The ultimate guide to building multi vendor marketplace in Magento 2 successfully

Ecommerce marketplaces like eBay, Alibaba, and Amazon have consistently demonstrated a growing trend. It’s only logical that with such a high level of popularity, many people and businesses are trying to figure out how to develop a multi vendor marketplace like eBay by growing similar eCommerce platforms in a number of niches.

If you don’t know how to build a multi vendor marketplace site in Magento 2, then you should begin by reading this article. We did our best to provide you with as much practical advice and information as possible to assist you in creating and developing a multi vendor marketplace similar to eBay, Amazon, or even better.

What you need to know about multi vendor marketplace


We’ll explain what a multi vendor marketplace is for those who haven’t heard of it yet. The great majority of internet retailers follow a straightforward and easy-to-understand principle. The merchants set up their single-seller platform on which to offer their wares. At the same time, the business owner, either alone or with a team of specialists, is in charge of:

  • Ensuring that product supplies are available
  • Within the platform, you can manage your website’s SEO, as well as your content and products. You can also handle your orders.
  • Optimization of a website
  • Advertising and marketing
  • Customer retention and acquiring new customers, for example.

The merchant obtains the whole value of the sold products, minus payment processing and operational charges, in this situation.

What are the differences between multi vendor marketplaces and normal online stores?

A multi vendor marketplace differs from a single-seller eCommerce business in that its primary purpose is to build a multi-functional eCommerce platform where various vendors can sell their wares. Unlike traditional eCommerce sites, a multi vendor marketplace does not require the proprietor to sell anything. Instead, the marketplace proprietor is responsible for guaranteeing the smooth operation of the website, advertising the platform, as well as offering security for both sellers and vendors. 

Unlike simple eCommerce stores, which only have two entities: seller and customer, multi vendor marketplaces have three: vendor, customer, and administrator (owner). We’ll also go over each of these entities’ key features in further depth. Let’s look at the primary benefits of establishing a multi vendor marketplace.

Why you should build a multi vendor marketplace in 2022

Every second, the eCommerce world evolves and transforms into new and complex forms. If you’re still on the fence, Magesolution is here to walk you through the changes and show you all of the benefits you’ll reap once you’ve built a multi vendor marketplace in 2022.

Captivate more customers

You can invite a variety of merchants and dealers to join your marketplace and sell their items. As a result of the diversity of distributors, your multi vendor marketplace can offer a greater selection of products. This will allow you to reach a larger audience with your marketplace. Because markets receive more traffic than typical e-commerce websites, you’ll have an amazing client database soon after opening a multi vendor marketplace. You can also use the obtained customer data to develop a new marketing plan or advertising campaign, for example.

Possibility of transforming your business into a community

A multi vendor marketplace brings together offerings from a variety of suppliers and service providers, which is one of its most important qualities. Customers are more likely to use a platform with a wide selection of possibilities because they may pick and choose their desired things without being limited to a single vendor. They are also more inclined to return to your market because of the convenience. As a result, your marketplace has the potential to become a community — an online platform where customers and suppliers may promote their goods and services and engage with one another. As a result, for your purposes, it means a higher volume of visitors who may be interested in purchasing advertising space from you.

Simplier promotion

Because vendors are just as eager in promoting their products as you are, there’s a good chance they’ll take on more marketing responsibilities. It is in their best interests for them to optimize product cards, add high-quality photographs and product descriptions, and do everything else that single-vendor e-commerce site owners do to attract new customers and maintain existing ones. Furthermore, creating a niche marketplace will make it much easier to target the proper audience, resulting in more traffic, higher conversions, and, as a result, a larger income for you.

Why should you create a marketplace with Magento 2?


When seeking to advise on the best platform to use for creating a marketplace, you will almost certainly be presented with at least five distinct CMSs to examine. Without a doubt, each CMS has advantages and disadvantages, such as complexity, pricing, scalability, and so on. To make the best decision, merchants should have a comprehensive grasp of their business needs, as well as accessible development timetables and, of course, a budget estimate.

So, what makes Magento 2 such an excellent platform for creating a multi vendor marketplace? To address this question, we looked at all of the platform’s features. Although the platform has a number of benefits that we’ve already discussed in other posts, you can learn more about them by following the lesson provided above. We will focus on the ones that are critical for marketplaces in this essay.

High execution

Any internet resource site’s speed is significant, but it’s especially important for online retailers and marketplaces. Any time spent processing user requests can reduce the e-commerce website’s ability to convert visitors into buyers. High-end caching techniques like Varnish, as well as other database optimization techniques, are included in the Magento platform to assure error-free and quick results.

