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How to Create a Physical Product Marketplace Like Etsy (on WordPress)

TL;DR: “WordPress and eCommerce”? Who would have guessed just 5 years ago that this would be a viable possibility. Surely not anyone in my university class. Nevertheless, we’re here. And WordPress is now perfectly capable of handling an eCommerce business of any type, basically. So to check the extent of that, we’re looking into the topic of creating a physical product marketplace like Etsy … all on WordPress. Here’s Colin’s take on the topic and his exact step-by-step process:

Looking to jump on the multi-vendor marketplace train? If so, creating a physical product marketplace like Etsy is one great way to do just that. Best of all, this can be done with WordPress.

As of 2016, Etsy had over 1.6 million sellers with $677 million in gross merchandise sales in the third quarter of 2016 alone. That’s a lot of vendors looking for help to sell a ton of merchandise!

physical product marketplace like Etsy

But you’re probably under the impression that multi-vendor marketplaces must be expensive. I mean, Etsy has a huge team of developers working for them…you’ll have to spend thousands of dollars to create something similar, right?

Not really! In response to the popularity of online marketplaces, a number of multi-vendor marketplace tools have popped up. That means you no longer need to break the bank on a custom solution if you want a marketplace like Etsy.

In fact, you can get started for less than a hundred dollars using WordPress, WooCommerce and a plugin called WC Vendors.

Here’s how to get that done exactly:

How to create a physical product marketplace like Etsy on WordPress:

First, what is WC Vendors and how does it help us do what we want to do?

WC Vendors is a freemium plugin that extends WooCommerce’s functionality to turn it into a physical product marketplace like Etsy. I settled on WC Vendors for this tutorial because:

  • It’s designed for physical products.
  • The free version is powerful enough to get started (though you’ll absolutely want the premium version for the most user-friendly marketplace).
  • It includes essential features like easy commission payments, front-end product submissions for store owners (only in premium), and more.
  • The premium version includes a dedicated theme to take advantage of all of WC Vendors’ functionality.

Because WC Vendors leverages the power of WordPress, all you need to use it is:

  • A domain and hosting (more info)
  • A working instance of WordPress
  • A theme (or the theme included with WC Vendors premium)
  • WC Vendors + WooCommerce

Here’s exactly how you can set up a physical product marketplace like Etsy using WC Vendors and WooCommerce:

Step 1: Pick your hosting

With a blog, you might be able to skate by with less-than-stellar hosting (though it’s still never a good idea). But with a multi-vendor eCommerce store, you can’t skimp on hosting.

Akamai surveyed eCommerce consumers and found a few conclusions that merit an extra focus on page load times for eCommerce stores:

And it’s not just Akamai’s data in play here. Other studies have consistently found that slower page load times mean fewer conversions for eCommerce. For example, Intuit found that every second shaved off the page’s load time equals to a 1% increase in conversion rate or more! This is huge.

For every second of performance gain:
Original load time Load time change Conversion change
Above 7s -1s +3%
Between 5-7s -1s +2%
Below 4s -1s +1%

So, if you want your multi-vendor marketplace to be successful, start with quality hosting. Because no matter how much you optimize your site, hosting is still key for supersonic page load speeds.

At this point, if you’re a regular here, you know exactly which companies we recommend in terms of hosting. If not, check this out – the results of our survey. In short:

  • To get started, SiteGround will give you a great balance of speed and affordability. For the money, it has the best performance of any affordable hosting.
  • As your marketplace grows, you might want to consider upgrading to a premium host like Kinsta. Here’s our review of Kinsta.

Step 2: Install a theme, WooCommerce and WC Vendors

Once you’ve got your hosting and domain set up, it’s time to make a WordPress website. In order to do this, just install WordPress, choose a theme, and start rounding up the necessary plugins.

If you don’t want to splurge on a premium theme quite yet, you can start off with a free WooCommerce theme. For this tutorial, I’ll use the free version of our own ShopIsle. But feel free to use whichever WooCommerce-focused theme tickles your fancy.


Once you’ve got your theme installed and activated, you need to install WC Vendors and WooCommerce. It’s essential that you install both because WC Vendors needs WooCommerce in order to function properly.

Install WooCommerce first and go through the setup wizard.

WooCommerce setup wizard

Then, go ahead and install WC Vendors. If you’re starting with the free version, you can install it directly from the WordPress dashboard.

Of course, there are a number of other general WordPress tweaks you should make, but I’m going to focus on just the multi-vendor marketplace functionality in this tutorial.

Step 3: Configure WC Vendors

Okay, this step is important. It’s where you’ll set up details like commission rates, vendor registration, and payment details.

Get started by heading to WooCommerce → WC Vendors.

3.1: General settings

On the General Tab, make sure to set up the default commission rate that you want to offer to vendors:

How to create a physical product marketplace like etsy

You can set custom commission rates for individual products later on, but this will be the default rate initially applied to all products.

You should also set up your registration options here. If you don’t want to manually approve vendor applications, you can disable it. But I wouldn’t recommend it. You don’t want your marketplace ruined by spam users.

You also need to configure how you want to handle the money you collect for taxes and shipping. Basically, you’re choosing whether you keep those payments or they go to the vendor.

