How to Create an Online Marketplace Like Etsy with WordPress

How to Create an Online Marketplace Like Etsy with WordPress

The online marketplace is the newest form of eCommerce. According to research, the concept of multi-vendor marketplace is very promising and replaces traditional online stores. You can create a fascinating online marketplace like Etsy with WordPress. This article gives you an idea of how to create an online marketplace like Etsy with WordPress

Create an Online Marketplace like Etsy with WordPress

Many online marketplaces are difficult to build. It requires programming knowledge, startup capital, and workforce. Today, it has become easier to build a marketplaces with WordPress like Etsy. All you just need an amazing ready-made multi-vendor marketplace script. This makes it easier to create an online marketplace like Etsy. Moreover, websites like Etsy help you to sell both physical and digital goods. So, start your own free online marketplace right now.

What is Marketplace Website?

An online marketplace website, sometimes called an electronic marketplace, is an eCommerce website where third-party companies can sell their products or services to consumers. All of the transactions are performed through the website owner.

What is Multi-vendor Marketplace?

A multi-vendor marketplace is a great tool to convert your shop into a fully functioning marketplace. It facilitates the process of adding sellers and keep track of their sales. Sellers or vendors can have their own profile and collection page with variety of products. Admin or merchant can easily set individual commission and global commission for all the sellers.

The story of Etsy

Etsy is an online marketplace, for buying and selling of vintage and handmade products. It is a free online store with unlimited products.

Etsy was founded in 2005 by Rob Kalin, Haim Schoopik, and Chris Maguire and is based in Brooklyn, New York. It was launched to allow crafters and vintage merchants to sell their products online. It took a significant time for creators of Etsy to launch their first version of the website. 

As of 2016, Etsy had over 1.6 million sellers with $677 million active buyers in the third quarter of 2016 alone.  In 2017, Etsy has 1.93 million active sellers selling products to 33.36 million active buyers. Let’s have a look at the development story summary of Etsy.

  • 2005-2007: the authors tried to create new site functions to attract more sellers. In July 2007 Etsy had its millionth sale, the profit grew.
  • 2008: Etsy got an additional $27 million funding from Union Square Ventures, Hubert Burda Media, and Jim Breyer.
  • 2009: users organized “etsyday”, social networks promotion which brought additional attention to the website. The sales volume was $10-13 million per month.
  • 2011: Etsy introduced People Search on Facebook to help buyers and sellers to connect with each other and become friends. Then Etsy made some changes to protect information about user purchases.
  • 2012: Etsy raised $40 million in Series F funding, and this funding is partly going toward expanding in the international markets.
  • 2015: Etsy went public with $1.8 billion valuations.
  • 2016: Etsy has bought Blackbird Technologies, a search technology using artificial intelligence(AI). The marketplace is the newest form of eCommerce.
  • 2017: Etsy has 1.93 million active sellers selling products to 33.36 million active buyers.
  • 2018: Etsy had more than 60 million active buyers and more than 3.9 million sellers.

Features of Etsy

Though Etsy seems like a common online marketplace like Amazon or eBay but Etsy is very different in its operations and products listing. Etsy lists only unique, creative, vintage and handmade product categories. Vintage products must be at least 20 years old and offer delivery of products around the world. Sellers has an option to create their own marketplace with their own name and a feedback to help the buyer to make their buying decisions. Etsy is also quite popular among women and 67% of registered buyers are women members.

How & Why Etsy Became Popular?

The popularity of Etsy goes to its business model and architecture. Unlike Amazon or eBay, Etsy is only a small business domain consisting of craft, art, handicraft, unique and handmade items. This threw in a positive advantage for Etsy in the eCommerce marketplace.

Let’s explore what made Etsy popular.

Compared to Amazon and eBay it is the value ascertained, that sets Etsy apart in the eCommerce business. Some of the great reasons for its popularity is as follows:

  • Etsy buyers are usually repetitive buyers who want traditional, vintage and handmade products.
  • It lets buyers to connect directly with sellers and buyers can buy customized and personalized products on Etsy.
  • Etsy is the best online marketplace to start the business for artists and creative business persons.
  • Etsy sellers pay for space the seller use and are cost effective for the seller.

