Start your multi-vendor marketplace on Shopify

Last update: 28 April 2025, 18:12

Learn how to get started creating a multi-vendor marketplace on Shopify.

At Garnet, we have worked with hundreds of marketplaces. For some, it was their first business starting totally from scratch. Others are established businesses looking to upgrade their vendor experience. We have distilled all our tips to get started building your marketplace.

This approach is adapted for new actors in the marketplace industry.

1. Plan your marketplace

First things first: what will you sell on your marketplace and to whom?

1.1. Find your industry

If you are a business looking to extend your current offering, you are probably already settled on your industry as it is the same as your business.

For others, here are the key factors to consider when choosing your industry:

• Community Knowledge: Select an industry where you have strong connections and understanding
• Problem-Solving: Look for areas where you've personally experienced pain points that need addressing
• Network Advantage: Choose a field where you have established relationships with either vendors or buyers

These factors will help you:

• Better understand customer needs
• Build trust with both vendors and buyers
• Attract customers more effectively

1.2. Business model

Which type of marketplace will you create?

C2C model (Customer to Customer): your sellers are your customers. For instance, My Next Bike is using Garnet Marketplace to power their platform. There is a single login for both buyers and sellers.

B2C model (Business to Customer): your sellers are businesses selling to customers. Such as Our Peak Health, aggregating around a hundred quality vendors on the same website. Vendors can synchronize their catalogs using Garnet integration features.

And how will the marketplace earn money? There are multiple ways and people continue to become creative to find new ones:

• Commission-based: Take a percentage of each sale, typically between 10-90% depending on your industry and value proposition
• Listing and featuring fee: Charge vendors for listing their products or featuring them prominently on your marketplace
• Subscription-based: Offer vendors different membership tiers with varying benefits and features

1.3. Define your commission

At Garnet Marketplace, we usually do not work with stores whose commission is below 10%. The marketplace is probably differentiating themselves by being cheaper than the competition. If the only edge of the business is the price, there is little money left for running the business.

If you don't know, start with a 25% commission and adapt your commission as you grow. Vendors are usually fine with higher commission as long as you increase the selling price by the same amount.

Marketplaces selling digital products can even claim 50% commission or higher. As the products can be replicated and do not require shipping, vendors are looking for as many platforms as possible to sell them.

1.4. Niche down

Niche down means serving a more specific type of customer. This focused approach helps you stand out in a crowded market.

Being niche helps differentiate your marketplace from other general marketplaces and traditional ecommerce stores. When you specialize, you can better understand and serve your target audience's specific needs.

It's better to niche down early in your journey. This strategic focus helps you pinpoint your target customers and make your first sales more quickly. Early specialization allows you to build expertise and credibility in your chosen area.

You probably don't want to compete directly with general purpose marketplaces like Amazon, Faire, or Etsy. Instead, you want to carve out your own unique space in the market. By focusing on a specific niche, you can create a more valuable and differentiated offering.

A great example of a client using Garnet Marketplace is Irish Flute Store. As you can tell from the name, they are selling Irish flutes. They started in the UK and now are a reference worldwide.

Another marketplace is selling handcrafted nappies in Australia. No other marketplaces will compete with this model.

2. Customers, vendors, and your first sale

What you do not want: start building a marketplace, find vendors, invest in a brand new theme, launch ad campaigns, only to find out that your customers prefer buying on Amazon.

2.1. Find communities

You need two communities: vendors and customers.

We strongly recommend starting by discussing with potential customers. These customers will tell you how they buy, what they are looking for, and possibly how much they are willing to pay. Most importantly, these customers can point you to other groups of customers.

To start finding your first customers, look at:

• Facebook groups
• Reddit communities
• Local meetups and events
• Industry-specific forums
• LinkedIn groups

As mentioned before, finding vendors will be easier as vendors are always open to sell provided that the selling price is increased by the same amount as the commission.

2.2. Find vendors

Reducing vendor friction is crucial for marketplace success. The easier you make it for vendors to upload their inventory, process orders, and receive payments, the more they'll be motivated to sell through your platform. A smooth experience encourages vendors to list more products and maintain active participation.

