A Step-by-Step Guide To Create An Online Marketplace Like Etsy

create Etsy like online marketplace
Startup Guides / The On-Demand Economy

A Step-by-Step Guide To Create An Online Marketplace Like Etsy

Last Updated on November 25, 2023

One of the most beneficial aspects of modern industry is the online marketplaces for an array of products and services and Airbnb, Amazon, and eBay show this. Despite immense rivalry, an online marketplace remains a compelling business concept in the era of the internet.

According to the business of apps, from 2017 to 2021 time spent on eCommerce apps has increased by 92% and eCommerce app downloads have increased by 11%.

Etsy, is an eCommerce marketplace that sells handmade and antique articles peer-to-peer (P2P), it is one of the most fascinating examples of an established marketplace.

In its niche, Etsy has already gained the number one position beating the rest of its competition. Millions of people visit etsy.com around the world to buy handcrafted shoes, exclusive furnishings, antique clothes, etc. Revenue from Etsy contributed to $441 million in 2017.

Well, Inspired by Etsy’s success? Hang on to learn how you can create a website like Etsy, how to create a product that is really required for the market, and get marketing tips for a website like Etsy to make money.

But before we dive into the secrets, let’s first understand what the secrets are about.

Before you start an online marketplace like Etsy, you should fully understand what an online marketplace is and how do they work.

What Is An Online Marketplace?

An online market is an e-company in which several companies can sell to consumers products or services. For eg, Amazon, Etsy, Airbnb, and eBay are online markets. The truth is that many retailers, hundreds of thousands of them in truth, will sell their goods to consumers visiting the website making these online shops a marketplace.

An e-company is an online market in which many businesses may offer goods or services to customers. For example, online markets are Amazon, Etsy, Airbnb, and eBay. The irony is that many retailers will sell their products to customers who access the website, hundreds of thousands true to the irony that they are made a demand for these online shops.

It’s a check-out mechanism that unites all sellers in an online marketplace. When you purchase on an online store, you should not click on the websites to complete the sale, you can buy from several different vendors on the internet, even though they are not related.

When consumers buy online, the traders buy to get an announcement about someone purchasing their goods, and then each seller can deliver the products purchased individually to the consumer.

This ensures that even though the customer will perform one online purchase with several vendors, the customer will be shipped separately with the goods of each vendor, meaning that each merchant with whom he has purchased a product will be supplied with a shipment box.

Basically, on the online store, shopping is like shopping from many e-commerce vendors, and also being able to pay all the merchants in one single transaction rather than making several.

Another factor that ties together online retailers is that they are typically based in a small area. For starters, Amazon has begun as a bookseller online marketplace. Airbnb began to rent rooms in San Francisco as an online platform. In general, online markets are more effective if they are based on a niche, so customers have justification to buy there and when they buy, they know what to expect from the business merchants.

The term “collaborative economy” or “sharing economy” is often used to describe an online marketplace, since basically it is made up of merchants who are working together to share or sell their idle assets in an open group place.

For many reasons, online marketplaces are becoming more mainstream: First of all, customer trust is improved in online marketplace sites to defend against fake merchants. Secondly, the online marketplaces are a realistic means for retailers to make money from products or services that can be idle and, ultimately, online markets create a sense of community in which both retailers and customers can support one another in their significant niche markets. We see this, in fact, from the Etsy online market, which is home-grown, handmade and craft goods sponsored by both vendors and customers.

Now that you have understood what an online marketplace is, let’s dive into the details about one of the most successful online marketplaces of all time, inspect the steps the company took, and how you can build a platform like that for yourself.

What Is Etsy?

Etsy is a special place of operation. Etsy is focused on original handcrafted goods instead of the inexpensive or low-quality mass-market goods pedalled by other online retailers.

Who is using Etsy? Who does? The marketplace is designed to encourage talented artists to display their creations to the world.

The average Etsy consumer might knit, draw or weave. They may create new furniture or decoration collections from the home or specialist studios or invest in advertising. Etsy is mainly a distribution outlet for retailers, a rare chance to ship their products to other nations and even continents.

