“What if we launch our own marketplace?” is a question often asked by growing businesses and entrepreneurs with a new idea. The idea looks attractive: you don’t buy goods, keep a warehouse or handle shipping — you only connect sellers and buyers and take a share of every transaction. But a marketplace is not just a bigger online store. It is a two-sided platform, and the biggest difficulty of a two-sided platform is not technology but attracting two audiences at the same time.
In this article we look at how a marketplace works, which business models exist, which technical and operational challenges to prepare for, and how to attract your first sellers and buyers. We have a separate article on the difference between an aggregator and a marketplace, so here we go deeper into the topic from a practical angle.
What a marketplace is and how it differs from an online store
In an online store there is one seller — you: you buy the goods, set the price, store and deliver them. In a marketplace the goods are offered by many independent sellers, while the platform connects them with buyers and guarantees payment and trust. So the marketplace owner’s job is not to sell goods but to build a well-functioning market.
This difference affects the entire project. In an online store you control the assortment and prices yourself, while in a marketplace the quality, prices and behavior of sellers are partly outside your control. So before technology you need to think through rules, trust mechanisms and conditions that benefit both sellers and buyers. The product card and checkout principles from our article on online store conversion apply to a marketplace too, but here they gain additional layers.
Business model: how a marketplace makes money
The most common source of marketplace revenue is a commission on each transaction: when a seller sells a product, the platform takes a certain share of the sale. This model is convenient for the seller, who pays only for sales and takes no upfront risk, while the platform earns more as sales grow. The commission size depends on the category, competition and what the platform gives the seller.
There are other models too: a regular subscription fee from sellers, paid advertising for higher placement in search results, and additional services (logistics, photography, analytics, warehousing). Many platforms combine several models. The choice of model should rest on a calculation made before the project starts: the seller’s margin must stay attractive after the commission, and your income must cover operating costs. If both conditions are not met, even the best platform will not survive in the long run.
The chicken-and-egg problem: how to attract two audiences
The main difficulty of a marketplace is that sellers come only if there are buyers, and buyers come only if there is choice. At the start there are neither, and nobody wants to join an empty platform. There is no definitive formula for solving this, but there are approaches that work.
Many successful platforms start from one side, most often sellers. They pick a small niche or a single city, build enough assortment within it, and only then expand. In a narrow niche the assortment “fills up” faster, and the buyer sees a reasonable choice. To attract sellers early on, low or zero commission, personal help and support with uploading goods, as well as transparent rules and realistic sales promises are useful. And to attract buyers, a narrow and specific offer — for example, the most attractive selection in one category — works far better than a general platform “for everyone”.
The platform’s main modules
A marketplace usually consists of three parts, each almost a separate product. The buyer-facing part resembles an online store: catalog, search and filters, product card, cart, order and personal account. The seller dashboard covers adding and managing products, changing prices and stock, processing orders, settlements and analytics. And the admin panel lets the platform owner verify sellers, moderate products, configure commissions, resolve disputes and see overall statistics.
Many projects underestimate the seller dashboard, yet it is the heart of the platform: if uploading goods is inconvenient for sellers, the assortment will not grow. For working with a large catalog, bulk upload (via spreadsheets and files), integration with external accounting systems and automatic stock synchronization matter. We covered such integrations in detail in our article on API integrations. Designing roles and permissions properly is also important: a seller should see only their own products and orders, similar to the roles logic in our LMS article.
Payments and settlements: the hardest part
Payment in a marketplace is much more complex than in a regular store, because money from one buyer has to be split between several sellers and the platform. A typical scenario: the buyer pays for the order, the money goes through the platform, the commission is withheld, and the remaining amount is transferred to the seller once a certain condition is met — for example, after the goods are delivered. This mechanism protects both buyer and seller, but it must be built correctly, both technically and legally.
In this part it is very important to discuss the specific solution with a payment provider and a lawyer at the very start of the project. Which schemes are permitted in Kazakhstan, license and reporting requirements, and tax issues directly affect the structure of the project, so what is needed here is specific advice rather than a general recommendation. We covered the technical side of connecting payments, webhooks and security in our online payment article; in a marketplace this adds split logic, refunds and the ability to hold money during disputes.