More than 50 payment gateways available

Magento’s multi vendor marketplace is open source, and it enables a huge variety of payment systems and gateways that provide merchant services all over the world. A payment gateway, unlike some payment systems that move control to another site to complete the transaction, allows you to take credit card payments directly at your store. If the list of payment gateways offered does not meet your needs, you may still use a Magento payment provider gateway to integrate your Magento marketplace with additional payment providers.

A huge source of extensions and modules

At the moment, Magento has the most extension options. Almost any extension to increase the functionality of your marketplace may be found on Magento Marketplace. Before being added to the marketplace, all extensions are extensively tested. Marketing, customer service, accounting, payments, analytics, sales, website optimization, and shipping are among the categories where extensions are organized, making it simple to find what you’re looking for.

Easy to integrate

It’s all about integrations these days, and Magento is a partner with hundreds of Magento 2 marketplace software vendors. The goal of their collaboration is to make integrations as simple as feasible. There are numerous categories, beginning with CRM, email, and migration tools, and continuing with social media marketing tools, back office, and shipping. Salesforce, Zendesk, MailChimp, PayPal, and Campaign Monitors are the most popular solutions.

Large support community

Magento currently employs over 150,000 developers that work tirelessly to improve the platform daily. And, according to CreativeMinds, Magento is utilized by over 250,000 businesses, so you’ll never be alone if you have problems with the platform. Magento also includes a dedicated Q&A page where sellers can seek assistance. Because the community is so active, you can rest assured that your every inquiry will be answered.

We could list a half-dozen more platform benefits, but let’s focus on the most important marketplace features that can be readily deployed thanks to the platform’s flexibility and scalability.

Must-have features for the Magento 2 multi vendor marketplace


Magento currently employs over 150,000 developers that work tirelessly to improve the platform daily. And, according to CreativeMinds, Magento is utilized by over 250,000 businesses, so you’ll never be alone if you have problems with the platform. Magento also includes a dedicated Q&A page where sellers can seek assistance. Because the community is so active, you can rest assured that your every inquiry will be answered.

We could list a half-dozen more platform benefits, but let’s focus on the most important marketplace features that can be readily deployed thanks to the platform’s flexibility and scalability.

Vendor features

Vendors, of course, are the first and most important part of any marketplace. No vendors selling on your platform – no customers buying from your platform. To attract vendors to sell on your platform, you should provide suitable and attractive conditions for using your services. The comfort and satisfaction of the seller will depend on the set of features available within the marketplace and the ease of its usage.

1. Quick onboarding

This is the first time we’ve tried selling to prospects. Because entrepreneurs are usually on the go, you should make vendor onboarding as simple as possible. It’s best if it’s as little as possible.

2. Easy product management

The faster and more products a seller can upload and sell, the easier it is to add and change products on your marketplace. Your platform will most likely be one of the numerous marketplaces where vendors can offer their wares. Merchants frequently sell across multiple platforms at the same time (brand e-commerce stores, Amazon, Etsy, eBay, or other marketplaces). As a result, if you provide technology that allows for speedy product import from other platforms, merchants will be quite grateful.

3. Suitable order processing

New order/message notifications, the option to print packing slips, and delivery tracking are all necessary features. Of course, how the purchase is made, the presence or absence of a single third-party delivery service, and other considerations all play a part in this scenario. Regardless of these factors, the order placement procedure and transaction completion should be simple and rapid for both the vendor and the buyer.

4. Instinctive dashboard design

Sellers should have access to statistics that display the most important information about their business. As a result, creating an informative and simple-to-use dashboard for sellers to track traffic, sales, conversions, invoicing, and other metrics is critical.

5. Listing promotion feature

On the platform, competition between different sellers is a must-have. As a result, each of them should be able to stand out from the crowd and market their items in a variety of methods, such as through discount campaigns, listing promotions, coupon code distribution, and so on.

6.  Buyer and seller chat

The existence of Magento marketplace buyer seller chat improves both parties’ experience greatly (vendors and customers). The buyer can immediately engage the vendor via chat to explain any problems and receive a quick response from the seller, who is keen on resolving any issues.

Customer features

Customers like features that make the buyer’s journey easier and provide clear contact information. This type of feature isn’t new, and we all know how crucial it is to have a clear search on the catalog pages. Advanced search enhances the user experience by allowing them to find the right products more quickly. Filters, in turn, aid in the sorting of all appropriate products by price, popularity, rating, or seller.

1. Smooth checkout

The finest choice you can give your clients is a one-step checkout. Everyone appreciates a quick and easy checkout process. The good news is that with a Magento 2 multi vendor marketplace, there are a variety of options to create a user-friendly one-step checkout.

