Ways to Structure Your eCommerce Marketplace in Magento

Ready to take the plunge and build an eCommerce marketplace, but not sure what technology is right for your business or how you’ll structure your storefront? I hear these questions quite often, especially now that businesses are increasingly relying on online sales.

While there are some full-feature, enterprise-level marketplace software options out there, you’d need a big team and close to $1 million in budget to make those work. They’re just not realistic for most businesses we talk to.

At the most basic level, the online marketplace—an eCommerce store that sells a wide variety of products from many merchants to customers—will need to include the following: 

  • A transaction engine;
  • A secure admin panel;
  • Segmentation;
  • Import/export tools, and; 
  • Potentially access to the code if there are any integrations that need to happen. 

We’ve found that Magento can support this setup and marketplace features—and at 10% of the cost of the enterprise marketplace software. I’ll share a few recent marketplaces we’ve built for clients in Magento based on how they’re structured. 

Do you need a single marketplace storefront or multiple stores?

There are two ways that most online marketplaces are structured: As a single marketplace storefront, or multiple stores that appear entirely separate but live within one infrastructure. 

Single store

Magento can be set up as a multi-brand marketplace, like a “super store” that carries many brands under one umbrella. Think of this as one large department store (that can support dropshipping). This has a big advantage in that it's one website—one domain—to drive traffic to through marketing efforts. 

Our client Ivyside set up their Magento marketplace this way so customers can shop a variety of CBD manufacturer’s products in a single store—shopping by category, by brand, and by health benefit.

screenshot of Ivyside's marketplace showing range of products

Separate stores inside one Magento infrastructure

Another way to structure your marketplace is to run multiple stores within a single Magento infrastructure and design. In this case, the marketplace is more like visiting a mall where there are many stores inside one location. 

For Jewett-Cameron, their main landing page shows four sub-stores—Lucky Dog, Fencing, True Shade, and Spring Gardener—that each reflect the parent site’s layout and branding. 

homepage of jewett-cameron's website

Key Magento Features for eCommerce Marketplaces

There are several key features in Magento that are relevant for eCommerce marketplaces:

  • Magento provides all of the necessary product catalog and catalog filtering (by brand, by topic), reviews/ratings, cart, payments, and accounts to serve the customer and manufacturer.
  • Magento multi-stores allow for multiple brand-specific stores to be created for each participating manufacturer (that all feed into a central order system).
  • Magento has Multi-Source Inventory (MSI) built into Magento Commerce. This allows you to maintain inventory and send orders to separate inventory sources.
  • One of the problems with very large marketplaces is helping customers easily find things. Mapping out the types of manufacturers and dealers who will be participating in your marketplace will help inform its information architecture. Magento has an integration with Amazon Web Services (AWS) Elasticsearch to help with deep product search.
  • You can organize inventory on the admin side by category, or using the B2B Magento features to associate a catalog/inventory to specific manufacturers. You can then use advanced role management in Magento to give access to specific inventory and admin features in the store.

When you have relationships with sellers in a specific industry (which often comes from being a retailer first), setting up your own eCommerce marketplace—and connecting manufacturers with your customers—can be an attractive option to consider for your business strategy. 

Dive deeper into online marketplace strategies.