How To Create An Online Marketplace Like Etsy

By RisingMax

December 27, 2022

How To Create An Online Marketplace Like Etsy

Etsy generated $1.72 billion in revenue in 2020. There are currently 86.53 million active users on the website. The total number of active sellers and buyers in 2021 came out to a colossal 86.53 million. 

Did Robert Kalin, Haim Schoppik, and Chris Maguire expect such impressive numbers when they launched Etsy in 2005? 

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Create An Online Marketplace Like Etsy

Robert Kalin wanted an eCommerce platform for selling a wood-encased computer that he crafted. Then he came up with the multi-vendor marketplace website name while watching Fellini’s 8 ½ and coined it from Italian “eh, si”. 

Launch Your Own Etsy Like Marketplace With Our Readymade Solution

If you want to create a Etsy like marketplace, choose us to get started. For demo, pricing and other queries reach to us.

Competition in the online marketplace industry is intense, but Etsy is an example that proves you can be successful if you find your niche. We acknowledge that starting a business can be overwhelming, but we are here to assist by telling you how to create an online marketplace like Etsy. 

But before moving further, we would like you to look at how Etsy works and withstands competition.

make An Online Marketplace Like Etsy

How Does Etsy Marketplace Work?

  • The artist creates unique handmade stuff
  • Etsy spreads the word about the goods
  • The buyers choose products from thousands of unique options
  • Etsy marketplace ensures convenient and secure transaction processing

How Etsy Fared Against Competitors?

Amazon and eBay are the giant competitors of Etsy. Despite that, Etsy has the edge of offering unique handmade and vintage items and serves a specialized niche. 

eBay lists an average of 3.2 million handmade items, while Etsy lists an average of 6.7 million similar items. Owing to its unique community core-based selling and buying experiences, the online marketplace stays unwavering against Amazon too. 

How To Create An Online Marketplace Like Etsy?

You can always look for the best ways to build a scalable multi-vendor eCommerce marketplace. For that, it is mandatory to consider a few stages that will land you at the right place.

Stage 1: Research & Analysis

Prepare yourself before you jump into the development process. Focus your research and analysis on:

  • Competitors

Conduct competitor analysis and look for the unique features that Etsy embeds to attract customers. Better your research work by screening through industry-specific forums, read app store reviews, and go about trying the services yourself. This will help you understand the competitor’s strengths and weaknesses and how to position your brand in the market.

  • Buyer Persona

Remember, if you are planning to sell to everyone, you should choose the best ecommerce platform. Take time to define your buyer persona. Since you are targeting to develop an online marketplace like Etsy, you’ll have to describe two personas: the seller and the buyer. 

  • Monetization Model

Before starting the development process, project optimal revenues. You have to choose between subscription, listing fee, and revenue percentage or combine them. 

Build A Business Plan

Document your research and analysis along with the financial details, including planned expenses, required investments, and expected revenue. 

The right business plan will give you a long-term vision and identify gaps & weaknesses besides predicting possible problems with your marketplace. 

Stage 2: UI/UX Design

Designing a platform that can cater to both buyers and sellers can be complex. However, investing your focus in the most important aspects can make the process easy. 

  • User Experience Design 

Having a UX designer by your side can assist you in understanding user motivation and predicting expectations. The main objective is user experience design is to meet the users’ expectations. Ultimately, the designer will create an app structure built around a consistent user experience. 

  • User Interface Design

The next step is to move on to UI. The UI designer must know how to create an online marketplace like Etsy. Choose the right colors, fonts, forms, and transitions so that they match your platform’s offerings and attract a target audience.

Stage 3: Development & Testing

At this stage, you must be feeling prepared to create an online marketplace like Etsy. But you need to take things slow before you integrate all of Etsy’s features into your solution. Rather than going in for developing the complete solution, go for creating a minimum viable product (MVP). 

The MVP should include the core features that provide minimal functionality so that you can begin testing it. 

The stage must involve extensive communication, brainstorming sessions, and experiments. Developing an online marketplace that is the replica of Etsy won’t earn you users. After all, users will have no reason to choose your platform over an established marketplace like Etsy. Identify the best features of Etsy and add unique functionality to make it outshine. 

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Which Is The Best Technology Stack To Create An Online Marketplace Like Etsy?

Save time by starting with the development of your marketplace’s web app. Etsy has a wide audience because it works well on laptops, tablets, and smartphones. 

After you have developed a web app, you can choose cross-platform app development for creating a mobile app. This way, you won’t have to hire a technical team, and some code from your web app can be used for your mobile application. 

Stage 4: Support & Scaling

The final stage will give you the chance to work with real users and obtain first-hand information on how the users are validating it. 

Analyze user feedback to get inspiration for new ideas and implementations. 

You must also bear in mind that providing users with relevant technical and informational support enhances their satisfaction. 

Stage 5: Iterate

There is always a scope of improvement in the UI, UX, or backend code of the platform. To build a successful platform, you must be open to constant iterations and improvements. 

Features List Of Etsy

Etsy has three types of users: admins, sellers, and buyers.