Our experience shows that satisfied vendors are more likely to offer unique, hard-to-find products and competitive pricing. They become valuable partners in growing your marketplace's product selection and value proposition.

Too much friction in the vendor experience can have significant negative impacts: it often results in fewer active vendors, limited product selection, inventory management issues, delayed order processing, and poor customer service.

2.3. Make your first sale offline

We found that the marketplaces with the fastest growth are always close to their customers. Most importantly, they know their products will sell without even starting a website.

A good way to confirm the business model is to make your first sale on your own. If you are a new business, find a potential customer and do your best to find them a product. We were amazed at how quickly StoneWraps created their marketplace with Garnet and made their first sales within days.

3. Build: choose your e-commerce technology

Once you have your model and possibly your first order, you need to select which tool you need. This is a crucial step as you will likely stick with it for several years.

There are 3 main categories of e-commerce solutions:

1. Managed e-commerce technologies (like Shopify)
2. On-premise e-commerce technologies (like WooCommerce)
3. Custom built technologies (like Amazon)

In short, we recommend going with Shopify until the marketplace revenues exceed $30 million annually.

3.1. Managed e-commerce technologies (like Shopify)

Managed e-commerce technologies are the most straightforward: start your subscription and you can build. You can iterate quickly, pick a nice theme, and leverage other plugins to grow your business.

Pros:

• Easy to build and iterate
• Fast and reliable
• A lot of developers and resources
• Affordable with free trials

Cons:

• Pricing often contains a percentage on sales
• Payment gateway locked-in

Examples suited for marketplaces:

• Shopify: A leading SaaS platform offering an all-in-one e-commerce solution with themes, payments, and apps
• BigCommerce: Similar to Shopify, it provides a scalable hosted solution with built-in features for B2B and B2C

By far, Shopify has the biggest community and additional plugins.

3.2. On-premise e-commerce technologies (like WooCommerce)

On-premise e-commerce technologies give you full control over your store. You host it yourself (or through a managed host), which means more customization, but also more responsibilities. It's great if you need flexibility and don't mind getting your hands dirty.

Pros:

• No revenue-based pricing
• Ecosystem of themes and plugins
• More freedom to use custom code (i.e. at checkout)

Cons:

• Requires more technical knowledge
• You're responsible for hosting, security, and updates
• Performance and scalability depend on your setup

Examples suited for marketplaces:

• WooCommerce: A powerful WordPress plugin, ideal for small to mid-sized stores that want flexibility and full control
• Magento Open Source: Great for large and complex stores; highly customizable but requires more server resources and developer expertise

If you need deep customization and are comfortable with self-hosting, on-premise tools like WooCommerce are a solid choice.

We see a lot of marketplaces moving away from WooCommerce to Shopify due to performance reasons. As you scale, you will need a strong technical team to maintain your marketplace's performance.

3.3. Custom built technologies (like Amazon)

Custom built technologies are fully bespoke solutions, developed in-house from scratch. They're tailored to the business's exact needs and often built to handle massive scale, performance, and unique workflows. This is the most powerful — but also the most resource-intensive — approach.

Pros:

• Built specifically for your business logic
• No platform limitations
• Full control over infrastructure and performance
• Unique features and workflows are possible

Cons:

• Expensive to develop and maintain
• Requires a full team of engineers
• Long development time before launch
• You build everything — from hosting to checkout

Examples suited for marketplaces:

• Amazon: Their platform is custom-built to handle complex inventory, fulfillment, and massive global traffic
• Etsy: Created its own stack to support a peer-to-peer marketplace with millions of users
• Zalando: Developed a full custom infrastructure for fashion commerce at scale

Custom-built is overkill for most businesses, but if you're building the next Amazon or have very specific needs, it gives you unmatched freedom.

4. Talk to experts

We have been in your shoes and we have discussed with hundreds of marketplaces. Starting with a Shopify + Garnet Marketplace build has been proven successful. We'll be happy to meet you over a call to better understand your business and present you Garnet Marketplace: contact us to get started.