How to turn your e-commerce into a marketplace and get another income source (+ internationally successful cases)

Having only one income source is always risky.

For example, if your e-commerce’s sales happened to plummet, your competing brands would skyrocket and your market niche would weaken; it would be very bad for you.

That’s why the saying goes: “don’t put all your eggs in one basket”.

But what if instead of going through that you had thought about diversifying your income sources?

Some e-commerce owners, for example, decide to expand their catalogue and reach a larger audience. Others create online stores and manage them simultaneously.

A third option would be to turn your e-commerce into a marketplace.

In other words, you’d still sell your own products (if you want to), but you’d also welcome other sellers on your web.

Once you have it up and running, it’ll be a constant source of passive (or almost passive) income.

How does that sound?

Well, keep on reading because we’ll tell you how to take the leap towards this multi-selling platform in a simple way.

Here we go! 😉

👉 Why is it interesting to add a marketplace to your e-commerce?

In case you still don’t know what a marketplace is, let’s start with a definition.

A marketplace is a platform that connects sellers and buyers. Independent businesses publish their products on this platform in exchange for sales commissions. 

It’s similar to a mall.

The owner of the mall (that would be you) offers a physical space for other companies to locate their stores. He is not in charge of selling or serving customers; he simply attracts them and keeps them happy.

Something similar happens with these “online malls”: you don’t manage those stores’ shipping or stock control. You simply offer sellers a space where they can commercialize their products.

However, you are in charge of eCommerce marketing campaigns to make your platform visible and web maintenance, among others.

A clearer example of a marketplace is Amazon; we’ll talk about it (and other successful platforms) later on.

But first things first:

✅ What are the benefits of creating your own marketplace?

So we’ve been talking about the goal of diversifying your income sources, right?

Let’s explore this idea further:

• (Almost) passive income: sellers manage orders, prepare shipments and serve their customers. You, on the other hand, offer them a platform from which they can reach a larger amount of buyers without owning a store. In return, you get a commission for every sale, and you make sure the platform works well and gains visibility (so that’s why it’s not 100% a passive income).
• It’s a growing business model. The hardest thing is to get started. Once you have a fair amount of sellers and buyers, the system is self-sustaining. That is, the more product offers, the more clients. And the more clients, the more businesses will want to sell their products on your platform. From there, it’s all growth.

Moving past this, let’s get to what you’re here for; how to take the leap and start your own marketplace.

👉 How to turn your e-commerce into a marketplace (according to the platform you’re using)

It will always be easier to create a marketplace from an already working online store.

To begin with, if your e-commerce has some customer flow, is well positioned on Google, and it’s well-known, it’ll be easier to attract other businesses interested in selling on it.

Also, the one thing you’ll need in this case is to install a plug-in that will turn your online store into a marketplace.

It’s as simple as that —even if you’ll have to set it up.

There’s a broad offer, but we’ve selected some of the best-rated plug-ins for the main e-commerce platforms.

✅ 1. WooCommerce (WordPress)

On WooCommerce there are two outstanding plug-ins in terms of ratings and number of downloads:

• WC vendors: users of this plug-in highlight its user-friendliness and support. There’s a free version and a paid version. 
• Dokan: just like in the previous case, Dokan is one of the best-rated plug-ins because of its customer service and functionalities.

In order to help you choose, here’s this comparative chart where you can see the features each of these plug-ins includes.

✅ 2. PrestaShop

If your store is on PrestaShop, then a good option can be JA Marketplace.

It’s a highly-valued extension (it’s even been awarded multiple awards) that will allow you to easily manage technical aspects such as:

• The commissions you get for every sale.
• The creation of user accounts.
• The status of orders received by your sellers.
• Checking incoming messages from customers (essential if you have to mediate an argument between a seller and a customer, for instance).

Here’s a video that shows how to install and set up this module:

✅ 3. Shopify

For Shopify, we’ve gone with Multi Vendor marketplace.

This is an app that has very good opinions from users.

