How to create an Online Marketplace like Etsy

Introduction: What is the Etsy marketplace?

Have you ever thought how to create an online marketplace like Etsy? The online marketplace niche has a tremendous amount of competition. Still, it is one of the most profitable business models right now.

If we look at the figures, in 2019 alone, online marketplaces had over $2.03 trillion worth of goods listed. This accounted for more than 58% of total online sales worldwide.

We have studied what makes Etsy so unique and want to help you answer all your queries regarding how to create an online marketplace like Etsy. The platform primarily focuses on providing high-quality handcrafted items instead of manufactured products.

If you wondered how to create an online marketplace like Etsy, you have come to the right place. We at Idea Usher have done this multiple times and have a robust portfolio of developing Etsy-like marketplaces.

Coming back to the topic, one of the most known examples of a booming online marketplace is Etsy. It is an e-commerce platform that primarily deals in handmade and vintage items. Based on a peer-to-peer model, Etsy makes it easy for sellers and buyers to connect directly.

How to create an Online Marketplace like Etsy

What exactly is Etsy as an online marketplace?

The concept behind Etsy is quite simple. They provide people with an online handicraft store to list and show off their creativity. Sellers can list their handmade items in a world where almost everything is manufactured. This makes people look forward to buying unique things.

The company started in 2005 and quickly became the place to go if someone wanted to buy vintage or handcrafted items. In its first year, it garnered a lot of attraction for adding numerous tools and features. In 2007, Etsy surpassed more than $1.7 million in sales figures.

Here is a short timeline of what Etsy has been able to accomplish over the years:

2005-2007: Etsy presented itself as a platform where vendors could list their products, with the millionth sale in 2007.

2008: Investors fund Etsy with $27 million

2009: Etsy’s monthly revenue is now 10-13 million dollars per month

2011: The platform offers sellers and buyers to become friends on Facebook. The company put some security mechanisms in place to prevent the leaking of customer information.

2012: The company secured $40 million in a Series F Investment

2015: Etsy is valued at 1.8 billion dollars

2016: Acquired an Artificial Intelligence firm called Blackbird technologies. This company helped them build their current eCommerce model.

2018: The platform now has more than 60 million active users and 3.9 million sellers listed.

How to create an Online Marketplace like Etsy

What makes online marketplaces like Etsy popular?

There are a few reasons why websites like Etsy are so successful at what they do, despite marketplaces like Alibaba and Amazon offering a wide range of products. The secret ingredient to Etsy is its exclusiveness. For example, if you want to buy a toy, it will either be handmade or made decades ago. Like NFT, it is one of a kind.

  • Diverse digital assets across categories
  • Easy seller sign-ups
  • Easy for customers to browse products (digital assets)
  • User-friendly interface
  • Customer support

More than 80% of Etsy’s buyers return to the platform to buy another product.

Apart from offering unique products, one of the main reasons why Etsy retains its clients is because of how it works. Instead of talking to a customer care executive, people are able to communicate with the seller directly. This enables like-minded people to inspire and share experiences while also making some money.

How to create an Online Marketplace like Etsy

Which panels are available on Etsy?

Although Etsy is an online marketplace, the limited type of items available on the platform makes it stand out. The Vintage products listed on the website need to be at least 20 years old. The majority of Etsy’s customers are women, who make up almost 70% of registered users.

Like all other marketplaces, Etsy has different features for its users.

Admin Panel:

  • A dashboard with real-time updates
  • Set commission based on your preferences
  • Manage inventory
  • Access to reports and analytics
  • Manage customers
  • Keep track of your taxes
  • Manage product categories
  • Invoice management


  • Profile management
  • View products
  • Review products
  • Chat with sellers
  • Payment management
  • View purchase history
  • Search product catalog


  • Create your own webpage/store
  • Personalized URLs for your store
  • Internal chat system
  • Chat with your buyers
  • Access to reports and specific analytics
  • Manage your transactions
  • View upcoming and past purchases

These are the basic features if you want to create a marketplace like Etsy. Keep in mind that the features listed above describe how the Minimum Viable Product should look like. The platform is known for adding and trying out different features regularly.

how to create an online marketplace like Etsy

How does Etsy generate its revenue?

Now you might be wondering how Etsy earns so much while facilitating the sale of goods between its users. To put it precisely, Etsy makes money like every other marketplace out there.

The company’s revenue mainly comes from two sources – commission and advertising.

Commission model:

  • For sellers – the commission fees are set to a flat 5% for every sale they make.
  • Product Listing – For every product a seller lists, Etsy charges $0.20. The listing expires in four months, after which the seller has to repay the charge.
  • Order Fee – The marketplace even has an order fee that depends on the seller’s bank account location.

Advertising model:

Currently, there are two types of advertising Etsy provides-

  • Promoted Listing – This type of advertising lets sellers reach a broader audience to interested customers.
  • Google Shopping – It enables sellers to list their products outside of Etsy. The platform also submits its promoted listing to Google on a reasonably regular basis.