Sellers on Etsy have another category as well. This community involves attorneys, physicians or high school teachers making and distributing their products in spare time.

For all vendor classes, Etsy attracted the right buyers. The users of the platform tend to use products in their households for their hearts. When they like what a vendor has to say, they are ready to order goods from abroad.

ETSY growth timeline

How Etsy Started

Etsy was founded in 2005 with its head office in Brooklyn, New York, by Rob Kalin, Haim Schoopik, and Chris Maguire. It has been launched to allow craftsmen and traditional businesses to sell their goods online. It took Etsy’s developers a long time to deliver their first website update.

In the third quarter of 2016, Etsy alone had over 1.6 million sellers and 677 million dollars in successful customers. Etsy has 1.93 million active dealers in 2017 and 33.36 million active purchasers selling goods. Let’s see a rundown of Etsy’s growth narrative.

  • 2005-2007: the authors have been working to build a new platform for vendors. Etsy’s millionth selling in July 2007 expanded, the profit rose.
  • 2008: The Union Square Projects, Hubert Burda Media and Jim Breyer provided Etsy with $27 million further funding.
  • 2009: people have arranged an “etsyday,” marketing of social networks that has gained the platform increased exposure. The revenue was 10-13 million dollars a month.
  • 2011: Etsy launched a Facebook search to help buyers and sellers communicate and become friends. Etsy then made several modifications to secure consumer purchase information.
  • 2012: Etsy has earned 40 million dollars in Series F investment, which is partial to be distributed to the global market.
  • 2015: The $1.8 billion valuations of Etsy were issued.
  • 2016: Etsy acquired Artificial Intelligence ( AI) software platform Blackbird Technologies. The current model of eCommerce is the marketplace.
  • 2017: Active selling products includes 1.93 million vendors to Etsy 33.36 million active purchasers.
  • 2018: Over 60 million active users and over 3.9 million sellers were active on Etsy.
Etsy’s features list

Features List of Etsy

Etsy appears to be a popular online auction, but with its lists of activities and goods, Etsy is somewhat distinct. Etsy lists only one type of items, artistic, antique and handmade. Vintage goods must be 20 years of age at least and sell products worldwide. Sellers may create their own website under their own brand to offer reviews that let consumers make purchasing choices. Etsy is also well established among women and they make up 67% of registered customers.

List Of Etsy’s features

  • For Admins
    • Dashboard for real-time updates
    • Ability to set the commission
    • Reports and analytics
    • Customer management
    • Invoice management
    • Stock management
    • Category management
    • Tax management
  • For Sellers/Vendors
    • Chat system to discuss details with buyers
    • Stock management
    • View upcoming/past purchases and shopping details
    • Transaction management
    • Create their own pages with vendor-specific store URLs
    • Order management
    • Internal chat system
    • Reports and analytics
  • For Buyers
    • Manage personal profiles
    • Shopping cart to choose items and buy them
    • View listings
    • Product search
    • Manage payment methods and view transaction history
    • Chat system to discuss details with sellers
    • Leave reviews
steps to build Etsy like online marketplace

Steps To Build An Online Marketplace Like Etsy

Now that we have examined Etsy’s big business strengths, let’s discuss how often marketing tech like Etsy wants to be developed from the ground up.

Step 1: Research And Analysis

You can never get into the mode of production immediately. Your closest buddies will be your training and your plan if you want to create a marketplace like Etsy that will prosper. But what should be the subject of your research?

  • Competitor Analysis

Etsy is the key rival, but there are other rivals too. They each come with individually personalized features. Analyze them! Check for sites specific to the industry, read app shop reviews, and try the services themselves. These strategies help you to understand the strengths of rivals and recognize places that can differentiate your potential product.

  • Buyer Persona Development

Typically no one can trigger a product or forum that wants to reach all. If the sales are so common, prospective buyers can not be drawn. Take your time instead to recognize your client, the perfect consumer. You would have to identify at least two individuals, the seller and the buyer because we are creating a marketplace. When you describe your purchaser more clearly, your future marketing strategies are more effective.

