Amazon, the global leader in e-commerce and multi-vendor marketplace models, has not only fundamentally changed how businesses sell; it has also fully disrupted how customers shop. Its recipe for success? Most will name a robust infrastructure, a seamless user experience, its seller-friendly platform, and even AI-driven recommendations. And they’re right, but the true magic happens when all of those key elements work in concert.

So, what does it take to build a marketplace website like Amazon? If it were easy, everyone would be doing it, but all good things take hard work. Whether you’re a startup looking to create a multi-vendor e-commerce website or an established business exploring expansion into marketplace solutions, this article will provide insights to help you start building your Amazon-like platform.

Understanding Online Marketplaces & Amazon’s Business Model

To say that the global commerce sphere has not been the same since the online marketplace model made its splash would be an understatement. Businesses can now connect buyers and sellers on a single platform without needing to maintain inventory. In the particular case of Amazon, online shopping was redefined by offering a seamless buyer experience.

In 2023, online marketplaces accounted for over 60% of global e-commerce sales, with platforms like Amazon, Alibaba, and eBay dominating the space. To add fuel to the fire, in 2024, retail e-commerce sales were estimated to exceed 4.1 trillion U.S. dollars worldwide.

Choosing the Right Online Marketplace Model

Amazon has largely defined the B2C space, leveraging economies of scale, algorithmic recommendations, and fast fulfillment to dominate consumer retail. Meanwhile, Alibaba has made B2B marketplace trade a global force, with businesses using its platform to source manufacturers and wholesale goods. And C2C platforms like Etsy have carved out their own niches, thriving on community-driven commerce and specialized product categories.

Let’s see each model in detail:

Amazon’s Marketplace Business Model

At the heart of Amazon’s marketplace dominance is its hybrid structure. Unlike traditional retailers that rely solely on in-house inventory, Amazon combines first-party retail with a thriving third-party seller ecosystem. This model has proven immensely profitable with third-party sellers accounting for over 60% of Amazon’s total sales, which is a dramatic shift from the company’s early years as a direct seller. The advantages of this approach are clear: by allowing independent businesses to list their products, Amazon expands its catalog exponentially without carrying the full cost and risk of inventory management.

Let’s talk about how Amazon makes money.

• Commission Fees on Sales: Amazon charges 8%-45% commission, depending on product category.
• Fulfillment & Logistics Fees (FBA): Sellers pay for storage, packing, and shipping, giving Amazon a major logistics advantage.
• Subscription Revenue (Amazon Prime & Seller Plans): Amazon’s Prime Membership model generates over $35 billion annually, while seller subscription plans allow businesses to scale.
• Advertising Revenue: Amazon’s Sponsored Products & Amazon Ads made $46.9 billion in ad revenue in 2023, competing with Google and Meta in digital advertising.
• Cloud Services (AWS): Amazon Web Services powers businesses, governments, and developers worldwide, contributing $90.7 billion in revenue in 2024.

Now that we understand where they get the money from, let’s list its success factors.

• Scalability & Vendor Ecosystem – With over 9.7 million sellers worldwide, Amazon benefits from an expanding product catalog and diverse inventory.
• AI & Personalization – Amazon’s AI-driven recommendations increase conversion rates by 35%, making shopping highly targeted.
• Customer Trust & Brand Loyalty – Amazon Prime has over 200 million subscribers, increasing repeat purchases and customer retention.
• Seamless Logistics & Fulfillment – FBA enables fast shipping, reducing barriers for sellers while improving customer experience.

Core Features of an Online Marketplace Like Amazon

As we’ve established, building an online marketplace like Amazon isn’t for the faint of heart. The endeavor requires more than just a functional e-commerce website. In fact, we think of online marketplaces as complex ecosystems that must work harmoniously, to connect buyers and sellers. All while ensuring trust, efficiency, and scalability.

So, what are those core features that drive engagement and revenue for Amazon? We categorize these into three primary categories: buyer experience, seller tools, and platform administration.

Creating a Seamless Buyer Experience

Frictionless shopping experiences, the stuff of dreams. Consumers expect fast, personalized, and secure transactions, which is why Amazon invests heavily in the following capabilities.

AI-Powered Search & Personalization

Amazon processes over 2 billion product searches per month, providing highly relevant search results. The platform’s AI-driven recommendation engine, powered by machine learning algorithms, contributes to 35% of its total revenue by tailoring product suggestions based on user behavior.

How to implement this feature:

• Develop an intelligent search engine that understands keywords, filters, and user intent.
• Incorporate AI-powered recommendation systems to personalize search results.
• Enable voice search capabilities to accommodate evolving user behavior.

Amazon’s “Customers Who Bought This Also Bought” feature dynamically recommends products based on previous purchases, increasing cross-selling and average order value (AOV).

Transparent Reviews & Social Proof

Trust is one of the most critical components of an online marketplace. Studies show that 93% of consumers read reviews before making a purchase, and products with at least 50+ reviews are more likely to convert.