In this marketplace, buyers, sellers, and employees get interested in each others’ success.

Own API’s:
Etsy has its own Application Program Interface (API) which allows web developers to enter into the Etsy community and build their own Etsy-powered applications for web, desktop, and mobile version. Lots of small businesses have utilized this approach to sell their products.

Word of Mouth Advertising:
Initially, Etsy was the only website to provide handcrafts products. Around 86% of Etsy businesses are run by women. These women are active advertisers for Etsy. This has heavily contributed to the growth of Etsy.

Offline Help and Support to Artists:
Etsy arrange and conducts workshops for local crafters. This enables crafters to get support on services and business consultations. In some cases, Etsy provides small loans to artists too.

Why create an online marketplace like Etsy?

Creating a marketplace website helps the seller to expand the business to newer geo-location and to connect with multiple buyers around the world. Websites like eBay and Etsy tapped a larger share of the market by building an online marketplace. Marketplace websites like Etsy and eBay engage the customers in a way to control the supply-chain of product delivery.

To build a marketplace website like Etsy, you can consider the common features:

1. Online ordering platform to allow buyers to buy and sellers to sell products smoothly.

2. Details of buyers and sellers are sensitive information and need to be secured.

3. Merchant panel to manage the products list on the platform with respective price list.

4. Notifications to keep buyer and seller up to date with relevant information.

5. Review and rating platform for buyers and sellers to rate and review to improve services by getting genuine reviews and rating.

How Etsy Works?

  1. Vendors signup on the marketplace and list their products for sale

At Etsy, listing of products are done with a fee. It charges a small amount to list every product, which is valid for 4 months.

2. Customers can browse these products and place an order for their specific products

Customers can use the advanced filters of Etsy to search items. So, the customers have a choice to ask the vendor or can simply add the product to cart.

3. Customers can make a transaction on the marketplace

Buyers can make all the necessary transactions on Etsy. It charges a commission of around 3.5% for each successful purchase. The excess amount is transferred to the vendor’s bank account.

4. Customers have an option to rate and review the products

Customers can rate and review any products. These reviews will be very useful for other customers. The rating system also benefits other buyers to value the worth of an item.

Etsy Business Model

Juggernaut, who made a detailed analysis of the 9 segments of Etsy’s business model in a chart.

Etsy Business Model

Etsy’s revenue model

Etsy is popular for listing unique products on its marketplace. It is also popular for its unique revenue model. Its major revenue models are as under:

1) Sellers can list their products list with a charge which is quite as low as $0.20 and is valid for 4 months. However, the overall outcomes of contribution from all listings amounts to be high.

2) For each sale, Etsy also charges the seller a commission. Vendors have the option to fix their sale price. But Etsy will charge a commission of 3.5% before it pays to the seller.

3) Special features are also available for sellers at an additional cost. They are basically advertising options such as featured products. Featured products can be visible in their shop to get more customers.

Showcasing factory-manufactured items plays a vital role at Etsy’s growth. This allowed broader product listing, wider user base and achieved good revenue for the company.

How much does it cost to create an online marketplace like Etsy?

Question may arise to your mind, how much does it cost to build a marketplace website? The cost to create an eCommerce website like Etsy is hard to figure out easily as the cost of building a multi vendor eCommerce website of such big proportions involves multiple factors like online marketplace designexpenses, annual hosting expenses, platform based development, payment gateway integration and much more.

eCommerce web development cost

Cost Depends on Following:

1. Choice of right Platform. Approximate Cost: $300 to $1000 (one time, except SAAS)

There are so many eCommerce platforms available in the market today. In fact, it is a crowded market with so many platform and functionality options that can confuse a beginner. On the whole, five major eCommerce platforms top of the charts as the most widely used and preferred platforms to build an eCommerce website.