  • Revenue Model For The Business

In certain ways, a project can make money. Fortunately, in our article on marketplaces, we already mentioned them. Regardless of the model of monetization, before beginning the implementation process, you have to forecast maximum sales. Choose between membership, cost, and income ratio, or blend them to improve the appeal of your offering.

Related Read: Top B2B Marketplaces and How They Work

Step 2: Platform Development

Because a market has to deal with both suppliers and customers, it can prove very difficult to design a platform. But nothing is impossible!

You will be competitive and eventually successful with the right management. Concentrate on these two main points:

  • UX Development

A UX designer’s like a psychologist. Its purpose is to understand the motivation of users and anticipate expectations when a user joins your web application. The main challenge of the UX designer is to find means of satisfying these requirements of effective architecture. A UX expert builds an interface framework that relies on a clear and straightforward user experience.

  • UI Development

The UI designer joins the game whenever the app’s blueprint is prepared. You must bear in mind consumer desires to build a market that will conquer Etsy. Color, font, type, and transformation options should all reflect the intended demographic of your site.

Two separate practitioners do not have to (and hopefully do not) be the UX and UI programmers. Instead, many user interface designers have a good user experience and can build easily from scratch. What you have to do is outsource the construction of your marketplace.

You should have a prototype until this design stage finishes – a blueprint of the potential product that can be created, validated, and reviewed.

Step 3: Development & Testing

You might be able to instantly introduce all of the best features of Etsy if you’ve been dreaming about creating a marketplace like Etsy. Slow down. Slow down. Slow down. A standard best practice in production should begin with the production of a minimal viable product. (MVP)

Define the upcoming marketplace’s key functionality. These features can provide the minimum necessary functionality to fulfill the specifications of your target customer. The goal is to create a basic application as easily as possible with a minimal amount of capital. Then, starting this MVP checking.

Test with your future customers your MVP marketplace submission. Your key goal in this stage is to ensure that the public wants your service. In this case. Listen to consumers, take their ideas into account, and develop the offering.

Your company is far from assured success even though you clone the popular business model and application layout of Etsy. First of all, the use of a known website such as Etsy does not provide specific excuses to give up a nameless operation.

The stage of creation involved robust collaboration and lots of brainstorming sessions and projects with the target group. Take the best of Etsy marketplaces, then incorporate exclusive features and polish them through consultations with actual, trustworthy customers on the battlefield.

Step 4: Support & Scale-up

You have launched your MVP marketplace application at this stage, but your work is far away from over. Now is the beginning of the most exciting section of the project. Step 4 offers you the possibility to interact with actual customers, see first-hand how validated (or invalidated) the conclusions are.

It is important to interpret customer reviews. User reviews can be a continuing encouraging source of innovative ideas, new implementations and fascinating integrations. Continue to grow the app, but do not ignore current customers.

Ensure that you offer accurate information and technical assistance to customers. This improves customer loyalty and the likelihood of a positive recommendation for your service.

Step 5: Iterate, Iterate, Iterate.

We just can’t stress enough on the iteration and improvement bit of any type of application or website or platform development. This is because the world is highly dynamic these days and even if you feel that you have built one of the finest platforms of all time – there is ALWAYS a scope for improvement. Maybe in the UI, or perhaps the UX, or maybe backend code can be improved for your platform.

You should be open to constant iterations and improvements if you want to build a successful platform.

Related Read:

Technology Stack To Create Online Marketplace Like Etsy

  • Application and Data: Apache HTTP Server, Amazon EC2, Amazon S3, Amazon Cloudfront, Amazon EMR, Amazon EBS, Hogan.JS
  • Utilities: Google Analytics, Aftership, Appthwack
  • DevOps: Jenkins, RequireJS, StatsD, Hound by Etsy
  • Business Tools: G Suite

How Much Does It Cost To Build A Platform Like Etsy

Well if you have this question – how much does the construction of a marketplace website cost, then don’t worry, we will tell you that as well.

