own online store, you need to study the market and what is the real demand it has. Only through proper analysis and research can you set your marketplace. You need to know more about your competitors and should come with a unique marketing strategy to survive the competition.
  • Step 2: Platform Development – while planning to build a marketplace like Etsy you need to put more attention in choosing the right platform. Make sure your platform supports device responsive design and provides customization options along with scalability features.
  • Step 3: Development & Testing – development and testing process is a major task that seeks your involvement. You need to discuss with your developer and should see frequent demos about the performance of your marketplace platform and should confirm that the platform has gone under proper testing process.
  • Step 4: Support & Scale-up – build a proper customer supporting team that can be more supportive in sorting out customers’ issues. Customers will gain trust with your platform only if you listen to their issues else you may lose your reputation easily.
  • Step 5: Promote your brand – branding is very essential to run a marketplace like etsy. Your marketplace should be SEO-friendly only then you will be able to promote it online with less effort. 

Challenges You Will Face While Creating Etsy Clone

If you think about how to grow your Etsy-like business how to build a website like Etsy, you should be well aware of the challenges that are to be faced.

These challenges are inevitable and you need to have a pre-planned solution that will help you to overcome them at ease. Let us check challenges and gain a better understanding.

Fierce Competition

The competition for running an online marketplace like Etsy is unbelievably high. Already leading eCommerce giants like Amazon, Alibaba have reached their milestones and to overcome them is not an easy task for any beginner.

To confront this, you need to build loyalty among your customers and should have better communication with them and increase your customer base.

Selling Quality Products

Marketplaces like Etsy will have multiple sellers and you cannot assure quality on all products. Some sellers may try to sell poor-quality products which in turn will affect the reputation of the platform. You cannot keep an eye on each seller and their products. The best solution is to check on the user’s review and rating of the product. This will help you to identify which seller is selling low-quality products and you can easily remove them from your platform.

Retaining Sellers and Buyers

Acquiring sellers and buyers can be done easily through multiple promotions and branding. But retaining them is the most challenging task for any admin of the platform. when you check with Etsy, it has a unique way of intimating sellers about what customers really want and sellers will take it into consideration and will provide products accordingly. With this strategy, both sellers and buyers are satisfied and they will retain in the platform for a long period.

How Much Does It Cost to Develop a Marketplace Like Etsy

Cost is the major fact that comes to the mind of any entrepreneur who plans to learn how to build a website like etsy.  But it is difficult to have a fixed price for building a platform as the features may vary according to the business requirement. It depends on several factors like developers you select to build your platform, the time it needs to marketplace app development like etsy and what are all the features you want to have in it.

For a startup you can have basic features while for a corporate business you need to have advanced features. In this case, how much does it cost to build a website like etsy, the price varies along with these factors. If you need to have an affordable marketplace app platform then you can go for a ready-made solution that is quite cost-effective.

How to Grow your Etsy-like Business

Apart from knowing how to build a website like Etsy, you also need to know how to promote your Etsy-like business. Better promotion and marketing strategy will help you to increase your sales and revenue. Let us find out a few tips on building your website like Etsy.

Focus on video marketing – 67% of audiences pay more attention to video advertisements than text banners. For better reach, you need to create video content that will easily gain the attention of the audience.

Maximize organic traffic to your website – customers always prefer platforms that are listed on the top pages of the search engine. So, you need to build an SEO-friendly eCommerce platform that will get you a better page ranking and higher visibility.

Create better referral plans – make your customers be your brand ambassadors and through word of mouth you can get better sales. For this, you need to motivate your customers with better referral plans that will make them earn while they shop on your platform.

Promote your platform on social media – around 87% of your target audience are actively present on social media channels. You cannot ignore social media if you want better returns. Keep posting in all channels and let your audience reach your brand easily.

By properly following all the above promotional tips you can easily gain the attention of your audience and can get better returns.


Always do proper research to understand what your business model is and what exactly it requires. There are many marketplace platforms that are emerging markets on a day to day basis but the true fact is all of them are not finding it easy to survive in the market. So you need to take careful steps while building a marketplace like etsy and reach your target audience with your powerful platform.


1. How much will it cost to develop an online marketplace like Etsy?

Once you get a solution for how to build a marketplace like Etsy, the next question will be what would be the cost for the development. The costing cannot be merely estimated as several factors are involved in calculating the price.

  • The number of users accessing the platform.
  • The eCommerce platform is to be used to build the website.
  • The hosting server to host the application
  • Is a mobile application needed apart from the website?

You need to give your requirement that would be a reply for all the above-listed factors. Only then you can know the exact cost for the development of a website like Etsy.

2. What features should I focus on for an app like Etsy?

Few features are mandatory to develop a website like Etsy. These features should satisfy the admin, sellers, and buyers.

  • Customizable and scalable platform
  • Multilingual and multiple currency support
  • Multiple payment options
  • Review and rating system
  • Easy return and refund
  • Multiple revenue streams
  • Bulk product uploads
  • Real-time order tracking feature

3. What’s the development process like while building an online marketplace app?

If you plan to develop a marketplace like Etsy from scratch, then you need to hire a developer who can understand your requirement easily. The developer will develop the platform and will show you a demo. You can check the demo and can suggest addition and corrections if needed. The developer will revise the demo version and once the user is satisfied, the product will be ready for launching. The agile methodology will be followed in most cases.

If you find this more time consuming, then you can go for a readymade solution where the application will have all essential features and you can launch the platform instantly.


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