2. Dependable order processing and tracking

This procedure should be totally clear, and the buyer’s trust in the vendor should be unwavering. If merchants accept orders they are unable to fulfill or customers are unable to follow the progress of their orders, they will be pushed away and unlikely to return to your marketplace.

3. Buyer-seller chat

As previously said, the buyer-seller conversation is critical. The ability to communicate directly with the seller multiple times enhances client retention. Customers are significantly more inclined to buy from places where they can speak directly with the seller and get answers to their questions.

4. Customer login

Customers, like sellers, should be able to set up accounts fast. They should be able to log in to their personal Magento marketplace account with just one click after the initial permission. Data security, on the other hand, should not be overlooked, because a buyer’s account is where all of their personal information is saved.

5. Buyer-friendly design

That is all there is to it. There isn’t anything else to talk about. The significance of website design is discussed everywhere. The website’s structure must be simple to comprehend and navigate; otherwise, your visitors will waste time trying to figure out how things function.

6. Vendor reviews and rating function

The opportunity to provide feedback on the seller or the quality of products purchased from the seller is the most important tool for establishing and maintaining trust, as well as determining the vendor’s reliability. Furthermore, vendors that receive less-than-perfect or unfavorable feedback are encouraged to improve the quality of their items and services.

Administrator features

For the marketplace administrator, a simple and easy-to-use interface that allows them to manage many vendors, a statistics dashboard, and a settings manager would suffice.

1. Marketplace operations and management tools

This item contains platform notifications, tools for setting up and controlling the catalog, and tools for tracking general statistics and monitoring other important website operations. The marketplace administrator’s capacity to control reviews, new users, and product publications is just as crucial.

2. SEO management tools

Website administrators and vendors should be able to use SEO tactics to promote the sellers’ products and the platform as a whole in order to acquire more visibility.

3. Multilingual and multi-currency support

If the marketplace is intended for a global audience, it must be available in numerous languages and accept payments in multiple currencies.

4. A lot of payment options available

Every day, the number of payment gateways increases. It is not required, however, to connect your marketplace to all of them. To begin, simply choose the most popular ones while keeping in mind the location of your potential clients, and research the most widely utilized payment gateways in that region.

5. Prominent marketplace features

In addition to the above features, which are an essential aspect of any marketplace, other non-essential features might give your site an edge over competitors. So these capabilities are nice to have, and implementing them makes sense if you want to integrate your platform as quickly as possible and if your budget allows it to:

  • Customized vendor’s design.
  • All payment gateways.
  • Let app for mobile devices that can stand alone.
  • Integrate with third-party delivery suppliers. 
  • Let vendors have access to several users.

This list may go on forever. The Magento 2 marketplace’s capabilities are only limited by your ideas and the knowledge of the specialists who will work on platform improvement.

How to create an online marketplace on Magento 2 step-by-step


Now that you’ve discovered all of the advantages of using the Magento 2 platform to develop your marketplace, it’s time to go deeper into the process of launching a multi vendor marketplace.

1. Find a niche for your marketplace

Today, creating a multi vendor marketplace is a difficult undertaking. It is exceedingly tough to compete with market behemoths such as Amazon and eBay, which have long earned the trust of millions of individuals all over the world. You must consider your strategy and unique value proposition for potential clients and vendors as a start. In the face of ever-increasing competition, your proposition should appear increasingly profitable, and you should be able to attract early adopters as soon as the platform goes online.

The first consideration is to select an e-commerce niche. A good strategy would be to focus on a single small niche and a limited set of products and services. You can gradually increase the number of products available by encouraging new merchants to collaborate and reaching out to a new audience.

Furthermore, adopting a single business model can help you focus your target demographic and sell your platform more effectively on the web.

2. Opt for a monetization strategy

Choosing a monetization plan is one of the most important variables in deciding a startup’s future success. The business fails if the project does not generate revenue, does not scale properly, and is unstable in the long run.

So, for the marketplace, there are a few fundamental monetization options to pick from.

Commission fee

Setting a commission for each transaction is one of the most common ways to monetize a marketplace. A commission might be charged to the vendor, the buyer, or both parties in this way.

Marketplace merchants typically choose to work in this environment because they are not paid a fee until they generate their first revenue through the platform. Marketplace owners are also willing to implement this model because it benefits all parties and generates revenue from the start of the marketplace’s operation. Airbnb, eBay, Uber, and other well-known marketplaces all use a commission fee monetization method.