Although this is how marketplaces like Etsy make most of their money, it is not the only way to do so. Depending on the audience you are targeting, you can explore others’ methods, such as offering a premium membership.

like Etsy

What Challenges Will I Face When Creating an eCommerce Marketplace like Etsy?

Competing with other online marketplaces

There are several online marketplaces like Amazon, Alibaba, and Etsy. The competition in the niche is quite fierce. Even retail giants like Amazon are looking to venture into the handmade items niche. The company recently launched Amazon Handmade, a direct competitor to Etsy.

But Etsy survived that. It was because the company had a loyal customer base. Unlike Amazon Handmade, the sellers on Etsy had personal connections with their customers. The website already has a vast product catalog, which also helped it come out on top.

Weeding out the low-quality products

Another challenge every online marketplace has to overcome is the listing of counterfeit goods. Platforms like eBay have tried to tackle this problem for years. For example, suppose a seller is listing an item. But it is already being sold by another seller. The platform should have a way of telling which listing is original.

Letting users review and rate products is an easy but effective way of spotting low-quality or fake products. The worst nightmare for any online marketplace is a bad reputation. Product moderation is essential if you want to build a trusted marketplace.

The art of retaining buyers and sellers

The most critical challenge any business faces is to make sure that their customer comes back for more. Etsy had a unique solution to the problem of retaining customers for repurchases. They gave some hints to the sellers, such as what the customers wanted to buy and even shared their data with them.

It helped the sellers list what the buyers wanted to buy while customers now knew that they would get whatever they wanted from the seller. Etsy made sure both buyers and sellers won in the process.

If you want to create a booming online marketplace in today’s era, make sure your platform has a unique selling point, something that differentiates itself from others. Instead of the competition letting you down, analyze where the competition fails to fill in that gap.

app like Etsy

How to create an Online Marketplace like Etsy: Tech stack requirements

If we look at the current trends, mobile devices will take over desktop traffic in a couple of years. This means that you should start with an online marketplace that also has a mobile application. We at Idea Usher have expertise in mobile app development. From pharmacy delivery apps to NFT marketplaces, we have developed apps in numerous niches and even worked on products like Etsy.

For creating an online marketplace like Etsy, you must consider a few factors. Ensure your product works across all devices, including mobile devices, tablets, and laptops. We have listed some front-end and back-end tools you can make use of:

Front end development

  • Angular JS
  • Spring MVC
  • jQuery

Back end development

  • MongoDB
  • MySQL
  • Bluehost
  • Amazon AWS

How to create an Online Marketplace like Etsy: Phases of development

First and foremost, decide the type of audience you want to target. Before diving into the development process, you should prepare and strategize. The whole point of app development is that you need to understand the overall process to estimate how much time it will take.

Before the mobile app development process, make sure you have meticulously planned everything you need. It will help your business boom. Just like there is no answer to the egg and chicken problem, asking the question ‘how many days will it take me to create an app’ is fruitless. Every app is different, with some complicated features, which might take more time than others.

After you decide what you want your app to do, some general mobile development timelines determine the time it will take to finish the project.

The app development timeline consists of multiple stages. Let us have a look at what they are:

Stage 1: The role of Business Analysts

The app development process begins by understanding the needs of the user and what the company wants its app to do. Here is where business analysts come in. They will help you differentiate between the features you need and the features you want your application to have. These analysts also provide consultation and are responsible for documenting everything right from the back-end architecture to the wireframing of the screens. It ensures that the application overlaps with the business requirements.

Stage 2: UX and UI design

A good UX design is made keeping in mind user-friendliness and integrating with the overall business model. The UX designers place all the buttons, screens, and fields of the application. The UX designer ensures that the user can easily navigate through the application. According to various statistics, a user who finds an application hard to navigate will most likely never use it again.

User Interface is one of the most crucial aspects of any software or application. If you want to create a marketplace like Etsy, you should have an easy-to-use and attractive UI. The UI designer chooses the color palette the application will use and ensures that the animations blend with the theme you opted for.

They also make sure your application looks the same across various platforms such as Android, iOS, and Windows.

Stage 3: Back-end development

The back-end architecture is the backbone of any application. Back-end developers are in charge of building the database and the server of the application. Every app on the internet needs to synchronize data, handle queries and storage and keep up with various authentication methods. These requirements are the responsibility of a back-end developer.

Stage 4: Front-end development

While back-end developers are responsible for the technical aspects of any application, front-end developers help you guide you through the process of interface creation. They make use of the assets developed by the UX and UI designers, helping you create an app the way you imagined it to be.

This is where your focus should be since a good application is defined by the way it looks and feels. Even if you encounter any hiccups in the back-end or have limited functionality, the application can still be good. If your application is laggy or crashes frequently, you might have wanted to reconsider everything altogether since this results in an inevitably negative experience.

Stage 5: Debugging and testing

One of the most overlooked aspects of the application development process is testing. Many companies tend to shorten the time it takes to iron out the bugs and glitches. However, testing is one of the most important parts if you want your application to succeed. So make sure your application is free from any unexpected bugs or errors before you launch it.

