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Guide to Create an Online Marketplace Like Etsy

Krunal Shah

Apr 25, 2022

8 min readLast Updated Dec 05, 2022

It’s been a while since the online marketplaces for the creators and artists have been gaining traction. There are several reasons why such online marketplaces are high in demand such as proper utilization of the artists’ or crafters’ talents, availability of a diverse range of creative products, and comfort of shopping from home, to name a few. For instance, one such leading marketplace Etsy has taken the spotlight with the rising demand for handmade and vintage products. No wonder the revenue of Etsy surpassed $560 million in the first quarter of 2022 itself.

While the global online marketplaces sector value is over $140 billion, the emergence of online marketplaces like Etsy is making the competition even stricter. However, this sector being highly lucrative, it is the right time to create a similar marketplace to make the most out of it.

There are several concerns related to this - exactly how to create a website like Etsy, how to implement Etsy's community-building features, how Etsy's business model works, and many more. Well, in this blog we will answer all your queries while guiding you through how to create an online marketplace like Etsy.

What Is Etsy?

Before we delve deeper, let’s have some basic ideas on the Etsy business model and Etsy online marketplace. Etsy is a leading online marketplace that is focused on handmade crafted products of diverse categories such as home decor, apparel, jewelry, and others. What makes it unique and stand out from the crowd of the other online marketplaces is that it offers crafted and vintage products curated by various artists and professionals.

This American e-commerce company was founded on 18th June 2005 and has witnessed quite an impressive growth since that time. Not only does it offer a very broad category of creative products for various segments of end-users, but also gives opportunities to the artists, creators, and people with the relevant skills.

Apart from selling such vintage and artistic products, it also offers the materials to create such products. Statistics say that there are nearly 4.36 million active sellers and 81.9 million active buyers on this online marketplace as of 2022, due to this unique Etsy business model.

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The Popularity of Etsy Business Model: What’s the Deal?

Etsy or personal website - the debate has transformed into that one question - how to create a website like Etsy. Before we come to that point, let’s discuss why it’s so popular.

Unique Products

One of the prime reasons behind Etsy’s popularity is - that they offer a wide range of unique products. Toys, clothing, accessories, home decor items, crafts, and other collectibles - these all come with their very own unique designs created by various artists. Not only due to their looks and feel, but they are highly popular among people with eyes for handmade creations and arts.

More Focused On Creativity

Etsy has made it much easier to craft and sell your products. Equipped with an easy signup process, transparent rules, and simple to understand Etsy business model, it is paving new paths for artists and creators all around the globe. Moreover, many buyers are also getting inspired to utilize their own skills to create and sell products through this marketplace.

P2P Commerce

A lot of people prefer the idea of getting in touch with the creators. As the Etsy business model is based on P2P commerce, one can get the facility of personal communication instead of communicating via customer care or support executives.

Etsy Community Building Features

Etsy community building features make it even more sought after by letting like-minded people come together, share & exchange ideas, and grow all together. This is not only applicable to the artists, but also to the art lovers as well as buyers.

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Steps to Create a Website Like Etsy

Now that you have a clear idea of the Etsy business model and the reasons behind Etsy’s high demand, let’s walk you through the steps for how to create a website like Etsy.

Business Planning

First of all, you need to create a well-defined plan for your business. You need to have a transparent idea about every tiny detail to succeed. Here are a few pointers you must include while doing the business planning.

  • What will be the core focus of your business or which will be the main categories of the products?
  • Whether it will be both buyer and seller centric like Etsy, or do you want to customize the Etsy model?
  • What is your overall budget, available resources including human resources to start and run the business?
  • What is your expertise/ niche area? Whether that will help you in building your business?
  • What is the overall goal of your business? For instance, it can be simply creating a marketplace for buying and selling crafted products, or it can have some other goals like inspiring women to start their businesses, and so on.
  • Whether the products will only include handmade products or general branded products like other marketplaces and others. Having a complete business plan from the beginning will help you start and grow your business easily.

Research & Analysis

This is an unskippable step while creating your online marketplace like Etsy. Be it the Etsy business model, Easy community-building features, or more - knowing about only a single marketplace won’t suffice. You will need a good idea of the overall present market, competition, and other factors and will need to analyze them to go ahead. If you are wondering where to start, here’s a list of the pointers to include in this stage.

