How to Build a Digital Products Marketplace – A Complete Guide

How to Build a Digital Products Marketplace – A Complete Guide

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Last Updated: 18th June, 2024

Since the onset of the digital age, slowly and steadily, physical products around us have been turning into digital consumables, reaching users on a profusion of devices. And as these devices become an inseparable part of human existence, so do such media.

Given their significance, both their consumption and creation has spurred a digital products industry, that continues to grow impressively at a CAGR of 10.61% riding on the widespread acceptance of its almost “godsend ally” – eCommerce.

Naturally, a digital products marketplace platform can give aspiring entrepreneurs realistic short-term gains in terms of revenue generation – while also allowing them to establish a brand that is ready for a future, brimming with the possibilities of accelerated digital product consumption.

In this blog, read all about how you can build a digital products marketplace with ease.

Compelling Business Advantage of a Digital Products Marketplace

There are several reasons why launching a digital marketplace platform can be a viable business strategy. Here are a few of the potential benefits that a digital products marketplace can give entrepreneurs planning to start such a business.

  • Access to a growing market: Leveraging a low barrier to entry, a Digital Products marketplace gives entrepreneurs quick access to a promising market, that is growing at an accelerated pace. 
  • Lower overhead costs: With no need for physical warehouses, an absence of backend retail processes like shipping – sustaining digital marketplace operations incur relatively low overhead costs.
  • Higher profit margins: With digital products, there are typically lesser production costs, which means that profit margins can be high. Moreover, exclusive products, that can attract higher prices, are easier to source.
  • Flexibility: A digital products marketplace can potentially operate from anywhere with an internet connection. This can give you the option to choose the location of the operations’ main office with greater flexibility.
  • Potential to scale and expand business operations globally: With lesser complexities, digital e-marketplaces are easier to scale.

However (Potential Challenges)…

A significant challenge that confronts digital marketplace startups is piracy.

  • Products that you offer on your marketplace may be offered parallelly through illegal pirated channels.
  • Products available on your marketplace can be pirated further.

Solution to the above challenges

Here are few methods to overcome the challenge mentioned above:

  • Building a secure and robust platform that is capable of resisting online attacks.
  • Intellectual property protection.
  • Encrypted product license keys can further allow you to protect digital products offered on the platform.

Launch a Robust Digital Product Marketplace Platform

How Does a Digital Product Marketplace Platform Work

For a deeper understanding, let’s analyze the operations and the revenue-earning opportunities in such platforms.

A digital marketplace platform works like a multi-seller eCommerce website. Participants, at a primary level, are Admin(s), Sellers, and Buyers.

Roles of participants (primary)

The Admin

Marketplace-owning authorities set up the digital marketplace platform infrastructure and assign Admin duties. The Admin manages backend operations in the marketplace.


In a multi-seller digital marketplace platform, third-party sellers participate in offering their products to be offered on the platform. This can be exclusively or in addition to the marketplace owners themselves.

The sellers sign up on the platform, set up their virtual storefronts (if there is availability for the same on the platform) and upload the products they want to sell.

While these are seller roles at a basic level, of their operations, there is a lot more to marketplace operations for sellers – data-driven analysis, shop promotions, advertisements, and more also give sellers further opportunities to purpose-driven their business on the platform for both immediate and long-term goals.


Buyers complete the transaction flow on the platform by browsing for listed products; comparing and evaluating products; and completing their journey by purchasing products.

Additionally, buyers may contribute to secondary activities such as user-generated content in the form of product reviews, answering peer queries, and more.

While these are the primary participants in an eCommerce marketplace, more contributors can be connected to the platform at a secondary level, participating in business generation activities, and more. For instance, Affiliates.

Popular Business Models Possible

As mentioned above, a digital products marketplace functions with 3 primary participants. The one thing that can vary, though, is the role of the sellers. And that can further depend upon the niche the marketplace operates in.

For products such as software, the marketplace sellers will be typically businesses. Such marketplace functions on the Business2Consumer model.

Conversely, for products such as creatives, a Peer2Peer business model is more suited, as sellers may include solopreneurs, freelancers, and other independent creators.

Revenue Generation Channels

Generally, a multi-vendor setup allows for multiple revenue streams. Let’s understand how Digital products marketplaces generate revenue on the platform.