Stage 6: Post launch app Maintenance

After launching your mobile application in the market, you might need some support in the initial stages. Any good app development company will provide you with post-launch support services. This stage of the app development process should not be skipped at any cost.

Cost to create an online marketplace like Etsy

Now you might be wondering how much money I need to spend to develop an e-commerce marketplace like Etsy. Worry not, we will help you get a general idea of the costs involved in every stage of the application.

Keep in mind that no application is the same, and while we cannot give an exact figure, here are the estimates regarding the same.

The bare bone e-commerce skeleton – starting from $300

If you browse on the internet, you might already know that the competition in the online marketplace niche is not just challenging but fierce. In this highly competitive market, some big players help you create the generic framework of an e-commerce website.

These multi-vendor marketplaces include Shopify, Dokan, Magneto, 3Dcart, WooCommerce, and Volusion. Before you ask what’s the best amongst these, the answer is none of them. Every service has its pros and cons. So, depending on your preferences, the cost of these solutions ranges from $20 to $30 per month.

Website Design – starting from $350

The central part of any e-commerce business like Etsy is its website. A good design alone can help your product gain massive popularity amongst users. Idea Usher has a robust portfolio when it comes to web development.

Hosting Providers – $20 and up

The internet is an endless pool of services, and it is the same with hosting providers. You can either opt for your website hosting or use a SaaS platform to do the same. If you go for SaaS services, there are monthly and annual packages to choose from that offer you several add-ons such as email, user accounts, storage, and many more.

Features required – as per requirements

While there is no limit to the number of features you can have, make sure you don’t necessarily ask for everything. Online marketplaces like Etsy are constantly working on newer features, meaning you cannot just go around copying and pasting their feature set.

If this is your first time creating an online marketplace, we recommend you go for an MVP product.

Geographical location

The cost of developing something like Etsy also depends on where you are located. Suppose you are located in the United States, then the hourly cost of developing an application will be significantly higher than in Asian countries.

Therefore, it is a good idea to outsource your project. It will help you save up to 60 percent of the total cost. Idea Usher can help you with this. Contact us for a free quote!

How to create an Online Marketplace like Etsy: Why Idea Usher is the #1 choice for developing an Etsy clone?

We have years of experience providing our customers with customized app development solutions. Our development team is experienced when it comes to building an online marketplace from the ground up.

A good UI is something that largely determines the success of a business. Users are likely to never return if they think the website or app is hard to navigate. We can help you with that.

Idea Usher has an expert team of developers and designers that will help you materialize your imagination and see that your business has a solid foundation. For free quotes, you can drop us a mail at [email protected] or use this link.


With the internet reaching more and more people every day, online marketplaces will only witness tremendous growth in the coming years. If you are committed to building such a website, make sure you do it the right way so you don’t get lost amongst the crowd.

We hope our guide on how to create an online marketplace like Etsy helped you better understand the segment. Even though giants like Alibaba and Amazon dominate the segment, it is still an excellent time to start your marketplace on the internet!


Can you estimate the total cost of developing something similar to Etsy?

The cost involved with any e-commerce platform entirely depends on the number of features you want. In case you are interested in developing similar to the lines of Etsy, it will cost you upwards of $25,000 (based on industry rates average.) However, Idea Usher can help you with an affordable package starting at 3000 USD.

Why does it so long to develop an app like Etsy?

Creating an online marketplace is a tedious process. It involves a lot of hard work, starting from planning and making sure it has no bugs no matter how big your business grows. The designing of the app, along with the wireframe and features, is one of the main parts of the app development process.

Also, if we create something as complex as Etsy, the testing and debugging need to be completely thorough. All of this takes a considerable amount of time. On average, it is safe to say that the entire process will take 3-4 months.

Is it a good idea to outsource software development projects?

Depending on where you live, it might be significantly cheaper to outsource your project. For example, you decide to outsource to North America. Then, the hourly charges are comparatively higher than that of South America and even Europe. Even Europe has this problem. Western European countries will take more money compared to nations like Ukraine. It might be a good idea to outsource to Idea Usher since we charge less than the competition!

Can I customize the features on my online marketplace?

Totally. Your creativity is something that matters to us a lot! After all, it is what will make your service stand apart from the competition. If you want to, you can also ask for same-day services, schedule your requirements in advance, and do much more if you decide to work with Idea Usher.

I am confused. What platform do I use when developing an online marketplace app?

You can opt for either a native app or a hybrid app. This depends on what features you want to provide. Then there is the option to choose between developing an Android or iOS app. You can also choose to create an app that works on both mobile operating systems.

Share this article
Contact Us
HR contact details
Follow us on
Idea Usher: Ushering the Innovation post

Idea Usher is a pioneering IT company with a definite set of services and solutions. We aim at providing impeccable services to our clients and establishing a reliable relationship.

Our Partners
Contact Us
Follow us on
Idea Usher: Ushering the Innovation post

Idea Usher is a pioneering IT company with a definite set of services and solutions. We aim at providing impeccable services to our clients and establishing a reliable relationship.

Our Partners
© Idea Usher. 2024 All rights reserved.