There are free multi-vendor marketplace available also.

check out on the Best Open Source eCommerce Marketplace Platforms to Start Online Business 

Magento, Shopify, Dokan, WooCommerce marketplace, 3Dcart, Volusion are the top five ranking eCommerce multi-vendor marketplace platforms. The cost to build an eCommerce website like Etsy will vary depending on the choice from these platforms. There are SaaS based solutions with price ranging from $20 to $30 per month. Basically the cost will depends on best marketplace builder.

2. Store Design – Approximate Cost: $360 to $500 (one time)

A major part of the cost of eCommerce website development will relate to store designing and customization. The store design plays a vital role in bringing in traffic and driving conversions. It will also enable the store owners to explore multiple revenue streams without being restricted to vendor commission or product listing fees alone.

3. Web Hosting – Approximate Cost: $14 Onwards

You can host your eCommerce store in your own server or go for a SaaS based hosting. SaaS hosting usually comes for package rates that charge facilities based on products, traffic, storage, user accounts and so on.

The total average cost to build an eCommerce website is as below:

Hosting cost

From the above it can be easily inferred that a ready-made script is the quickest and easiest way out to make your own multi vendor eCommerce store like Etsy.

The cost to build a marketplace like Etsy would cost about $2500 to $50,000 to develop it from scratch.

Many multi-vendor marketplace platforms and SaaS marketplace like Etsy have come-up. Therefore, it has become easy to build a marketplace like Etsy.

How to Create an Online Marketplace like Etsy with WordPress

First, what is Dokan and how does it help us do what we want to do?

Dokan multi-vendor marketplace is a freemium plugin that extends WooCommerce’s functionality to turn it into a physical product marketplace like Etsy. We settled on Dokan multi-vendor marketplace for this tutorial because:

  • It’s basically designed for physical and digital products.
  • The free version is powerful enough to get started (though you’ll absolutely want the pro version for the most user-friendly marketplace).
  • It includes essential features like easy commission payments, front-end product submissions for store owners (only in pro version), and more.
  • The pro version includes a dedicated wordpress marketplace theme to take advantage of all of Dokan’s functionality.

Because Dokan multi-vendor marketplace leverages the power of WordPress, all you need to use it is:

  • A domain and hosting 
  • A working instance of WordPress marketplace multi vendor
  • A theme (or the wordpress marketplace multi vendortheme included with Dokan Pro)
  • Dokan + WooCommerce (wordpress marketplace plugin)

Here’s the steps how to build a marketplace website or peer to peer eCommerce websites like Etsy using Dokan and WooCommerce.

Step 1: Choose a domain name

The first step is to choose your domain name. That’s the URL people visit to search your site. For instance, the domain name for this site is

When looking for a domain name, try to get a .com domain name extensions. Internet users are more aware of the .com extension and trust in the marketplace having it more than .net, .info, etc.

Step 2: Get your hosting

The second thing you need is web hosting, but why? What is web hosting?

What is web hosting?

Websites are made of with files such as html files, CSS files, image files, etc. When you visit a website, your browser makes a request to a server which then returns these files.

This doesn’t mean that you need to buy your own server and manage the hardware. Instead of this you pay someone else to use their server. When you pay someone for space on their server we say they are “hosting” your website.

Step 3: Install WordPress

Here are some methods on how to install WordPress.

Method #1: Choose a host that comes with WordPress pre-installed

The easiest way to install WordPress is to just pick a host that does it free or automatically for you. Nowadays, many WordPress-specific hosts will let you choose to have pre-installed WordPress.

Here are a few recommended hosts that offer pre-install WordPress for you:

  • Bluehost – affordable and comes with pre-installed WordPress.
  • SiteGround – has tons of WordPress service marketplace-specific features that make your life easier.

Method #2: How to install WordPress via cPanel and auto-installers

cPanel is the dashboard that most web hosts providers give their customers. When you sign up for hosting, your host should give you with login details for cPanel.

In your cPanel interface, your host should give you an auto-installer. Auto-installers basically automate the full WordPress install process. So instead of doing everything manually, you just input some basic information, click a button, and the auto-installer installs WordPress for you.