Revenue Generation Channels


A commission fee can be charged for the sale of the products on the marketplace platform. This can further be done in two ways:

  • Sale of individual items.
  • Sale of bulk/bundled products. These bundles can be created as per themes, product series, or any other context that gives the users reasons to buy the bundle instead of individual products.

Listing Fees

Products listed on the platform can also be levied a fee. This fee may be one-time or recurring and can be in lieu of or in addition to the sale commissions.

Subscription Fee

The platform may choose to offer a subscription fee to the users. Generally, these are exclusively for the sellers. For the buyers, the subscription is popularly termed a membership fee. It typically entails additional benefits to the buyers.

Access Passes

Another way to model your revenue channels is by offering access passes. These work like prepaid vouchers that allow buyers access to products on the platform with preset conditions – tied to a number of days, downloads, download bandwidth and/or more. These can also be used to leverage events, festive season offers, webinars, or more.

Offer Advertising On Website Assets

The marketplace can offer the website assets like banners and others to the sellers to display relevant advertisements. A certain advertisement fee can be charged in lieu of the advertisement opportunity offered to the sellers.

While these are a number of ways in which revenue can be generated, using all of them may undermine the viability of the platform for the sellers. The marketplace business can prudently strategize the revenue streams that work best for the platform. The decision criteria normally hinge on the platform’s USP, target market, and the nature of the digital products being offered.

With an understanding of the working of a digital products marketplace let’s analyze some basic platform functionalities that can streamline platform roles for the admin and the users.

Create a Digital Product Marketplace with Multiple Revenue Streams

Essential Features for Digital Product Marketplace Platform to Achieve Desired Outcomes

eCommerce has come a long way since its inception – platform capabilities of established marketplaces like Amazon, and others have raised the bar in providing users with a purpose-driven experience.

Users are now accustomed to getting more out of their eCommerce experience. In fact, each time there is an update from these popular platforms, there is palpable anticipation of what to expect.

In such scenarios, getting the features right for your business will be a key consideration. Let’s understand, which eCommerce features are key to purpose-drive positive results in a digital products platform:

Multiple Revenue Channels Availability

For effectively tailoring your business in line with the products on offer, and market trends, you will need options for multiple revenue channels. Moreover, based on user response, this is one aspect that may need reconsideration as you move on.

Preview of Digital Files

In the current age, buyers like to make informed buying decisions. Product preview can help buyers to experience the product online, before making the purchase. The key to the long-term success of the business is satisfied customers, this is one step in ensuring that.

Offering Product Updates

Offering existing customers product updates can go a long way in building brand reputation. For instance, a sequel or extended copy of a popular ebook to customers who have already purchased will help foster brand loyalty. Additionally, monetizing these updates can also be considered to add revenue for the business.

Multilingual and Multicurrency Support

A digital marketplace platform is not constrained by limits of your shipping fulfilment reach, simply because there is no shipping involved! Hence, farsight warrants the need for multilingual support that allows users to browse the website in their own language. Likewise, support for multiple currencies that lets them pay in their own currency.

Extensive Marketing Features

Navigating competition, establishing the presence of the business, and building a distinct brand identity would underpin an effective marketing campaign. These campaigns are fueled by effective content, outreach, SEO, and other strategies. If the capabilities of the platform encapsulate result-driven marketing features, accordingly, the outcomes will be positive.

Advanced Search Capabilities

Digital product marketplaces can scale expeditiously due to low barrier entry for the sellers. Moreover, product definitions can be less precise for buyers to find, especially in P2P marketplaces. To navigate these challenges advanced search capabilities are a prerequisite for buyers to be able to find precisely what they are looking for.

Seller Capabilities

A P2P marketplace benefits by giving sellers capabilities to add their products effectively, sell efficiently and hence build their brand on the marketplace. This further allows the marketplace to onboard sellers easily and find their way around the chicken-egg conundrum in eCommerce. Features like separate seller storefronts, capabilities for detailed product listings, separate user panels and more allow sellers to achieve their desired objectives with a higher chance of success.

A Secure Ecosystem

System security is a challenge not exclusive to digital marketplaces but to eCommerce in general. Still, the chances of attacks are even higher as products here are in a digital format. Hence, the security of the system, payments, user data, and others are all primary concerns. A robust platform will therefore be detrimental to the long-term success of the business.

Build a Feature Rich Digital Product Marketplace

With a brief understanding of the operations and basic platform functionalities, let’s proceed further with some steps that can help in launching your own digital products marketplace.