How to build trust in your marketplace:

• Implement a verified buyer review system to prevent fake reviews.
• Allow customers to upload images and videos to enhance credibility.
• Include a Q&A section where buyers can interact with sellers before purchasing.

Amazon’s “Verified Purchase” badge ensures that reviews come from actual customers, increasing credibility and reducing fraudulent feedback.

Secure & Fast Checkout Experience

Consumers expect one-click convenience, and Amazon has perfected the frictionless checkout process. Cart abandonment rates drop significantly when buyers can seamlessly add payment details, select delivery options, and complete purchases with minimal steps.

How to optimize checkout for higher conversions:

• Enable one-click checkout for returning users.
• Offer multiple payment options (credit cards, digital wallets, Buy Now Pay Later).
• Provide real-time order tracking and automated updates.

Amazon’s One-Click Ordering technology has significantly reduced checkout time, leading to higher conversion rates and repeat purchases.

Empowering Sellers with Robust Tools

Amazon’s seller ecosystem is one of its strongest competitive advantages, offering tools that help merchants maximize sales while reducing operational friction.

User-Friendly Seller Dashboards & Inventory Management

Amazon’s Seller Central portal provides businesses with real-time insights into sales performance, inventory levels, and customer analytics. This helps sellers make data-driven decisions that optimize product listings and stock availability.

Essential Features for Sellers:

• A comprehensive dashboard with real-time sales, revenue, and customer behavior analytics.
• AI-powered dynamic pricing tools that adjust prices based on competitor activity.
• Automated inventory alerts to prevent stockouts and overselling.
• Amazon’s Fulfilled by Amazon dashboard allows sellers to track logistics, fulfillment status, and performance metrics, streamlining the selling experience.

Advertising & Promotions for Increased Visibility

Amazon reached a new milestone in 2024, exceeding $56 billion from sponsored ads, display, and video advertising, with Sponsored Product Ads driving higher seller conversions.

How they boost seller visibility:

• Offer pay-per-click (PPC) advertising options for sellers.
• Allow businesses to create discount campaigns, coupons, and loyalty programs.
• Provide SEO-driven product recommendations to help sellers optimize listings.

Amazon’s Sponsored Products program allows sellers to bid on keywords, increasing product visibility in search results and leading to higher conversion rates.

Building a Scalable & Secure Marketplace Infrastructure

A well-functioning marketplace requires a strong backend infrastructure that can handle high transaction volumes, secure user data, and automate key business processes.

Best Practices for Secure Payments:

• Implement PCI-DSS-compliant payment gateways.
• Use AI-based fraud detection to prevent suspicious activity.
• Provide multi-currency and localized payment options for international users.

Multi-Channel Customer Support

Amazon sets the gold standard for customer service, offering 24/7 support, live chat, and AI-driven chatbots to resolve issues quickly.

Amazon’s AI-powered chatbots handle 50% of customer queries, reducing wait times and improving user satisfaction.

Next, let’s proceed with what you’re here for: how to actually build a winning Amazon-like online marketplace.

Best Practices on How to Build an Online Marketplace Like Amazon

Like any massive undertaking, creating an online marketplace that resembles what Amazon did with their homerun platform requires thoughtful planning, the right technology stack, a strategic approach to scalability, and, well, more. Analytics, AI, omnichannel experiences, you name it.

Amazon’s success is far from accidental or a stroke of luck. It is built on a foundation of logistics efficiency, customer-centricity, AI, seller trust, and continuous user experience optimization. However, while Amazon is a giant, businesses like yours looking to enter the multi-vendor marketplace space can still find opportunities by focusing on specific niches, unique selling points, and modern e-commerce trends.

Here are the essential best practices businesses need to develop, launch, and scale their marketplace successfully.

Defining a Sustainable Business Model

Before diving into development, businesses need to choose a marketplace model that aligns with their target audience and revenue goals. The dominant models include:

• Commission-based: The marketplace takes a percentage of each sale, making it the most popular and scalable approach. Amazon, eBay, and Airbnb use this model. In this model, sellers list their products for free, but the platform deducts a commission on each sale, depending on the product category. This business model works best for B2C and C2C marketplaces, where volume and price competition drive growth.
• Subscription-based: Sellers or buyers pay a membership fee for access to the marketplace or enhanced features. Marketplaces offer premium services for buyers within this business model, for example, Amazon Prime feature.
• Freemium and ad-supported: Basic listings are free, but sellers can pay for premium placement and advertising. Marketplaces with a large seller base and competitive categories opt for this model.

Truly, Amazon’s business model is a masterclass in diversification. For instance, they use both a commission-based model that allows them to operate with minimal inventory risk, shifting the burden to third-party sellers while still maintaining control over the shopping experience, and paid premium features like Amazon Prime. In 2023 alone, Amazon’s third-party seller services brought in over $140 billion, proving that a multi-faceted monetization approach is key to success.

Choosing the Right Technology Stack

Amazon, as one of the most sophisticated e-commerce platforms out there, has invested heavily in a cloud-based, AI-driven architecture that processes millions of transactions per day while maintaining low latency, high availability, and top-tier security. The front end of a marketplace should prioritize speed, responsiveness, and mobile-first design, as more than 72% of online shopping now occurs on mobile devices.