Further down the page, you can configure the URL slug for your vendor pages as well as some other style options. It’s fine to leave these as the defaults, though.

3.2: Products

On the Products tab, you’ll choose which fields are available to your vendors when they create a new product. For example, if you don’t want your vendors to be able to create virtual or downloadable product types, you should check those boxes to hide them:

Because you’re creating a physical product marketplace like Etsy, you’ll likely want to hide a number of these fields to streamline the product creation process for vendors.

These fields are good for regular WooCommerce stores, but you probably don’t want your vendors to be able to group products or set custom taxes.

3.3: Capabilities

The Capabilities tab lets you set up the permissions that your vendors will have.

For the Orders and Reports options, I recommend you leave all of the options checked (the default).

The important option here is Products. It lets you decide whether or not the products submitted by your vendors require manual admin approval before they’re displayed. Further, you can also decide whether or not vendors are allowed to edit products after they’ve gone live.

I think the defaults are a good place to start, but if you’re planning to run a huge multi-vendor marketplace, you may not be able to manually approve each product.

3.4: Pages

The Pages tab is simple. It just lets you choose which pages you want to use to display your vendor interface. WC Vendors creates most of the necessary pages automatically, but if you want to customize their names/URLs, you can do that here:

Again, it’s fine to leave these as their defaults.

3.5: Payments

The Payments tab is important. It’s where you’ll set up PayPal Adaptive Payments. PayPal Adaptive Payments lets you instantly divvy up your payments and pay commissions automatically.

If you need help, you can follow WC Vendors’ detailed guide. And if you pay for a premium extension, you can also use Stripe to similarly automatically split up payments.

In addition to setting up adaptive payments, you also need to choose your payment schedule.

You can choose to pay vendors immediately (potentially dangerous for chargebacks), or set up a daily, weekly, biweekly, monthly, or manual schedule.

Note – you can’t do both. So if you want to pay vendors on a schedule, make sure to uncheck the Instant pay box.

Step 4: Enable account registration in WooCommerce

WC Vendors gives you multi-vendor functionality, but only if WooCommerce allows it! So to allow vendors to actually register for your marketplace, you need to go to WooCommerce → Settings → Accounts and tick the Enable registration on the “My Account” page:

Now, vendors should be able to register on the My Account page. It will use the same interface as regular users, but add a little Apply to become a vendor checkbox:

This is also the point where you may need to apply a little custom CSS. Depending on how your theme renders the registration form, you may want to change its style. If you pay for the premium version of the plugin, you can just use WC Vendors dedicated theme to avoid needing to use custom CSS.

Step 5: Make sure vendor accounts work properly

You’re actually mostly finished now! Your physical product marketplace should be functioning, but it’s a good idea to create a test vendor account to make sure everything is working.

Once you create your dummy vendor account, you’ll need to hop over to your admin account and approve the vendor account by going to the Users tab. Just change the user role from Pending Vendor to Vendor:

If you disabled manual approval, you can skip this step.

Once approved, you should be able to see your Vendor Dashboard in your test vendor account:

Again, depending on the theme you chose, you might need to add some custom CSS styling to pretty up your vendor dashboard. Or, this is another reason you might want to just use the premium WC Vendors theme.

On the shop settings page, vendors can add their PayPal email address, choose a shop name, and add a description:

In the free version, vendors can only add products using the normal backend WooCommerce interface. But if you pay for the premium version, you’ll be able to create front-end product submission forms.

And once a vendor creates an approved product, shoppers will be able to view it on the front-end:

Checking commissions and viewing reports

To see how your physical product marketplace is doing, you can grab reports in two areas.

First, going to WooCommerce → Commissions will give you all of the individual commissions that your marketplace has generated. You can sort by individual vendors as well as the status of the commission (due, paid, or reversed):

You can also view more detailed stats by going to WooCommerce → Reports → WC Vendors:

Similarly, your vendors will also be able to view orders and commissions, as well as mark products as shipped:

Reasons to purchase the pro version of WC Vendors

While you can set up a physical product marketplace like Etsy for free using WC Vendors, if you’re serious about your marketplace, you should go with the premium version.

  • It will give your vendors a much better experience.
  • Vendors get more detailed storefronts and front-end submissions.
  • They can also generate their own coupons.

Because your vendors are the backbone of the store, you want to keep them happy.

Additionally, the pro version allows you to charge more commission types. Whereas the free version only allows you to charge a flat percentage, the pro version lets you combine flat fees and percentages. For example, you can mimic Etsy’s fee structure of $.20 flat rate + 3.5%.

It also comes with that dedicated theme I mentioned. So you won’t need custom CSS to make your vendor pages look beautiful.

And you can even implement an eBay-style feedback system for vendors, which is important for building trust.

So, get your feet wet with the free version, but if you want to create a truly functional multi-vendor marketplace, you should consider purchasing the pro version for $199.

And that’s it! WordPress and WC Vendors make it easy to build a physical product marketplace like Etsy. If you have any questions about the process, leave them in the comments below and I’ll try to help out.

Don’t forget to join our crash course on speeding up your WordPress site. Learn more below:


Layout, presentation and editing by Karol K.

Yay! 🎉 You made it to the end of the article!
Colin Newcomer

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Sam Rizzi
March 27, 2017 6:10 pm

good read colin. thanks!

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