How to Generate Income From Your WordPress Website: Part 2 – Build a Marketplace

The complete guide on how to build a multi vendor marketplace with WordPress and WooCommerce and start making money.
Monetize Wordpress Site Marketplace

Continuing the “WordPress Monetization Tips” series, we’re back with our part 2. Previously we covered the topic how to make money with your WordPress blog by selling ads space, sponsored content and using affiliate links, but that’s not the only way you can utilize WordPress to build a successful business model.

Today we are going to take a look at creating a Multi Vendor Marketplace site as a new revenue stream.

Multi Vendor Marketplaces are a huge trend in the last 3 years. According to a recent research by Statista, e-commerce retail sales in 2019 hit the staggering mark of nearly 3.5 trillion dollars on annual basis and that number is expected to grow even further. That accounts for almost 14% of total global retails sales. Prognoses show outrageous numbers in the 4.8 trillion dollars range to be reached in just 2 years.

Ecommerce Global Share

Graphic by Statista

Having that in mind, it doesn’t come as a surprise that a huge number of visioners and aspiring entrepreneurs invest in business models like dropshipping and multi-vendor markets as options for opening online stores. As a multi-vendor marketplace owner, you can *easily make money by selling products without touching a single piece of inventory, without packing a single box.

Your only job is to connect sellers and buyers. It may sounds too good to be true, but in reality, sites like Etsy, Amazon, eBay, Craigslist or Envato are doing it every day for many years.

Online retail is exploding. There are hundreds  of millions online buyers in the U.S. alone, spending an average of $1,500 per year. Large multi-vendor markets like eBay or Amazon carry many different products, but they don’t sell anything on their own. They profit by serving both parties – buyers and sellers in different niches, providing a platform to sell products that consumers are searching for.

Even small business owners can generate a considerable profit by starting their own multi-vendor market and connect buyers and sellers for niche products.

Here are some basics questions to answer that’d help you decide if a multi vendor store is the right business model for you or not.

What’s a Multi-Vendor Marketplace?

An online multi-vendor marketplace is a website that allows third-party vendors (sellers) who provide products and services while the site owner manages the website and marketing. Customers buy the products on the marketplace and the owner gets a listing fee, subscription fee or fixed commission from every sale the vendors make.

Multi Vendor Marketplace Listings

Multi-vendor marketplaces are beneficial for both owners and sellers. Owners don’t have to find products to sell or deal with shipping and inventory, while vendors don’t have to build, market and maintain a website. Vendors can focus on providing best quality goods and owners can focus on building their brand.

Types of Multi-Vendor Marketplaces

One of the strengths of multi-vendor marketplaces is their flexibility. You can shape them into almost anything you want. For example, Etsy is a niche marketplace that connects artisans and handmade goods producers to businesses and individual customers. Craigslist is an established marketplace for classified ads. Amazon is a third-party retail host.

All these are marketplaces that give vendors an opportunity to trade in their products and services.

Marketplaces are also separated by the types of goods sold. Giant marketplaces like AliExpress sell everything from earrings to heavy machinery. Other marketplaces focus on niche markets like handmade goods or digital assets.

General Marketplaces vs. Niche Marketplaces

Running a niche marketplace requires bigger time investment to search and attract quality vendors than running a general retail marketplace. However, niche marketplaces make marketing easier, because engaging a highly targeted audience is not as hard or expensive. Customers looking for specialty items are easier to engage and convert (more likely to buy).

General retail marketplaces on the other hand, have a potential to generate bigger income, because of the large range of goods they provide. The marketing efforts required are much, much bigger, though and budget needs can grow drastically.

Running Multi-Vendor Store Pros and Cons

Multi Vendor Marketplace Pros And Cons

While creating a multi vendor marketplace is relatively easy, it’s definitely not simple. You can’t just launch a new e-commerce website and hope for vendors to hop over one another trying to set up shop with you.

Although it gives you freedom with less management obligations, convincing people to sell on your platform is not always easy, especially on competitive market niches.