Steps to Launch a Digital Products Marketplace

The following steps are brief of the process that needs to be followed. Each of these steps can methodically lead you to an action plan to launch a marketplace platform.

Market Analysis

Every successful endeavour is supported by precise purpose-driven planning. An extensive market analysis can give the requisite insights to tailor the business plan accordingly. The following inclusions can be part of the market analysis.

  • Identify your target market – finalising a sub-niche can yield favourable outcomes.
  • Gather data relating to the market.
  • Understand the competition in the domain – for instance, what do they offer and at what prices. Furthermore, analyze their USPs and the market strategies adopted by them.
  • Determine the user needs in the market. Users in a marketplace mean both the sellers and the buyers. The success of a marketplace depends on gaining traction with both the sellers and the buyers.
  • Define products to offer on the platform.
  • Identify any regulations, or legal compliances that may be required.
  • Pre-determine revenue channels and pricing strategies (commission rates, subscription packages, and others)

All work done at this stage can prove to be a launchpad for the platform. Data-driven insights help in navigating uncertainties and help in formulating robust market strategies.

Finally, Create Your Online Platform

Creating your eCommerce platform will confront you with a choice between two methods.

The first one is straightforward. Employ, or hire a dedicated team, and build the platform from the start. Alternatively, the whole process can be outsourced to a custom eCommerce development company.

While this can give more control over the development process, it can be more time-consuming and resource intensive. This process gains significance if the outcome includes extensive distinct requirements. For instance, enterprises that are considering leveraging their internal systems with the digital marketplace platform.

Unless that is the case, there is another way…

Just like key functionalities, platform underpinnings can be predetermined, and are the same for contemporary digital marketplaces – pre-built solutions can be used instead of the traditional process of custom building the entire eCommerce platform.

This is where readymade eCommerce marketplace builders for digital marketplaces come into the picture.

Depending upon the choice of the solution, certain readymade marketplace builders can be used to launch a digital marketplace in a matter of days!

And that is your second choice, leverage a turnkey solution to cut down on custom development process if desired outcomes don’t entail extensive personalization – to gain a competitive advantage of a less resource-intensive process with faster Go-To-Market time.

Leading turnkey eCommerce marketplace solutions for digital products, are also customizable and scalable, and allow future platform additions, if needed.

How can FATbit Help

FATbit Technologies is a leading software development company that leverages extensive domain expertise in the eCommerce ecosystem. It offers Agile eCommerce development services covering diverse niches across the eCommerce ecosystem.

Additionally, FATbit offers a readymade eCommerce marketplace solution, Yo!Kart, that can let you launch a digital marketplace straight out of the box.

Yo!Kart – Leading MultiVendor Marketplace Solution

Yo!Kart is an industry-leading self-hosted multi-vendor software that comes with a range of eCommerce functionalities that can power contemporary digital products marketplaces.

Furthermore, it offers multiple pre-built API and payment gateway integrations, essential modules, and more.

The customizable software is self-hosted and is offered in one-time payment packages. Yo!Kart has been used by clients globally to power platforms that include digital product marketplaces.

You can launch your own digital products marketplace in a matter of just a few days using Yo!Kart.

Regake – Yo!Kart-Powered Digital Products Marketplace

Regake is a digital products marketplace for gaming products powered by Yo!Kart. It functions in multiple countries and offers gaming enthusiasts access to the best games, which also includes some rare titles.

For achieving the goals, some customization was required to meet the client’s specific needs. Some additional enhancements were made to product handling, commission management, and more. The result is a global platform for gaming enthusiasts.

Wrapping Up

As eCommerce continues to transform digital sales channels – consumers are increasingly getting accustomed to eCommerce as the primary touch point for all their needs.

While the eCommerce industry has been on the rise for the past few years, starting with an online platform continues to be a favourable business proposition.

Also, future promises bode well with an expanding consumer base and a larger variety of products on offer.

Also as technology continues to advance, digital products are likely to evolve further, enabling immersive experiences through virtual and augmented reality. The digital product landscape continues to expand, offering boundless possibilities for innovation, convenience, and creative expression in our increasingly digital world.

That said, starting with a digital products marketplace is a lucrative opportunity to start with an eCommerce business with a low-barrier entry niche.

Using a rich-featured readymade solution like Yo!Kart, and following a data-driven methodical approach, you can set a launchpad for a sustainable market impact.

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