Creating a booming marketplace on SHOPIFY

Creating a booming marketplace on SHOPIFY

We all know that ecommerce and online stores are growing at a fast rate, predicted to reach mega billions of dollars in the US by the end of 2022. We’re also aware that not even the pandemic has stopped this crazy exponential growth in the online shopping space. In fact, COVID-19 has ended up growing this virtual business world because we’ve all been in lockdown shopping online.

As we continue writing blogs to help you decipher some of the ecommerce tech-heavy topics, for this entry we tackle creating ‘marketplaces’ on Shopify.

What are online marketplaces?
Hosted online on Shopify, or the like, marketplaces are websites that allow customers to connect with multiple online retailers/vendors to solve issues, find solutions or products. For example, you may have a shower that leaks water because it only has half a screen door. To solve this problem, you need to research and purchase the right kind of water barrier. Good examples of marketplaces where you may find such a product include Shopify, Amazon, eBay or Gumtree.

Which online retailers benefit most from using online marketplaces?
Shopify marketplaces benefit online retailers who use Shopify Payments. However, in general all online retailers should be able to use at least some features on this platform. In the case of expansion stores, online retailers who are using or not using Shopify payments can benefit from this channel.


Traffic to your site will increase quickly

From the get-go of your marketplace make sure to plan super well for a probable traffic increase to your platform. In fact, you’ll soon be trying to find more and more retail partners to join your marketplace because of the increased customer demand. The key to success here is to find a good balance between meeting the demand and making sure to sign up the right number as well as choosing high quality retailers that fit into your stable and market vision. 

An opportunity to increase profits 

From the start of your online marketplace make sure to track your sales meticulously because it’s this type of accurate data that will inform targeted marketing of your products which in turn increase sale figures. Additionally, by joining in with a third-party platform providing comprehensive data reports, you will get even better profitability outcomes.

When it comes to collating international sales data, marketplaces hosted on Shopify can conveniently give a summary of sales per market. When using expansion stores, the Plus Admin Overview dashboard feature can show how well each local store is performing at that local level.

Diverse ways of earning income
Having a marketplace on Shopify will produce many ways to earn income. Featured listings and commissions are also good, all depending on the kind of business you have. If you are experienced, you can also look at combining single or multiple revenue streams.

Selling worldwide is made easy

If online businesses involve selling to countries globally, Shopify marketplaces are perfect because the platform converts currencies and translates to different languages. When converting to different monies, Shopify marketplaces, automatically rounds figures up or down. Retailers can also standardise prices in the Shopify admin area or by using CSVs. However, if online retailers have expansion stores, they will need to set prices for different areas and countries by hand. When it comes to languages, Shopify marketplaces can translate websites into around 20 or so languages. Tools like 3P apps can help business owners to translate into different languages via human power or computer programs. 

When having to set up multiple country domains, subdomains or subfolders with Shopify marketplaces, customers can be automatically redirected to the correct domain via an IP or a Geolocation app. If using expansion stores, again a 3P app will manage redirections but country selectors will need to be custom built. Noting subfolders do not work between expansion stores.

International SEO, with accurate SEO hreflang metatags and sitemaps, is automatically generated within marketplaces on Shopify. While this handy facility allows customers to easily identify the right domain to visit from a google search, retailers with expansion stores must operate SEO tags and so forth by hand. 

Whether you are using Shopify marketplaces or expanding stores a built-in duty and tax calculator will assist you in many ways including automatically adjusting tax requirements for each different area or country. 

Inventory management is not a problem

With an online marketplace you don’t have to track inventory as the onus is on your vendor partners. All you need to do is provide the platform to facilitate interactions between buyers and online sellers.

You are not competing with other vendors
You and your online retailers all want to sell well - the more customers, the better, right? So, by assisting your vendors with everything they need to sell successfully on your marketplace, it’s a win-win for all. Also, by providing this support to your vendors, you’ll reduce your own marketing expenses

Online marketplaces are perfect because they connect customers, with a particular issue, to multiple retail sellers with the right solution. For example, as mentioned previously, a customer who needs to find a certain water barrier for their leaking shower.


While it can be physically easier, it’s worth mentioning marketplaces can be more technically complex than straight ecommerce online store sites because they involve multiple vendors. Having different players can mean that payment and shipping processes, timely customer support and commissions can also become complicated.

Integrating new vendors can be tricky
To have a thriving marketplace that effortlessly integrates products and inventory data from your group of online retailers into your own ecommerce store is a must. To try and do this without an up-to-date product catalogue can end up causing tension. A way of keeping product inventory clean and mean is to take note of all product changes happening across all product lines for all online retail partners. For example, if your vendor has new colours of a certain material, note it down. Or if a name or size changes for a product make sure to be across the edits. If you aren’t keeping track, you may lose customers to another more accurate marketplace. 

Monitoring pricing changes/discounts can be time consuming
Keeping an eye on pricing across your online markets can take forever. However, it must be done because customers do not enjoy being overcharged. While percentage discounts are all good with Shopify marketplaces, fixed price discounts cannot be customised (per market). When using expansion stores, discounts will need to be inputted by hand and synced between all your online retailer stores.

Third party apps/channels
When using apps with Shopify marketplaces you don’t have to copy them, noting many 3P apps do not support some features available on this platform. When managing apps for expansion stores most apps generally work because this channel only uses one language, one currency and one price at the one time.