There’s no free version of it, but there’s a 15-day free trial. If you ultimately decide to buy it, the app offers 3 different plans from $10/month.

✅ 4. Magento

Last, there’s Magento.

Among all of the available modules for creating a marketplace on Magento, one of the most popular and best-rated ones is Multivendor marketplace.

It has both a free and a paid version. On this chart you can see the differences between both versions and decide which is best for you to get started.  We recommend the paid version because, since it’s more complete, it’ll allow you to grow way faster.

👉 4 cases of internationally successful marketplaces (and what you can learn from them)

You’ve already seen that starting your own marketplace is as easy as installing a plug-in.

Now comes the trickiest part: making it work.

Nothing better than taking a look at the most popular marketplaces globally to get to know the keys to success.

Let’s see them! 😉

✅ 1. Amazon

Without a doubt, when it comes to marketplaces, the first one that comes to mind is Amazon. But what does Amazon have that has made it propel that high?

This platform’s key to success has been placing the customer first and offering them the best possible user experience through:

• Its user-friendliness: fast and accessible browsing.
• A huge product catalogue: plus customized suggestions (Amazon’s choice) to help the customer choose.
• Top Reviewers: this feature motivates users to leave more than reviews. It helps customers in finding the best products by assessing other buyers’ opinions.
• Amazon Prime: it offers free shipping within 24 hours, which increases conversion.
• Good search experience: an internal AI-powered browser.

If you apply these strategies to your marketplace, you’ll attract a large number of clients, and other businesses will become interested in selling on your platform.

On our end, we can help you with the browser.

When you have such an extensive catalogue with very similar products —as it’s usually the case on marketplaces— using a powerful browser is essential.

With Doofinder you can help the user find the product they are looking for, product-related suggestions, and customized results thanks to the use of artificial intelligence, which will allow you to increase your sales (and those of your sellers) up to 20%.

Try Doofinder for 30 days and give your business an extra boost 😉

✅ 2. eBay

eBay was a pioneering marketplace. That’s precisely one of the reasons for its popularity.

Beyond that, eBay has some features that make it special:

• Auction-style listings: in addition to selling products at a fixed price, it also allows users to get a product by auction. This makes clients compete among them, making the sales price rise due to a scarcity trigger. In other words, users don’t want to miss out on your product and they place bids to get it, even if it’s at a higher price.
• Benefits for the collectors niche: a perfect auction option for collector’s items. So even if eBay was a general marketplace, it gained popularity within the collectors’ market.
• The boom of second-hand products: eBay quickly stood out as a space for finding second-hand products, way before it was trendy to own a section of used or restored products. 😉

In your case, think about the concrete niche you want to target (the logical thing is for it to be the same as your store’s) and the benefits you can offer those sellers.

✅ 3. Etsy

In 2020, Etsy reached 4.3 million sellers. With giants such as Amazon or eBay on the market, how did they manage to plow their way and achieve such success?

There are three factors:

• It targets a concrete niche: Etsy focuses on craftsmanship and hand-made products. This is how it has managed to attract a very specific audience (people who look for unique products and who prefer buying them from independent sellers).
• It offers their sellers fair conditions: as part of their brand values, Etsy offers sellers more favorable conditions than other marketplaces. That’s how they reach an audience that cares about small producers.
• It endorses sustainable growth: the concern for the environment is just one more pillar of this marketplace’s brand image, which has made many users bond with this platform.

In order to be 100% coherent (and attract the right audience) make sure the values of the businesses you take on your platform are aligned with yours (if you are against cheap labor, for instance, don’t take sellers whose products have been fabricated this way).

👉 Are you ready to start your marketplace?

As you can see, there’s a lot of work ahead of you.

Turning your e-commerce into a marketplace is the easiest part. You’ll then have to decide what niche you’ll be focusing on (so you can select businesses whose values are aligned with yours).

You’ll then have to attract sellers (offering favorable conditions) and buyers (for this, user experience and product variety are essential) to make your platform grow.

You already have the roadmap, so get on it! 😉