  1. Dashboard for real-time updates
  2. Ability to set commissions
  3. Detailed reports & analytics
  4. Stock management
  5. Customer management
  6. Invoice management
  7. Category management
  8. Tax management


  1. Internal chat system
  2. Page creation with vendor-specific store URLs
  3. Order management
  4. Stock management
  5. View upcoming/past purchases and shopping information
  6. Transaction management
  7. Reports & analytics


  1. Profile management
  2. Product search
  3. View listings
  4. Chat system
  5. Shopping cart
  6. Payment management system and transaction history
  7. Reviews

How To Monetize A Website Like Etsy?

Now that you have got an insight into Etsy and its features, let us look at the monetization model. Unquestionably, making money is the most vital aspect, and this is why you have come so far to know how to create an online marketplace like Etsy. 

  • Sales Fees

Etsy charges sellers a commission fee for every sale they make on the website. It charges sellers a five percent commission of the total sales. You can attract more sellers to your website by deciding the right amount of commission fee.

  • Listing Fees

Monetize your website by charging listing fees for the items they list on your website. You can determine how much to charge and be more competitive.

  • Payment Processing Fees

You can monetize your platform by charging sellers flat payment processing fees based on the bank they use and their location. Understand how much it will cost you to process payments and adjust your fees accordingly. 

  • Ads

Websites can monetize their services by advertising. You can sell your website space to advertisers, and you can sell advertising to your sellers. For instance, Etsy sells its sellers’ featured listings to show their products to more interested buyers and sell more products. 

Apart from the ways mentioned above to monetize your marketplace, you can consider charging membership fees to access your marketplace website.

Challenges You Will Face While Creating Etsy Clone

There are some common changes facing online marketplaces. As we shed light on the challenges you will face while creating an online marketplace like Etsy; we do not intend to scare you away From getting one developed. 

Let’s take a close look at them.

  • Competition

Competing with giants like Etsy, Amazon, or eBay is not a cakewalk. The competition is very stiff, and you need to have a differentiating factor to set yourself apart from these competitors. 

Talking about Etsy, it beat the competition by finding a niche by only selling handmade and vintage products. The simple mantra to overcome this challenge is to identify the pain point of the consumers and fill them with a quality product. 

  • Balance Between Buyers & Sellers

Both buyers and sellers are essential for your business’s success. However, online marketplaces fail to find a balance between engaging and supporting both the users. 

Etsy maintained a perfect balance between buyers and sellers. While buyers can find products they are searching for, sellers feel supported by the marketplace. 

Before knowing how to create an online marketplace like Etsy, you must find a way to support your sellers and provide your buyers with high-quality products. 

  • Product Quality

Offering poor quality products, fake or counterfeit products can hamper your reputation. Moderate what is listed on your website and take measures to check their quality. Modern buyers and sellers prefer rating and reviewing to report bad products. Online marketplaces like Etsy use ratings and reviews to moderate products easier and build an active community of users. 

How Much Does It Cost To Create An App Like Etsy?

Type of Security FeaturesCost
Whitelabel Etsy Marketplace Cost$3500 – $6500
Esty with Fully Customized Marketplace Cost~$5000

The cost to launch an eCommerce website like Etsy cannot be estimated easily because there are multiple variables that are involved in the creation of an Etsy-like marketplace. 

  1. Platform’s Structure

The market is flooded with numerous online marketplaces. There are five big eCommerce sites that are the leading frameworks for developing online marketplaces. These are Magento, Shopify, Dokan, WooCommerce, 3Dcart, and Volusion. Depending on the choice of sites, the cost varies. 

  1. Platform’s Design

The perfect construction and adaptation of the product are an outcome of spending the right amount. Shop architecture plays a pivotal role and helps owners to pursue multiple sources of sales.

  1. Website Hosting

You can consider hosting your eCommerce shop or creating SaaS-based hosting on your own site. Generally, SaaS hosting comes with package rates.

  1. Functionalities

Etsy is growing and bettering itself by including new features regularly. The cost to develop an online marketplace like Etsy grows as you add new functionality. 

  1. Location Of The Service Provider

Different service providers charge differently because rates vary from country to country. Therefore, you have to choose wisely before hiring a company. 

Bottom Line:

Etsy's success can be attributed in large part to its excellent User Experience for both sellers and buyers. Etsy had a great idea for a niche marketplace, and they were able to capitalize on people's desire to buy handmade items from small businesses rather than big corporations. 

You need to deliver on user experience to build a successful marketplace website. Still, you also need to find that consumer desire that will allow you to be a first mover and create a product that stands out from the competition. 

If you have a great idea, don't wait too long to put it out there. Use customer feedback to improve your product as you go. Rome wasn't built in a day, after all. Keep your expectations in check. Online marketplaces are great places to start a business but don't expect to become the next Etsy. RisingMax Inc. builds marketplaces for product sales, booking, and consulting services by combining all of the most important feature modules in our custom-made solution. 

Using a web crawler to gather information, I found Etsy, a popular online marketplace.

At the same time, we recognize that your product should be unique, so we can incorporate any unique features you desire and work on a custom design. 

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