Store Management

Managing a multi-vendor marketplace is a totally different game than selling your own products. Instead of managing the success of one line of products, you’re now in charge of many different ones. You’re opening your retail space to many different labels. If one of them fails, your whole site’s reputation goes down.

The good thing about that is as a multi-vendor marketplace owner, you no longer have to order, ship, and stock products yourself. Your vendors take care of that. You have fewer day-to-day store tasks to complete and more time to focus on the cool stuff – optimizing your marketing strategy and technology base.

Product Variety

One of the marketplace administration tasks you’ll have as store manager is approving products for sale on your site. Even though vendors bring the products to you, you’ll still need to review and approve them.

Low quality products will affect your consumer reviews, marketplace reputation and your sales in the long run. If you run a niche marketplace for handmade products for example, you don’t want a vendor selling mass produced plastic bead bracelets.

Although you have more product oversight duties, you can actually offer many different goods without really having to have them in stock on your own. This provides you the opportunity to offer customers a much wider variety of items and brands using vendors than if you were doing it by yourself.


As a multi vendor marketplace owner, you get paid a commission for every sale or some kind of listing/subscription fee to cover the costs of running and managing the website. If you already have a well developed online store, not only you get a new revenue stream, but you can also benefit from the increased traffic and continue selling your own merch right alongside the other vendors.

Multi Vendor Marketplace Fees

However, keep in mind that you will need to invest considerable amount of time and some money before getting your marketplace operational. This process is moderately easy and affordable with the right prep work – choosing the best e-commerce platform, multi-vendor plugin, and website hosting service.

Before You Even Start

There are some important factors to take into account when starting your multi-vendor marketplace. While it can be tempting to base your choices on immediate needs, or the most obvious route to take, make sure you’re also looking to the future development of your store.

With this business model you can’t just start and hope to adapt to situation.

You’d need a plan for every step and have a backup plan if anything goes not as expected.

Believe it or not, there will be a lot of moments like this.

It’s easy to get started but hard to change later, so do your research, start with a strong foundation and build your e-commerce startup from there.

  • Find a prospective niche
  • Study the market for your niche and evaluate the growth potential
  • Find prospective potential vendors and try to understand their specific needs
  • Plan the creation of your website in details
  • Decide on the revenue model that suits you best – commission, listing fee, subscription fee, VIP listings fee etc.

What’s the Best Multi Vendor Platform for You?

The ease of use and flexibility are the most important things to look for in any e-commerce solution and the multi vendor business is no different.

Open-source platforms like WordPress are built with flexibility, integration, scalability and customization in mind. Combined with the power of WooCommerce (an e-commerce platform based on WordPress and currently owned by them) they form a powerful e-commerce system that can be shaped into almost anything you need.

Built-in features like store management, shipping and payment gateways + the ever growing plugins and addons base make this tandem unbeatable when it comes to building a website with small budget and less or no experience.

Woocommerce Seo Mistakes

Of course nothing beats professionally built dedicated solutions, but can you imagine the price for creating a site like Etsy from scratch? It’s measured in hundreds of thousands and it takes months (even years) to build such a website!

Your multi vendor platform speed, flexibility and reliability will affect the quality and number of vendors you can attract, so it also affects you and your business model.

If you choose to go the WordPress way (or already have a well developed WordPress website), there are some other factors to asses.

Choose the Best WordPress Hosting

eCommerce websites are quite demanding when it comes to hosting quality and server resources. While running a blog on cheap shared hosting is doable (still not recommended, though), for a full fledged e-commerce solution you’d need a better foundation. Even small shops with couple of hundreds of products can suffer from exhausted server resources on shared hosting, but running a real marketplace would be simply impossible.

Your site will often suffer from sever outages due to CPU and memory overuse, there are inodes limits you’ll surpass and what not.

For such a project, we recommend using at least a low tier managed VPS or Cloud Hosting.

Find a Multi Vendor Plugin That Suits Your Specific Needs

There are many multi vendor marketplace plugins available both free and premium. Most of them are actually utilizing the “Freemium” model – you get the basic version for free and only pay for PRO version or addons if you need advanced functionality.

