A comprehensive guide to building a multi-vendor e-commerce platform — vendor onboarding, product management, commission structures, split payments, and the architecture decisions that make or break multi-seller marketplaces.
What is a multi-vendor e-commerce platform? A multi-vendor e-commerce platform allows multiple independent sellers to list and sell products through a single storefront, with the platform operator managing the marketplace, processing payments, and taking a commission. Unlike single-seller e-commerce, multi-vendor platforms require vendor onboarding and management, split payment processing, per-vendor inventory tracking, commission calculation, and vendor-specific dashboards. Examples include Amazon Marketplace, Etsy, and industry-specific vertical marketplaces.
Let's set expectations upfront: building a multi-vendor e-commerce platform is one of the most complex web application projects you can take on.
It's not "regular e-commerce but with multiple sellers." It's a fundamentally different architecture — vendor management, split payments, per-vendor inventory, commission logic, multi-vendor order fulfilment, and a storefront that somehow makes shopping from 50 different sellers feel seamless. Every one of these adds a layer of complexity that compounds with the others.
We build these at Hunchbite. We've also talked clients out of building them when a simpler approach would work. This guide gives you the honest picture — what's involved, what it costs, and whether you actually need one.
Before you commit to this architecture, be honest about what you need.
You need multi-vendor if:
You probably don't need multi-vendor if:
If you're in the "probably don't need it" category, check our guides on Shopify vs. custom development and headless commerce for simpler alternatives.
Shared catalog: All vendors list products in a common catalog. If three vendors sell "iPhone 15 Pro Max," there's one product page with multiple sellers offering different prices and shipping options. Amazon does this.
Vendor-specific catalogs: Each vendor has their own product listings. Even if two vendors sell the same item, they're separate product pages. Etsy does this.
Our recommendation: Start with vendor-specific catalogs unless you're building a commodity marketplace where price comparison is the core value proposition. You can always migrate to a shared catalog later — going the other direction is much harder.
Centralised inventory: Products are stored in a central warehouse (or multiple warehouses you control). You handle fulfilment. Amazon FBA is this model.
Distributed inventory: Each vendor stores and ships their own products. Your platform facilitates the transaction but doesn't touch the physical goods.
Most multi-vendor platforms start distributed. Centralised fulfilment is a business model decision, not a technology decision — and it requires operational infrastructure that has nothing to do with software.
Your onboarding flow determines the quality of sellers on your platform. Build it carefully.
Application and verification:
Don't automate approvals from day one. When you're small, manually reviewing every seller and their initial listings is how you maintain quality. Automation comes when you're processing 50+ applications per week and have clear criteria for what passes.
Each vendor needs a dashboard that lets them manage their business. Essential features:
Build the simplest version of each. Vendors care about getting orders and getting paid — everything else is secondary.
As your platform grows, create tiers to reward good vendors and manage risk:
| Tier | Criteria | Benefits |
|---|---|---|
| New | Just joined | Standard commission, manual listing approval |
| Verified | 30+ orders, 4.5+ rating | Lower commission, faster listing approval |
| Premium | 200+ orders, 4.8+ rating | Lowest commission, auto-approved listings, featured placement |
This creates a flywheel: good sellers earn benefits, which drives more sales, which attracts more good sellers.
Design your product data model to handle vendor-specific attributes:
Search across a multi-vendor catalog is a solved problem — but you need dedicated search infrastructure. PostgreSQL full-text search works for small catalogs (under 10,000 products). Beyond that, use Meilisearch (open-source, fast, easy to set up) or Algolia (managed, more expensive, great developer experience).
Filters should include:
This is the financial engine of your platform. Get it wrong and you'll lose vendors, lose money, or both.
Stripe Connect is the standard for multi-vendor payment processing. The flow:
For multi-vendor orders (items from different sellers in one checkout), Stripe handles this through separate charges and transfers or destination charges. Each vendor receives their share independently.
| Model | How it works | Best for |
|---|---|---|
| Percentage | Platform takes 10–20% of each sale | General marketplaces, variable-price goods |
| Flat fee | Platform takes ₹50 per transaction | Low-value, high-frequency items |
| Tiered | Commission decreases as vendor volume increases | Incentivising high-volume sellers |
| Subscription | Vendors pay monthly fee for platform access + lower commission | Established platforms with clear value |
| Hybrid | Monthly fee + smaller percentage per transaction | Premium platforms, B2B marketplaces |
Start with a simple percentage. 15% is the most common starting point. You can introduce tiers and subscriptions once you have enough vendor volume to justify the complexity.
