How to Build a Digital Products Marketplace – A Complete Guide

How to Build a Digital Products Marketplace – A Complete Guide

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Since the onset of the digital age, slowly and steadily, physical products around us have been turning into digital consumables, reaching users on a plethora of devices – that are an integral part of their lives.

From the early 2000s onwards, a lot changed in this regard – Audio Tapes/CDs evolved into digital audio files. eBooks came up as a convenient alternative to paperback books. Popular gaming titles for the popular gaming console – PlayStation (3) were for the first time offered as a digital download online (2007) in lieu of CDs. And so on.

While these developments are from a couple of decades ago, the growing popularity of Digital Art auction marketplaces is still relatively a recent development.

Moreover, as a continuously growing percentage of consumers, who have grown up in a Digital environment, start to take centre stage, more such developments are expected to follow.

Digital products, hence, present a significant business opportunity for the present and the future. Likewise, a digital products marketplace 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 the Digital products marketplace ecosystem – benefits of building one, popular players and niches, along with a process that you can follow to build a contemporary digital products platform.

What is a Digital Products Marketplace

Simply put, digital products are products that can be delivered electronically to users. For instance, Ebooks are popular digital products that can be shared or sold over the Internet.

Other examples of digital products include music, movies, software, online courses, digital art, e-magazines, digital newspapers, and more.

They are essentially intangible assets that are owned digitally by the consumers.

Digital products have transformed various industries and opened up new avenues for creators, freelancers, entrepreneurs, or businesses to generate revenue. A Digital Products Marketplace is simply a platform for these creators to sell their Digital products to an unhindered, geographically-unrestricted audience.

For instance, app stores, online marketplaces, and streaming platforms have been flourishing as central hubs for discovering, purchasing, and accessing a vast array of digital products.

Why Start with Digital Products Marketplace

There are several reasons why launching a digital products eCommerce marketplace can be a viable business strategy. Here are a few of the potential benefits:

Potential Benefits

Access to a growing market: Low barrier to entry is one of the biggest advantages for aspiring entrepreneurs. Digital products don’t warrant maintaining an inventory, so it is easier to onboard sellers on the marketplace.

Low overhead costs: In a digital marketplace, backend operations such as shipping are not required. So when compared to traditional retail models, launching a digital products marketplace can have 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: With no shipping operations involved, 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 no such complexities, as the ones that come with physical products, digital e-marketplaces are easier to scale. Likewise, expanding eCommerce operations globally is easier as well.

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. Thus, intellectual property protection is a consideration.

One solution to these challenges is building a secure and robust platform that is capable of resisting online attacks.

Alternatively, encrypted product license keys can further allow you to protect digital products offered on the platform.

Get Started with your Idea

Popular Digital Product Marketplace Niches

A niche marketplace offers a specific category of products, to better define its target audience and ergo, its marketing strategies. This helps in positioning the business distinctly in the market.

There are multiple niches in which a digital marketplace can model itself – to spawn a viable new business opportunity.

Some examples of niches possible in the industry are discussed below:

E-books (Digital Publishing)

As more people switch to digital devices – there is an increased preference for digital books. Naturally, there is an upsurge in their demand. An additional factor triggering their popularity is that ebooks require no paper and hence, are more environmentally friendly.

Images and Photographs

Digital photographs, especially stock photos – are needed across digital platforms. Hence a marketplace for stock photos can generate interest among users.


Videos for stock use, or online course websites, such as Udemy – present an attractive opportunity for new startup ideas.

Music and Sound Effects

This niche includes music tracks, sound effects, and other audio content. These digital products are required for both – personal and professional use.

Web Design Resources

As the internet witnesses an increasing adoption amongst both businesses and individuals, there is an ever-increasing need for web design resources – web templates, graphic templates, Fonts, logos, CMS themes, and others can be offered. Additionally, stock photos, videos, vector graphics, and other allied media can also be offered on the digital marketplace platform.

Software and Mobile Apps

With the increased use (and dependence) on digital devices in the modern era, there is a high demand for innovative apps and software solutions that solve problems or make life easier.

This includes productivity tools, entertainment apps, and other digital solutions.

Gaming and Entertainment

This niche includes downloadable video games, virtual reality experiences, and other digital entertainment.

Deal Coupons

A marketplace like Groupon, which offers deal coupons, has historically gained traction in various eCommerce markets.