Competition Analysis

While Etsy is one of its kind of marketplace, it’s not exactly alone in the market. There are several online marketplaces that give tough competition to Etsy such as Wix, Shopify, Zibbet, Big Cartel, and many more. You must do a thorough analysis of all the leading competitors' positions, growth scope, profit & revenue graphs, business and monetization models, and forecasts. This will help you know better where you stand and what to achieve in the near future.

Target Audience Analysis

It is a good practice to create a buyer persona, and list out their requirements, behavioral patterns, demand-supply graphs, and other related factors. This will help you cater to your audience more efficiently.

Furthermore, you can also segment your target audience on several factors such as age group, profession, location, past buying history, and others and plan accordingly. Serving your customers right should be one of your key goals as customer experience is crucial for such an online marketplace.

Global & Regional Market Analysis

Global, as well as regional market analysis, is pivotal to creating an online marketplace with the Etsy business model. Unless you know what market are you targeting/operating on, what’s its size, value, and past & future graphs, it will be next to impossible to succeed. Also, having a clear knowledge of the present market and future forecasts will help you set realistic targets to grab the low-hanging opportunities, secure a certain market value for your own business, and optimize the regional key drivers for your business growth.

Designing UI/UX of the Website/App

Once you are done with the planning and analysis, now start the technical part of designing your product - an app or website. Even though you want to know how to create a website like Etsy, we recommend you launch both an app and a website to target an even larger audience base. Most people love to shop and browse through their mobiles and unless you develop an app too, you can miss out on a big opportunity.

UI and UX both are interrelated. To get started, you must focus on the psychological aspects to build the UX of your app/website. On the other hand, the UI must be simple, catchy, comprehensible, and unique at the same time. Most importantly, it should immediately convey what your app/website is about to the visitors to minimize the bounce rate. You can take the help of professional UI and UX designers to crack it like a pro.

Development & Testing

This is most probably the lengthiest as well as vital stage to follow while building an online marketplace similar to the Etsy business model. It is always the best idea to opt for professional development and testing services unless you have proper expertise in it.

Either you can choose to hire freelancers with the required experience or go for professional service providers for better security and high-quality end products. However, in either of the cases, ensure that first the MVP (Minimum Viable Product) is built. It will bypass a lot of unnecessary work, and resources wastage and most importantly will help in launching a successful app or website for your online marketplace.

Also, you need to have the basic knowledge of the relevant tech stacks to create a website with features similar to Etsy community building features and the overall Etsy business model. Here are a few tech stack suggestions that work well -

Tech Stack for Front End Development: Rect, Angular, Vue

Tech Stack for Back End Development: Laravel, Node.JS, Symfony, and others

Tech Stack for Mobile: React Native, ionic, Cordova


No matter how good your online marketplace is, without proper marketing all your effort will be in vain. Always start marketing much before your product launch to build audience awareness, brand identity, and the much-needed hype.

Target diverse platforms and communication channels including social media like Facebook, Instagram, and others. You must explore the different types of marketing such as email marketing, content marketing, social media marketing, and others.

You can create and run various campaigns as well as target specific audiences for personalized marketing for optimized results. Marketing is a continuous practice to be maintained throughout and not just for the beginning phase of your business.

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Cost of Creating a Marketplace Like Etsy

There is no rule of thumb to determine the cost to create an online marketplace with a business model like the Etsy business model. But there are several factors to consider that can help you reduce the cost.

App Features

An online marketplace is mainly focused on the products, prices, quality, and only a handful of core services. So, it will be wise to keep the app or website features/solutions minimal. Any additional and redundant features will not only increase the development, testing, and maintenance costs but may confuse the end-users or website/app visitors.

Technologies Used

The technologies you use to build a product have a lot to do with determining its cost. Especially, if you are targeting diverse ecosystems like Android, iOS, and others and various devices/platforms, it is recommended to use cross-device and cross-platform compatible technologies. In this way, you will be able to target several platforms at a lower cost.

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The Bottom Line

Building an online marketplace like Etsy or with a business model similar to Etsy's business model is quite challenging. As this industry is highly dynamic, with a lot of leading competitors, it is crucial to follow the right steps to launch and grow your business. The above guide will help you start in the proper way and secure your position in the market gradually.

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