The cost to launch an eCommerce website such as Etsy is difficult to find out, as several variables, including internet marketing, annual hosting costs, platform-specific growth, incorporation of payment gateways, and much more, are involved in the costs of creating this wide eCommerce web page. 

But we can provide you with a rough estimate for the same.

  • The Platform’s Skeleton: $300 – $1000

Today, there are so many eCommerce sites on the market. Currently, it is a competitive market that can overwhelm a newcomer with too many site and options. Overall, five big eCommerce sites are the leading frameworks for creating an eCommerce website.

The top five eCommerce multi-vendor marketplace sites are Magento, Shopify, Dokan, WooCommerce, 3Dcart and Volusion. Depending on the choice of these sites, the costs for developing an eCommerce site like Etsy varies. Solutions with rates from $20 to $30 a month are available depending on SaaS. The prices depend fundamentally on the best builder of the industry.

  • The Design Part: $350 – $550

Most of the costs of creating eCommerce websites contribute to the construction and adaptation of the product. In terms of traffic and transit, shop architecture plays a critical role. It also helps shop owners to pursue several sources of sales without limiting themselves to vendor commission or transaction prices.

  • The Website Hosting Part: $20 Onwards

You can host your eCommerce shop or create a SaaS-based hosting on your own site. SaaS hosting typically comes with package rates which charge goods, traffic, storage, user accounts, etc. facilities.

Other Factors Which Make A Difference:

  • The Functionalities

Since Etsy is actively creating new functions so that you can’t just duplicate their operation. We suggest instead that you begin with a range of simple features which are part of an MVP definition. This technique helps you to show that your conclusions are sound and strategy is cheaper.

  • The Location

Of course, whether you live in San Francisco or Kyiv is a major dependency on your expenses. However, Ukrainian rates can also be seen for those living in San Francisco. The production of offshore apps will minimise your development budget to up to 60 per cent.

Today’s Ukrainian prices are $15 000 to $35 000 for basic MVP marketplace. Meanwhile, it would possibly be up to $80,000 for a US contractor with the same job and efficiency.

Price Card

Country Rate
US/Canada $150 – $180/hr
Western & Northern Europe $90 – $120/hr
Asia & Southern America $15 – $45/hr

I hope this article clarifies how an online marketplace like Etsy can be developed. While there is a variety to learning you don’t have to create a peer to peer WordPress platform like Etsy and you don’t need a tonne of capital or technological expertise. That is very nice.


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

The overall cost of any e-commerce application depends on a lot of different factors. An app like Etsy can cost around $30-50,000 or more, depending on the complexity of the app and other factors.

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

If you’re thinking about an app like Etsy, you’ll need to start with an efficient and elegant UI/UX.  Ease of registration, browsing, selection, and payment should be there, including multiple payment methods, live tracking, effective customer care, Multi language layout, and so on. Payment gateways need to be secure. Social media integration is also a crucial part of your app’s design.

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

Beginning with extensive research into the market scene, trends, competition, and the basic layout of the app, developers then begin to build the wireframe and features to lay on top of that. Marketing is an ongoing process, and user engagement is a crucial aspect of the whole process. Before launch, the app needs thorough testing and tweaking where needed. After the launch, app maintenance, timely updates, social media interaction with users, etc., are some of the post-launch activities relating to the process. You can scale your business as time goes.

What’s the different rates for development across the globe for developing an app like Etsy?

Across the globe, the hourly rates of development vary. For example, whereas in Southern America and Asia, the hourly rate of work is around $30- 60, it can cost you about $150-180 per hour in North America. In Eastern Europe, typically, it costs around $30-70 per hour, whereas, in western and northern parts of Europe, the hourly working price for developing an app like Etsy will be around $90- 120.


Interested in online marketplace? Know how to create a multi vendor marketplace


Comment (1)

  1. essy

    I need a Marketplace Like Etsy .Please send me your whatsapp number to talk , thanks


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