Online Courses and Education Materials

e-learning platforms are booming since the pandemic catalyzing demand for courses on various topics such as programming, digital marketing, business, health, personal development, and more.

All resources such as books, guides, research papers, and others can be offered via a digital marketplace.

Vector Graphics and Digital Art

These elements find application in web design, marketing (both, via offline and online channels), and advertising. This includes logos, banners, illustrations, and infographics.

While these were some of the niches that can be explored in the digital products ecosystem, businesses can also follow a hybrid niche that encapsulates more than one of these products. For instance, it makes good business sense to include stock photos, videos, or audio in a web design resources marketplace.

In fact, popular operative marketplaces generally offer products from more than one niche. In the following section let’s read about the popular players in this eCommerce space.

Here are some of the more popular players in the digital products ecosystem.

Popular Players in the Digital Products Ecosystem


Envato is not one but an ecosystem of marketplaces that offer multiple digital products.

  • Envato Elements offers subscription-based graphic assets, educational resources, and business management tools.
  • Envato Market encapsulates multiple platforms offering a range of categories of creatives including ThemeForest for Web Themes & Templates; AudioJungle for Audio & Music; VideoHive for Video Templates & Stock Video; PhotoDune for Stock Photos; GraphicRiver for Graphic Fonts, Logos, Icons, Templates and more; CodeCanyon for Code Script Items, 3DOcean for 3D Print Models and CG Textures, and more.

Collectively, these creatives find wide-ranging applications for creative professionals, such as graphic designers, web developers, video editors, and other digital content creators.

To add to it, the marketplace also caters to hobbyists, beginners, and anyone else looking to improve their skills or create engaging content. Furthermore, the platform also has products and services for businesses, entrepreneurs, and other organizations that need digital marketing assets, and more.


Amazon has successfully ventured into and at times pioneered wide-ranging categories of products and services. This also includes digital products. They offer ebooks on the platform. Additionally, they offer exclusive platforms for video and audio streaming respectively.


Etsy has been a name synonymous with handmade and vintage items, but it also offers a selection of digital products – such as printables, graphics, invitations, cards, templates, and other creatives.


Pexels is a marketplace for digital photos that empowers designers, writers, artists, programmers, and other digital creators to source photos uploaded onto the website. The photos are provided by their community of photographers, and licensed under the Pexels License.


Also called Amazon of the East, Lazada is an Alibaba-owned popular eCommerce marketplace that primarily operates in 6 South East Asian countries. And similar to Amazon, Lazada has a digital products ecosystem within the marketplace. It offers top-up mobile and gaming credits; downloadable digital products like eBooks. Additionally, it is also a platform for deal vouchers – for deals on restaurants, travel, transport, entertainment, and more.


An online marketplace for designers, Dribbble provides a platform for designers to post their work. The target audience varies – including peers looking for inspiration, design companies’ repositories for their teams, and others. Additionally, it also serves as a portfolio for the creators to display/audition their work.


An online marketplace platform for a wide range of products – books, music, films, photography, gaming, and a lot more that even includes physical products. Typical target users for this platform include creators, just starting out with their trade. To assist them in their start the platform offers multiple tools. Furthermore, the platform offers creators to link their own website to the platform, to turn their own website into a storefront.

How Does a Digital Marketplace Work

For a deeper understanding of a Digital Products marketplace, let’s analyze how it operates and the revenue-earning opportunities within it.

Business Operations in Digital Products Marketplace

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

Roles of participants (primary) in a digital marketplace:

The Admin

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


In a multi-seller 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.

Take your Business to the next level with a Digital Products Marketplace

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.

Suggested Read: Exploring B2B, B2C, & C2C business models in multi-vendor marketplaces. 

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.


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.

Want to Tap into the Booming Digital Products Market?

Key Platform Functionalities 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 can 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 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 and 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 brand 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 audition 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.

Turn your Digital Product Ideas into a Lucrative 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.

Devise Platform Workflows and Functionalities

In the sections above, we discussed possible operative business models, revenue channels, and key eCommerce functionalities that can be followed for the digital products marketplace. With the data gathered in the market analysis, you can chalk out a platform strategy that can work best for your business.

Considering the products on offer, target audience, competitive landscape, expected business overheads, and the scope of your project – platform underpinnings and workflows can be determined. It is recommended that a lean approach is adopted, balancing both short and long-term business objectives.

Finally, Create Your 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 are considering leveraging their internal systems with the 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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