 Method #3: How to install WordPress manually

Download the latest version of WordPress from

Then unzip the zip file and upload it to the public_html (or similar) directory of your website. If you’re not sure how to log in to FTP, ask your hosting provider for your FTP account information.

The rest will be done by your web hosting provider.

Step 4: Install WooCommerce

Etsy is the first and foremost eCommerce website. The difference between Etsy and a standard eCommerce site is that Etsy has multiple vendors. Instead of selling their own products, they invite others to sell their products on the marketplace.

We’re clarifying this because the most popular eCommerce solution in the world is WooCommerce.

WooCommerce is a free WordPress plugin that adds all the essential eCommerce features instantly to your site: shopping carts, checkout, payment processing, etc. There are a lot of paid extensions available to add more eCommerce features to your site.

If you’ve never used WordPress, it’s not so difficult to install the plugin. You can search for plugins and install them straight from your WordPress admin dashboard.

Search WooCommerce

After successful installation click on the Activate button to activate the plugin.

Activate WooCommerce

Now you will get WooCommerce in the plugins list.

WooCommerce Plugin list

Step 5: Install and Configure Dokan

The installation of Dokan is so easy, that anybody can install it with some few clicks.

Here is the installation guide in a video.

Configure Dokan

There is a tons of plugins available for adding the multi-vendor capability to WordPress, but Dokan stands out as the most advanced and comprehensive solution.


This plugin allows vendors to register for an account, open an online store, list their products, and review all their orders. Vendors also get their own dashboard on the front-end.

Dokan multi-vendor dashboard

The free version has all the basic functionality you need, but the professional options include a huge amount of extra options. You can review the full list of features from here.

Step 6: Pick a Theme

So far, we’ve discussed how to get your website online, add eCommerce functionality, and add support for for online marketplace development. That covers all the features you need to create an online marketplace like Etsy. The last thing you need is a great design.

The best theme for your site will ultimately depend on your taste and the niche you’re targeting. However, we have picked out a few that can stand out.

Since Dokan is a very popular plugin, there are quite a few premium themes to choose from. You can find 48 Dokan-compatible themes from here. The following themes among them are famous on basis of design quality, customization, and customer reviews.


Zass has a crafty and minimalist style just like Etsy. It has beautiful product pages and a drag-and-drop page builder for creating entirely custom marketplace website templates.

Zass theme to Create an Online Marketplace Like Etsy


Multimarket has a gorgeous design that caters to digital marketplaces. You can, use it to sell physical products. This aesthetic will work well for any type of unique cutting-edge products.

Multimarket theme to Create an Online Marketplace Like Etsy


Martfury has a more Amazon-like design than other themes. However, Amazon is a multi-vendor marketplace too, they just don’t promote and highlight their vendors the way Etsy does with their creators.

Martfury theme-Create an Online Marketplace Like Etsy

Reasons to purchase the pro version of Dokan to Create an Online Marketplace Like Etsy

While you can set up a physical product marketplace like Etsy for free using Dokan free version, if you’re serious about your marketplace, you should go with the professional version.

  • It will give your vendors a much better experience.
  • Vendors get more detailed storefronts and front-end submissions.
  • They can also generate their own coupons.

Because your vendors are the backbone of the marketplace, you want to keep them happy.

Additionally, the professional version allows you to charge more commission types. Whereas the free version only allows you to charge a flat percentage, the pro version lets you combine flat fees and percentages. 

And you can even implement an eBay style feedback system for vendors, which is very important for building trust in the marketplace.

So, get your feet wet with the free version, but if you want to create a fully functional multi-vendor marketplace, you should consider purchasing the pro version for $249.

Launch your Marketplace Like Etsy

To create the most successful marketplace startups just follow the above mentioned steps.

Hope this guide will clarify how to create an online marketplace like Etsy. While there is a lot to learn, you don’t need a lot of money or technical knowledge to build a peer to peer marketplace wordpress site like Etsy, and well, that’s just plain awesome.

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