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How to Create an E-commerce Marketplace?

Creating a competitive E-commerce application is a super-attractive investment for many commercial businesses and startups today. The rapid growth of E-commerce during the Covid-19 pandemic forced businesses to go digital and develop custom web stores or mobile apps and it shows no signs of slowing down. In 2021, the eCommerce retail market comprised $4.9 tln worldwide and it’s expected to grow by 50% by 2025, reaching $7.4 tln.

For those businesses that consider raising substantial revenues with E-commerce, one of the most viable solutions is to build an E-commerce marketplace. Though to start a successful marketplace from scratch can be a challenging endeavor. In this article, we’ve gathered everything you need to know about how to build a popular and robust marketplace website.

What is an E-commerce Marketplace?

An E-commerce marketplace stands for an online platform that connects sellers with their buyers directly. It means that a marketplace isn’t devoted to one particular brand or a product but instead gathers multiple brands in one place, providing customers with quick access to a variety of products. There are many examples of successful marketplaces, including Amazon, eBay, Allegro, Walmart, Alibaba, Flipkart, and many others.

Apart from working as a brand hub, an E-commerce marketplace also allows customers to compare products by a wide range of categories. Meanwhile, sellers use these platforms as a competitive marketing advantage that helps them reach wider audiences and advertise their products with minimum time and effort.

There are two main types of marketplaces customers can find online:

  • vertical marketplaces that focus on particular kind of products, gathering from various sources, e.g. only construction-related or jewelry-related products; by offering items from a specific niche, marketplaces allow customers to compare them in-depth and choose the best option;
  • horizontal marketplaces offer diverse products, carefully divided into many categories from clothes to household appliances, to cars, and many others; this type of marketplace has everything under one roof and reaches a broad audience.

Must-Have Features of an E-commerce Marketplace

Running an E-commerce marketplace is a rather challenging and competitive business. There is a wide range of E-commerce platforms online that offer practically any kind of product. Therefore, to attract as many customers and sellers as possible, platform owners have to carefully consider which features to include to make their solutions super flexible, intuitive and being able to cater the most to the needs of their users.

Here are the most important features to integrate into an E-commerce marketplace to make it a successful and user-friendly solution.

Product Information Management

The product information management (PIM) system is essential software for simple product data management and selling through various distribution channels. It gathers product data in one place and ensures its accurate view across multiple selling channels.

Product Information Management

With PIM embedded into an E-commerce marketplace, sellers will be able to:

  • maintain consistent and high-quality product information;
  • collect data from various sources and in various formats, unifying it and adding it into a single data source;
  • push data across distribution channels;
  • identify and simply fix any problematic data;
  • quickly filter out the needed data;
  • create and manage categories for effective product organization.

Online Product Catalog Management

Online product catalog helps sellers to provide potential customers with well and neatly organized product data in a web store. With a well-built catalog, sellers will be able to simply edit, add, and modify product data.

It may be confusing why an E-commerce digital platform owner may need an online product catalog when they already have a PIM solution. Both systems belong to customer-facing content that allows working with product elements, though each solution will make it in its own way.

While PIM allows managing product data through a multifunctional database and offers a much broader vision on products, an online product catalog has a more traditional approach, allowing admin to work with the data right in the catalog.

Procurement Management

Procurement management systems include all the data related to product acquiring, e.g. product shipment, storage, restocking, etc. – practically everything that ensures that products are in stock and can be promptly delivered to buyers.

With procurement management systems, sellers can:

  • manage order requests, statuses, and approvals;
  • track the product supply processes from package to delivery;
  • swiftly update information in product catalogs;
  • accurately manage budget, e.g. monitor spendings or set purchasing limits, etc.;
  • manage suppliers, e.g. simpler identify, analyze, and onboard suppliers, etc.;
  • easily maintain all the documents associated with the procurement processes;
  • generate visual and detailed reports of the ongoing processes, and much more.

Invoice Process Automation

An automated invoice processing system streamlines invoice processes, making them easier to perform. With automated invoicing sellers can:

  • swiftly process high-volume sales;
  • split payment for consignments;
  • bill oversized products;
  • perform payment reconciliation;
  • handle shipping carriers, warehouse costs, courier payments, and others.

Invoice Process Automation

Sellers can simply manage all their finance-related processes using just one tab on the E-commerce marketing platform. Moreover, they can easily integrate invoice processing systems with their internal systems such as inventory management or accounting software to process payments even simpler.

Payment Processing

A stand-alone solution for payment processing can help businesses ensure seamless and well-secured customer payments on their platforms.

The features included in marketplace gateways can be:

  • management of recurring payments;
  • customization of payment flows, e.g. parallel payments, chained payments, multiple payments, and others;
  • diverse currencies support and automatic exchange;
  • sending of invoices and notifications to email or as push messages;
  • fraud protection;
  • customer support, and others.

Delivery & Transportation

Delivery and transportation system includes transportation management and order tracking tools. While transportation management is a backend process used by sellers to ensure the smooth movement of goods, order tracking allows customers to check the process of their purchase delivery.

Delivery & Transportation

With delivery and transportation, it’s possible to:

  • optimiz