Skip to Content
Retail
8 minutes read

Can You Build a Marketplace on Shopify?

by Alvaro Insignares
Retail
8 minutes read

Shopify is a popular platform for creating eCommerce websites, but can you create a Shopify marketplace? Shopify was designed to be an easy-to-use eCommerce platform for entrepreneurs and small businesses who want to sell their products online. Marketplace stores vary significantly from eCommerce stores and have more pain points. For one, marketplace websites have multiple vendors, which complicates the shopping cart, shipping methods, order fulfillment, and commission rate when multiple items from multiple vendors are involved. 

Shopify can be a marketplace platform, but it does not come with multi-vendor functionality by default. If you want to create a multi-vendor marketplace using the Shopify eCommerce platform, you will have to choose a Shopify app with subscription plans or work with a development partner to create a custom marketplace functionality on your Shopify website.

Important Pain Points Marketplace Owners Need to Consider

Supporting multiple seller profile pages, delivering high-quality customer service, and ensuring accurate and timely order fulfillment are a few of the pain points that are more complicated in marketplaces when compared to eCommerce websites. Marketplace owners need to consider the following key pain points in order to successfully manage a Shopify marketplace:

  • Payment 
  • Commissions 
  • Shipping
  • Customer support 

These key areas don’t have to be pain points, but when you have multiple vendors using a Shopify marketplace, issues can present themselves. 

Payment

Sales on marketplace websites need to be split between the seller and the marketplace. Typically, the marketplace will collect payment and then transfer the money to the sellers minus any fees and commissions. Ensuring that the payment process happens seamlessly, transparently, and regularly is essential when it comes to maintaining good relationships with your vendor partners. Marketplace websites are more complicated because you can have customers buying products from multiple vendors in one order. 

Shopify offers add-on apps like Stripe Connect that can help marketplace admins manage payments, seller earnings, and commission fees. You also need to consider payment methods. The more payment methods you accept, the more business you can feasibly do. However, keeping track of payments gets more complicated when you add additional vendors and accepted payment methods. Determining your payment process should be the first step of your Shopify marketplace. 

Commissions 

Marketplace websites make the bulk of their revenue by collecting commissions on items sold on their platform. If you are planning on creating a Shopify marketplace, you need to determine what your commission rate will be. You also need to figure out how orders with products from multiple vendors will affect your commission rate, if at all. Commissions can become a pain point on marketplace websites when policies are not clearly communicated and enforced. Sellers need to have a clear understanding of what your commission rate is and when it will be applied. 

You also need to ensure that your commissions are being applied fairly and evenly across your marketplace. If vendors become aware that you charge some sellers more or less than others, they may become upset, and your working relationship with your vendors could become strained. Marketplace websites have the unique challenge of pleasing both customers and vendors. 

Shipping

One of the great advantages of running a marketplace is that you don’t have to worry about holding inventory and shipping products to customers. However, shipping costs and policies need to be clear and cohesive on your marketplace so that you don’t annoy or anger your customers. While you won’t be the one actually shipping or fulfilling orders, you can ensure that the shipping methods used on your marketplace are aligned. 

Your customers will likely be buying items from multiple vendors in a single order. Ensuring that your shipping methods are in sync across your marketplace helps you avoid customer confusion and allows you to keep shipping rates and policies aligned across vendors. Uniform shipping methods also make tracking orders and ensuring timely delivery easier to manage. 

Customer Support 

When you have an issue in a traditional retail environment, you can reach out to the store or seller for support and assistance. Who do you reach out to for customer support in a marketplace? Coordinating customer service efforts with your sellers might be the biggest pain point marketplace admins face. Let’s face it; when it comes to eCommerce, retail, or any business, there will be customer service issues that need to be addressed, whether it is issues with order fulfillment, returns, charge disputes, etc. Who handles these issues in a marketplace? 

It makes the most sense for the marketplace admins to handle customer support issues in a centralized manner, but admins may not be privy to key information about vendor products. If you are creating a Shopify marketplace, you need to determine your customer service policies and apply them across your website so you can deliver a quality customer experience. It is easy to lose track of customer concerns and complaints if they are being sent back and forth between vendor and admin. Customers who don’t get their issues resolved will likely never return to your marketplace. 

Shopify has a number of different apps that you can use to address and simplify these key pain points. However, it may make more sense to work with a Shopify Plus Partner to help you develop custom solutions to handle these issues on your Shopify marketplace. 

Why Choose Shopify?

Shopify might not offer default marketplace solutions for eCommerce stores. Still, many people choose Shopify as the platform for their marketplace. Why? There are a few key reasons entrepreneurs choose Shopify for their marketplace platform:

  • Reputation 
  • Experience 
  • Additional tools 
  • Cost
  • Ease

Shopify has been an industry leader in the eCommerce sector and offers people with little technical expertise the ability to create high-functioning eCommerce stores. 

Reputation

Shopify is used by over one million businesses, including giants like PepsiCo and Staples. The company has earned the trust of entrepreneurs and business owners around the world. As more people choose Shopify for their eCommerce needs, the platform gets more powerful, the User Interface improves, and better tools are developed to address common pain points. If you’re looking for a reputable eCommerce platform, you will be hard-pressed to find one with a better reputation than Shopify. 

Experience 

Shopify is an eCommerce platform. They specialize in eCommerce and develop their product offerings around the unique needs of these websites and businesses. Over a million businesses use Shopify because this platform has experience helping set up successful eCommerce stores, including marketplaces, even though they don’t offer default marketplace capabilities. Experience is just as important as reputation, and these two things often go hand-in-hand. 

Additional Tools 

Shopify offers eCommerce marketplaces a ton of additional tools that they can install and take advantage of. Shopify has tools for:

  • Product integration 
  • Design 
  • Functionality
  • Inventory management
  • SEO
  • And more

Additional tools and apps offered by Shopify give people with less technical prowess the ability to create sleek, powerful, professional-looking eCommerce websites. If you want to create a Shopify marketplace, you will need to use an additional app. Shopify has a suite of tools and apps that help business owners do just about anything they could want with their website. 

Cost

Another key reason entrepreneurs and business owners choose to work with Shopify is because it is cost-effective. If you have an idea that you want to develop quickly and cost-efficiently, Shopify is a great eCommerce platform choice. Many businesses develop an MVP using Shopify to determine if they have a viable business opportunity. 

Ease 

We’ve already touched on how easy Shopify is to use for people with little technical expertise, but the simplicity of this eCommerce platform is one of the reasons why it is a great choice for eCommerce businesses of all shapes and sizes. Creating a Shopify marketplace is more complex, but it is still very easy to do on this platform. You can also work with a Shopify Plus Partner to help develop your marketplace app. Working with a development partner can help you develop custom tools and solutions to manage your unique needs.

Final Thoughts on Shopify Marketplaces

While Shopify might not offer default marketplace solutions to eCommerce stores, it is still a powerful eCommerce platform that can be used to create a sleek, professional online marketplace. Marketplaces present a number of unique pain points that single vendor eCommerce stores don’t have to face. Shopify does offer tools that you can use to ease these pain points, but it may make the most sense to work with a development partner to craft custom solutions that perfectly match your needs.

Girl With Glasses

Want to Build an App?

Contact Us