For a small startup in most cases the free version would be a good enough option and you can upgrade any time you need.

Which plugin to choose would strongly depend on your specific needs. While most of them offer almost the same basic features, there are significant differences too. Those would be the payment gateways compatibility, premium themes availability, presence of *usable front-end product manager for your vendors etc.

We can’t pick the best one, but here is our list of the 3 major players worth considering:

All of them offer a basic FREE version. Dokan and WC Vendors have their premium PRO versions for advanced functionality and WC Vendors is module based platform, so you purchase different addons if you wish.

Another reason we think these are the best options is the fact that there are a huge communities around them, so you can easily find plugins and third-party extensions.

Choose The Best Multi Vendor WooCommerce Theme For Your Store

Again, which one is the best is something we can’t tell, as that would depend on your project’s specific needs, but there are some general rules to follow:

Choose a theme which design fits your niche – e.g. the Zass theme looks great for handmade goods

Find a theme that offers seamless integration with your plugin. While most plugins are built following certain standards, so they work even on free themes, the best multi vendor marketplace theme would also offer special additional features like plugin specific controls, specially made vendor shop layouts and custom built shortcodes.

How Much Should You Charge Your Vendors?

Multi Vendor Marketplace Revenue

We already discussed the different revenue models like commissions, subscription fee, listing fee, featured offers etc. As a marketplace owner, you’ll charge a fee, which should be high enough to cover your expenses and also make a profit, but also be low enough to attract vendors. If you cut too deep into your vendors pockets, you’ll discourage them from selling on your store.

Most marketplace owners have a flat percentage fee. Some of them like Envato for example offer different seller levels – the more you sell, the smaller the commission you pay.

As a new entity on this arena you should start with lower rates. However, if you already have a well developed niche store, you can afford bigger commissions, as your vendors would be willing to pay for your website marketing level and overall reputation. Most multi vendor plugins offer the functionality to set custom commission on per vendor bases, so you can offer better conditions for bigger vendors which presence adds more value to your store.

You can start with a standard fee (10-15%), or search for similar marketplaces in your niche and see what they’re charging vendors. However, do not forget to assess your expenses, and base your rates on that, so it turns profitable at the end.

The Challenge

That’s one of the most important aspects. Of course, your vendors bring you the products, but you still need to set rules for your business relationship.

For example: Who will approve products on your site? Most multi vendor plugins allows you to set auto approval for new products, but that’s too risky. What if you spend a considerable amount of time and money to build your store reputation and they upload something of low quality, something inappropriate or even illegal?

On the other hand, if you do it all, you’ll have to budget the time, so that’s one more thing to consider. You can use some form of trusted sellers model or invitation based shop, but that would limit your options and growth potential, so choose wise.

You also need to decide who will track and manage your stock. Customers can’t buy a listed item if it’s not available. Your sellers are expected to make sure products are ready for purchase, but not every vendor is as motivated as you’d like them to be. Some of them are even leaving sold products listed in order to drive search traffic for their other items.

Again, you have to find the right balance between product control, buyers satisfaction and time/cost management.


Multi-vendor marketplaces are a great way to monetize your WordPress website, as it offer site owners and vendors an opportunity to divide responsibilities and benefit together. However, in order to succeed in the long run, your main concern should be buyer satisfaction which can only be achieved by quality content and reasonable offers. In the end, it’s the customer’s experience that will make or break your store, and attracting a group of highly motivated, quality vendors for your customers is one of the best ways to make profit from your WordPress website.

Share your thoughts and everything you believe we missed in the comments bellow

About the Author:

Dimitar Koev is a graphic and web designer, front-end developer and marketing expert. CEO & founder of the Althemist team (previously known as Koev) - an independent envato market author, focused on building WordPress themes with strong e-commerce accent.

One thought on “How to Generate Income From Your WordPress Website: Part 2 – Build a Marketplace

  • Mike CentorelliJuly 12, 2019 at 5:15 pm

    Wow! This is by far the best and most realistic post about creating a multi vendor site. It’s so nice to see you including so many of the challenges one would face when do it properly. Thanks Althemist for offering your information with so many details.


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