Trust and moderation
In a marketplace the buyer trusts not one company but many unknown sellers, and the platform is the guarantor of trust. So moderation and trust mechanisms are mandatory: seller verification at registration, control of product descriptions, filtering of prohibited goods, fraud prevention and a fair review system.
Reviews and ratings are the best tool for showing a seller’s quality, but they risk being fake, so leaving a review is often allowed only after a real purchase. The dispute resolution process must also be thought through in advance: if the goods don’t arrive, don’t match the description or the seller doesn’t respond, it must be clear where the buyer and seller turn and how the platform reaches a fair decision. If this process doesn’t work, trust in the platform is lost quickly.
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Logistics: even if the platform never touches the goods
Even if the platform does not store goods itself, delivery remains an important part of the buyer’s experience. In most marketplaces there are two main cases: the seller delivers on their own, or the platform builds a chain with logistics partners. The first is simpler for the platform, but quality depends on the seller and is unstable, while the second increases control but is more complex and more expensive.
In any case, delivery terms and times must be shown transparently to the buyer, and order status tracking and the return process must be clear. Integration with delivery services is a frequently demanded feature in the market: it helps calculate delivery cost automatically and create shipments. This also falls under API integrations.
Technical architecture and scaling
The technical difference between a marketplace and a regular store is mostly in load and complexity. The catalog can consist of thousands, sometimes millions of products, and search must be fast and accurate. For this, dedicated search engines and caching are usually used. Simultaneous actions by sellers and buyers, bulk uploads and promotion peaks put load on the system, so the architecture must be designed for growth in advance.
As the platform grows, splitting functionality into separate modules — for example catalog, orders, payments, notifications — lets you scale each part independently. This logic is described in our microservice architecture article, but it is not required at the start: for a small project a modular monolith may be enough, and splitting is better done when a real need arises. The choice of hosting matters too, because uninterrupted platform operation is part of the trust for both sellers and buyers.
Legal and security matters
A marketplace works with the data of many people: buyers’ personal details, sellers’ legal and bank details, payment information. So personal data protection requirements are especially important here; we covered them in a separate article. Security must be planned from the very first stage of the project: restricting access to data, not storing payment data yourself, protecting the admin panel.
In addition, the platform’s user agreement, the contract with the seller, and the rules for returns and disputes must be properly drawn up legally. These documents define the limits of the platform’s responsibility: whether the seller is responsible for their goods and in which cases the platform steps in. Specific requirements depend on the structure of the project, so consulting a lawyer in advance protects against costly mistakes.
How to start: MVP and testing
Building a marketplace at full scale right away is the most expensive path. A good way to reduce risk is to first launch a small version that runs manually: in a limited niche, with few sellers and simple functionality. Sometimes orders are processed partly by hand at first, and automation is added once real need and demand are proven.
The key question of the test is not “can we build the technology?” but “do sellers and buyers actually come, and do they return?”. If the first sellers make sales and buyers purchase again, the platform is moving in the right direction. If not, before adding complex functionality you need to revisit the offer, the niche and the rules. This logic matches the MVP approach from our articles on mobile apps and website development.
Common mistakes
The most common mistake is starting from technology: building a big platform and only then looking for sellers and buyers. The result sits empty, because the problem of attracting two audiences was not solved in advance. The second typical mistake is choosing a niche that is too broad: a “platform that sells everything” stands out in nothing at the start and competes directly with the big players.
Also common are an under-designed seller dashboard, treating payments and settlements as simple, leaving moderation and dispute resolution for last, and ignoring legal matters. Another danger is not calculating your own economics: if the commission is unattractive for the seller or insufficient for the platform, the model does not work.
Checklist
- It is clearly stated in which niche and for whom the platform is built
- The business model (commission, subscription, advertising) is calculated and works for both sides
- There is a plan for attracting the first sellers and buyers
- The buyer side, seller dashboard and admin panel are planned
- The payment split and settlement scheme has been discussed with the payment provider and a lawyer
- Rules for seller verification, moderation and dispute resolution are written down
- Delivery terms and logistics partners are defined
- The architecture is designed for growth, with search and load taken into account
- Personal data, security and user agreements are legally formalized
- The first version is planned as an MVP in a small niche for testing