The choice of technology stack will determine how efficiently the platform performs, how easy it is to maintain, and how well it integrates with modern tools.

Essential Components of a Marketplace Tech Stack

Frontend: The part of the marketplace users interact with, requiring a fast, responsive, and intuitive experience. Recommended frontend technologies:

• React.js: Preferred by Amazon, Facebook, and Netflix for fast-loading, interactive interfaces.
• Vue.js: Lightweight and beginner-friendly, great for scalable marketplaces.
• Angular: Best for large-scale applications needing complex frontend frameworks.

Backend and databases: The core engine that processes transactions, manages users, and connects buyers with sellers:

• Node.js: Handles high-volume requests efficiently, used by Amazon, Uber, and LinkedIn.
• Python (Django): Ideal for AI-driven marketplaces requiring deep analytics and automation.
• Ruby on Rails: Fast and secure for MVP (Minimum Viable Product) development.
• PostgreSQL: Supports complex queries and AI-driven analytics.
• MongoDB: Flexible and great for storing large amounts of user-generated data.
• Elasticsearch: Enables real-time product searches with near-instant query speeds.

Hosting and cloud services: Determines scalability, security, and performance across global markets.

• AWS: The industry leader in scalability, AI integrations, and security.
• Google Cloud Platform (GCP): Great for AI-driven insights and big data processing.
• Microsoft Azure: Ideal for enterprise-grade security and compliance needs.
• Cloudflare or AWS CloudFront ensures faster page loads across global markets.

Security: A marketplace is highly vulnerable to fraud, requiring bank-level security measures to protect sellers and buyers. Essential security features include:

• PCI DSS Compliance: Ensures payment security for credit card transactions.
• Multi-Factor Authentication (MFA): Prevents unauthorized access.
• AI-Driven Fraud Detection: Flags suspicious transactions in real time.

Leveraging AI & Automation to Improve Customer Experiences

Amazon’s AI-driven systems anticipate customer needs and optimize logistics. Here’s how:

Inventory and logistics management: AI predicts demand, preventing stockouts and overstock situations. Amazon’s robotic warehouses process orders up to 75% faster than traditional fulfillment centers, improving delivery times.

Fraud detection and risk management: AI scans millions of transactions per day, flagging suspicious activity in real time. In 2023, Amazon blocked 200 million fake reviews and fraudulent accounts using AI-powered fraud detection systems

Capitalizing on Data Analytics

Amazon collects massive amounts of data on buyer behavior, seller trends, and marketplace operations. They might as well put it to good use. Here’s what they do:

• Customer behavior analytics: Tracking click-through rates, abandoned carts, and browsing history to refine UX and boost conversions.
• Seller performance insights: Providing sellers with real-time dashboards to analyze sales trends, inventory turnover, and ad performance.
• Predictive analytics for demand forecasting: Using machine learning to anticipate product demand and optimize stock levels, reducing logistics costs and improving fulfillment rates.
• Customer lifetime value (CLV) analysis: Identifying high-value customers and retargeting them with personalized deals and loyalty programs.

Prioritizing Omnichannel Experiences

Truly, who’s buying on Amazon from a single device? The modern e-commerce landscape is no longer limited to desktop browsing and traditional online stores, even though Gen Z makes fun of Millennials feeling safer about purchasing desktops or laptops.

Frequently, consumers now shop across multiple touchpoints, including mobile apps, social media platforms, smart devices, and even voice assistants.

For example, social media commerce allows for direct purchases within social media feeds (like Instagram), shoppable live streams, and AI-driven retargeting ads to re-engage shoppers who browsed but didn’t purchase.

Voice commerce and AI assistants offer a variety of options to shop seamlessly: voice search for product discovery ("Find me running shoes under $50") and one-click voice purchases using saved payment credentials.

As a result, businesses looking to build an Amazon-like marketplace must focus on delivering a seamless omnichannel experience that delivers consistent shopping experiences and removes barriers between devices.

The Truth Behind Launching a Successful Amazon-like Online Marketplace

Is Amazon’s success a thing of luck?

As established throughout this blog, it is the strategic combination of technology, rich user experiences, and data-backed decision-making. With e-commerce marketplaces projected to reach $9.3 trillion by 2027, there is still ample opportunity for businesses to carve out their niche and disrupt traditional retail models.

How to get there? Well, we’re “let’s not beat around the bush” type of people, so here’s what you’ll need:

• A scalable business model that aligns with revenue goals and seller incentives.
• A robust technology stack with AI-powered personalization and fraud detection.
• A well-thought-out UX design.
• A strategy to leverage AI and automation to improve customer experiences.
• An approach to capitalize on data analytics.
• A strong prioritization of omnichannel experiences.

Sounds like a lot? Worry not! This is where Svitla Systems comes in.

As a trusted technology partner, Svitla Systems specializes in developing high-performance e-commerce platforms, marketplace automation, AI-driven personalization, and secure cloud-based architectures. Get in touch to get a free consultation and discuss your business idea.