However, in some cases, such a monetization strategy may not be appropriate, and instead of luring clients, it may drive both customers and sellers away. If any of the following conditions exist, the commission fee-based plan should not be implemented:

  • The site sells high-priced items such as cars and real estate.
  • There are numerous identical offers on the market that do not need payment of a commission, making it easier for your potential customers to go to your competition and close a purchase there.
  • Setting up a billing system is complicated. For example, a customer may book a hotel room on the platform yet pay in cash when they arrive. In this instance, automating the process of calculating adequate commissions will be difficult.
  • The marketplace’s topic does not allow for direct payments. This includes job search and dating websites, as well as resources where people trade things and provide a variety of free services.

Listing fee

A listing fee monetization approach is used by marketplaces that aggregate a large number of listings. This method is quite similar to paid advertising. When the vendor is ready to pay for access to a large audience and the platform can guarantee adequate coverage, this approach works well.

In the Magento B2B marketplace, the listing fee method can be successful. This is the path taken by Mascus, a well-known marketplace for the sale of construction, agricultural, and other specialized equipment. Because sales volumes are low, merchants are not interested in long-term subscriptions. Participants are usually only willing to sell a few pieces of equipment. As a result, pricing for each advertisement is more appealing to them.

The biggest problem with this monetization technique is that the listing charge does not guarantee a sale, hence the price for such a service shouldn’t be excessive. To earn a consistent income, you’ll need to attract a big number of sellers who will post new product listings on a regular basis. To accomplish this, make sure your marketplace offers a significant amount of vendor incentives.


The premise of this method is that the consumer can use the marketplace’s basic capabilities for free and only pay for the advanced services if they are required. It varies from the trial version, which allows consumers to access the content for a limited time. Freemium gives you unrestricted access to the site’s core features. Paid services are a type of reserve that a client may request for added convenience or protection.

The freemium method has the advantage of making it much easier to draw an audience to a marketplace that offers its services for free. Furthermore, if users can analyze the capabilities of the basic offer first, they are more willing to pay for extra services.

However, you must make paid services helpful in order to persuade clients to use them. The approach will not work efficiently if just 1% of people are interested in a premium offer and the rest use the free version. Because creating a truly worthwhile product is difficult, marketplaces frequently utilize freemium as a supplement to other monetization strategies.


This method is employed as a stand-alone strategy as well as in conjunction with others (the second case is more frequent). For showing adverts with items or services on the homepage, at the top of search results, inside blocks, and elsewhere, marketplaces charge a fee. To see how the listing marketing can be successfully implemented, go to Etsy or other major multi vendor marketplaces.

This is a good solution for marketplaces with a large number of sellers and customers. Startups should postpone the implementation of their strategy or develop a similar strategy in the form of a favorable offer.

Membership or subscription fee

One of the most profitable methods to monetize a marketplace is through membership. The global exchange economy (shared consumption economics) is supported by a diverse range of enterprises that earn from membership fees.

According to Gartner, all startups in the software sector, as well as around 80% of current enterprises, will use a subscription-based monetization approach.

Charging vendors regularly is a terrific method to make money while also supporting the growth of your marketplace. The first subscription rule is to make sure that sellers’ revenue exceeds the monthly subscription prices charged by your site.

They’ll be willing to spend $19.99 per month for a subscription if your platform allows them to make $199.99 per month in net profit.

On the other hand, from a technical standpoint, the subscription is more complex to implement. You’ll need a payment gateway that works like Stripe and accepts subscription payments. However, in the early phases of operation, you can manually issue payment invoices monthly, but as more vendors sign up, this strategy becomes less economical.

The difficulty of implementing a subscription-based strategy is offset by the benefits it provides. Combine this strategy with the implementation of many vendor groups and scalable levels of access to platform capabilities, and you’ll have a reliable stream of regular cash.


Unfortunately, no uniform monetization method works for all marketplaces. Although the commission fee method is the most profitable and scalable, it is not always successful. At the same time, the freemium model allows you to quickly acquire a large audience, which is critical in the early stages but does not guarantee significant revenue.

A more sensible approach is to use a single strategy as a foundation and then integrate it with different revenue methods as the platform grows. As a result, you may gradually increase your income model until you find a mix that works for your platform.

Winding up

We have discussed how to set up a multi vendor marketplace website in Magento 2. Creating an online marketplace offers an opportunity to improve, if not completely transform, an existing business strategy. Consider the marketplace as a tool to achieve sustainable and profitable development, differentiate your brand, improve your customer experience, and bring your eCommerce marketplace to new heights, whether you’ve started to create your marketplace or are seeking to grasp the worth of doing so.

Building a multi vendor marketplace web might be difficult, but the work is well worth it. The process becomes smoother and easier with our Magento multi vendor solutions. It is not an exaggeration to say that now is the best time for you to seize the opportunity and incorporate this profitable eCommerce model into your company. Visit our website to understand more about us and don’t forget to send us an email if you’ve made up your mind or are still undecided.