Restrictions with pay processes
Paying your loyal online vendors with the right commission and on time is crucial. If you get it wrong, you may the run the risk of them jumping to another marketplace. This can happen especially after they have their best to fit in with your criteria. Automating payments to your online retailers is the way to go, and it will also reduce delayed payments and errors. With Shopify marketplace pay outs can happen in just in one currency. When using expansion stores with international business partners, they have the option of signing up to a local Shopify Payment (SP) account. 

Payment methods have limitations
While Shopify marketplaces and other expansion stores facilitate key local payment methods for Europe, built in payment processes (except PayPal, Shop Pay, Apple Pay, Google Pay, credit cards and local payment methods) can only be processed in local currencies. However, with expansion stores some local payments can be completed by using regional providers.

Managing orders should be automated
With an online marketing managing orders can be such an onerous task because you don’t own all the different inventory or products lines. But it is a must to make sure you have the products customers are ordering and so forth. The only way to keep tracking information and to keep it accurate is to automate these processes.

Here in the blog, I’m noting that while some of the above issues can be a real headache, many can be sorted with Flxpoint automation. If you find setting this up difficult, don’t forget to ask your Shopify partner to assist you to put this in place. To read more click here.


Apps that marketplaces use
The apps listed below are the ones that marketplaces on Shopify ‘generally’ use, with both managed by you. 

    • Online retailer channel app: This is a sales channel app that online retailers use to upload/publish products to a marketplace.
  • Customer-facing app: This is an app that decides how products are displayed and how buyers are guided through purchasing journey when visiting an online marketplace. 

    Marketplace multiple players are:

      • Shopify: The platform that houses online stores including (marketing, full purchase journey and sale systems and so forth).
  • Online retail partners: They sell products or services through the Shopify platform.
    • Customers: They purchase products from Shopify online retailers via a marketplace.
    • Partners: They are the developers who assist in building marketplaces on your Shopify online store.


      • Standing: Shopify has been around for a few years now; long enough to get a good reputation. It is recognised as an ecommerce front-runner, especially for retailers who are not particularly techy when it comes to setting up their business online. With more and more people choosing Shopify, the platform has gained kudos and with this comes ongoing improvements to the platform’s functionality and better tools to deal with annoying glitches and so forth. 
      • Specialists: Shopify specialises in ecommerce and assisting online retailers to easily set up successful online stores, including marketplaces.
      • Reasonable cost: Online retailers, that already know what they want and need it yesterday, know they can develop and build an online store/marketplace cost-efficiently on Shopify. 
      • Extra suite of apps/tools: Shopify offers marketplaces a variety of apps/tools in design, inventory, SEO and integration plus so much more. 
  • Simplicity: Marketplaces are more complex because of all the participants involved. However, on Shopify it is still easier to do this compared with other platforms. There are also plenty of Shopify partners to assist retailers when it all gets a bit too techy. Click here to read about our services in this area. 


    Use a Shopify’s Marketplace Kit

    To integrate a marketplace with Shopify, make sure to use the Shopify’s Marketplace Kit. It includes a selection of APIs and instructions/documents/components to explain how. This selection can fast-track the process of developing your marketplace as well as linking your online store and customers to thousands of other Shopify online retailers and the products they are selling.

    How does a marketplace kit do its thing?
    The kit uses a channel app that Shopify vendors can develop to connect Shopify online retailers to a platform. The channel app is then easily set up in ‘Shopify admin’ by the online store owner. Here, products are uploaded/published from the online store to the channel app, the app then surfaces these products onto the platform. Soon enough your platform will have different online retailers uploading and publishing their products to the app as well as customers purchasing these offerings. When this happens, the marketplace is all go! To view a visual diagram of this process, click here.

    Rules around channel apps when building a marketplace
    When you have your Shopify channel apps make sure to send them in for approval to the Shopify app review team. Click here for more detail on this process.

    The rules for the channel apps are:

    • Apps need to remain current with the most recent API and other element changes.
    • Apps need to communicate vital information to your marketing online retailers in a timely manner. For example, the earlier you let your vendors know they need to change the way they are uploading and publishing their products to the app, the better. 

    User Experience (UX) rules
    The marketplace kit has tutorials to show you how to code the frontend of your marketplace. This kind of coding will customise your marketplace design to devices like mobiles and laptops.

    In the Shopify admin space, you will see that each channel app will have its own iframe. So, make sure to align the channel apps’ web pages and elements with the overall UX that Shopify is providing. 

    Click here to get the full tech instructions on how to use the Marketplace Shopify Kit.

    If you are new to this process and need a Shopify Partner to lend a helping hand, don’t forget we are here to help with our many years of Shopify knowledge, click here


    Market specific features 

    • Content and content pages: Content remains synced across all online stores within Shopify marketplaces, but when it comes to using expansion stores, content edits for different stores will need to be completed by hand. Noting when manually inputting changes store by store having full control over these is made easy. 
    • Product catalogues: Many online merchants will choose Shopify marketplaces if catalogues don’t differ too much per market. However, when using expansion markets, a 3P app will need to be used for any inventory edits between stores, or they can be entered manually. Using an app or making changes by hand makes having different product catalogues per online store easier.

    Staff managements

    Staff permissions: Setting up an online marketplace is great because it generally means not having to hire extra staff and rent a large warehouse to store products. When it comes to issuing staff accesses on Shopify marketplaces only one set of staff accesses can happen per online store. Additionally, if a marketplace is selling internationally access controls can’t be customised per different country. For expansion stores the business owner can exercise full control over staff accesses to different market admins where they have various staff for different areas and regions.