This is architecturally one of the trickiest parts. A customer adds items from three different vendors to their cart. At checkout:
Display this clearly to the customer. "Your order will arrive in 2 shipments" with per-vendor tracking is far better than a confusing single order status that doesn't reflect reality.
Multi-vendor returns are painful. The return goes to the vendor, not to you. Your platform needs:
Keep dispute resolution simple at first. A manual process handled by your support team scales to hundreds of orders per month. Build automation when you need it.
Medusa.js — Open-source headless commerce. Supports multi-vendor through plugins and custom development. Our go-to for e-commerce backends when custom logic is needed. See our headless commerce guide for details.
Sharetribe — Managed marketplace platform. Good for standard marketplace models, limited for complex e-commerce with inventory management.
Shopify multi-vendor apps — Apps like Multi Vendor Marketplace add multi-vendor functionality to Shopify. Works for simple cases, breaks down with complex commission logic or custom vendor dashboards.
CS-Cart Multi-Vendor — Dedicated multi-vendor e-commerce platform. Older, PHP-based, but feature-complete. Good if you want something out of the box and don't mind the tech stack.
Build custom when:
For many multi-vendor platforms, a hybrid approach works best: use Medusa.js as the commerce engine (products, orders, inventory, payments) and build custom vendor dashboards, onboarding flows, and storefront on top.
| Layer | Technology | Why |
|---|---|---|
| Frontend (storefront) | Next.js | SSR for SEO, fast page loads, great for e-commerce |
| Commerce engine | Medusa.js | Open-source, extensible, handles products/orders/payments |
| Vendor dashboard | Next.js or React | Separate application for vendor management |
| Admin dashboard | React Admin or custom | Platform operators manage vendors, commissions, disputes |
| Database | PostgreSQL | Relational data, strong consistency, handles complex queries |
| Search | Meilisearch | Fast product search across vendor catalogs |
| Payments | Stripe Connect | Multi-vendor payment splitting, vendor payouts |
| File storage | Cloudinary | Product images with automatic resizing and CDN |
| Hosting | Vercel (frontend) + Railway or AWS (backend) | Managed, scalable |
For B2B multi-vendor platforms with additional requirements like bulk ordering and customer-specific pricing, see our guide on building B2B e-commerce platforms.
Let's be direct. Multi-vendor e-commerce is one of the most expensive application types to build properly. Here's what it actually costs:
| Scope | Timeline | Cost (India, quality studio) |
|---|---|---|
| MVP (vendor onboarding, listings, basic storefront, payments, simple admin) | 12–16 weeks | ₹20–40 lakhs ($25K–$50K) |
| V1 (MVP + vendor dashboard, advanced search, multi-vendor cart, reviews, analytics) | 20–28 weeks | ₹40–80 lakhs ($50K–$100K) |
| Full platform (mobile apps, ML recommendations, advanced analytics, API marketplace, multi-currency) | 8–14 months | ₹80 lakhs–2 crore ($100K–$250K) |
Why it's expensive: You're building three products — a storefront for customers, a dashboard for vendors, and an admin panel for your team. Plus the commerce engine that connects them all. Each "product" has its own user flows, edge cases, and testing requirements.
If someone quotes you $10K for a multi-vendor e-commerce platform, they're either using a template they'll barely customise, or they don't understand the scope. Either way, you'll end up rebuilding it. For a detailed breakdown of web app costs, see our cost-to-build guide.
A marketplace with 500 low-quality vendors is worse than one with 20 excellent ones. Curate aggressively at the start. Quality creates trust. Trust drives transactions.
If listing products is painful, if the dashboard is confusing, if payouts are slow or opaque — your best vendors will leave and take their customers with them. Vendors are your supply. Treat their experience with the same care as the customer experience.
Don't reinvent payment processing, search, or image management. Use Stripe Connect, Meilisearch, and Cloudinary. Your custom value is in the business logic, not the infrastructure.
A multi-vendor platform isn't just software — it's a business that requires vendor support, dispute resolution, content moderation, and ongoing platform development. Budget for operations, not just the build.
Too high and vendors won't join. Too low and you can't sustain the business. Research your vertical, understand vendor margins, and set commissions that leave room for both sides to profit. Adjust based on data, not assumptions.
Building a multi-vendor e-commerce platform is a significant investment. Before you start:
If you're ready to build a multi-vendor platform — or need help deciding whether you should — let's have a conversation. We've built platforms using Medusa, custom backends, and hybrid architectures across e-commerce verticals. We'll give you an honest assessment of what your specific platform needs and what it'll cost.
If this guide resonated with your situation, let's talk. We offer a free 30-minute discovery call — no pitch, just honest advice on your specific project.
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