Carro: Buy or Build a Marketplace on Shopify?

Taran Soodan
Taran Soodan
Carro: Buy or Build a Marketplace on Shopify?

Marketplaces have become one of the most popular ways for Shopify stores to grow, dramatically increasing the number of products and brands available and boosting sales and revenue. According to Forrester, marketplace sales now make up more than 63% of all online transactions and are on track to make up nearly 70% of all online transactions by the end of 2022. 

With such an ample opportunity, Shopify stores should leverage marketplaces as a growth channel. 

But for some stores, it's unclear whether they should build it themselves or work with pre-established software like Carro. Building a marketplace is possible, but it's not always a good idea. Choosing to do it yourself can significantly impact your financials, and maintaining it is even more work. 

If you're not sure whether to build or buy your marketplace platform, there are four essential things you should think about:

In this post, we'll look at why you shouldn’t build marketplace software and should leverage software like Carro. 

But we’re going to be clear: you should use a solution like Carro to build a marketplace for your Shopify store. The truth is that most Shopify stores don't have the time or money to build their own marketplace. The amount of time, money, and labor needed to build a custom marketplace for your Shopify store takes months to complete and likely costs 7 figures.

How your Shopify store benefits from marketplaces

Part of the appeal of Amazon is that customers can go there to buy almost any product they want. Amazon has legendary retention rates, and they’re one of the biggest brands in the world. We’re not saying your Shopify store will be the next Amazon if you create a marketplace for your store, but it’s a great way to drive sustainable growth in the long run.

But for Shopify stores, building your own marketplace is expensive and time-consuming. The time and money needed to create hundreds of SKUs are nearly impossible. You also have to factor in warehousing space, inventory, logistics, labor, and subject matter expertise from developers who can build the marketplace, which results in ridiculously high costs.

With VCs pulling back on D2C investments, only the top 1% of Shopify stores have the resources needed to create a marketplace. So using a marketplace solution that already has the features and brands you want to partner with results in getting results much faster. 

How marketplaces work on Shopify

A marketplace platform makes it easy to find sellers, bring them on board, integrate them, and help them grow. At its core, a marketplace platform makes it easy to find new brands to sell their products on your store and vice versa. We like to call it Cross-Selling as both the brand and their partners create a win-win situation for their customers.

Some of the things your marketplace platform should be able to do for your Shopify store include:

Why you should use marketplace software

Marketplace solutions will get your Shopify marketplace up and running as quickly as possible.

Depending on the solution you choose, you may be able to get your marketplace up and running within hours.

Adding new products is easy

With your marketplace solution, you don’t want an Amazon-like FBA experience. Having your partners send their inventory to you results in lots of wasted time and takes up valuable inventory space. Instead, you should focus on having a “virtual inventory.” Your partners will continue to fulfill orders themselves, saving you both time and money. 

It won't take long to add the right products for your target audience. This will give your Shopify store a unique feel. A good company that offers a marketplace solution will give you a lot of support to help you get set up.

When building your Shopify store’s marketplace, a marketplace solution is better than other options because you can predict the costs from the start. No costs can be a surprise because developers did work outside what they originally quoted when building your own marketplace.

When you use a marketplace solution, you usually pay monthly, so the cost is spread out and easy to handle, and you know what to expect. There are no enormous costs upfront to worry about. You won't have to worry about hosting costs if you choose to use a marketplace solution.

You should research and compare the price ranges of different Shopify marketplace solutions to see which one gives you the most value when you factor in the level of features and customization that will work for your store.

Less risk

A marketplace solution is also a good idea because it’s low risk. Most of the time, you don't have to sign up for these services for a long time, so you can try them out for a while and see how they work for your business.

Marketplace solutions also take care of the software that runs your marketplace for you. Imagine that you run a Shopify store that relies heavily on subscriptions.

Software that isn't kept up-to-date could eventually start acting up, making it hard for people to renew their subscriptions or even slowing down (the bane of every ecommerce business). This leads to higher bounce rates, fewer sales, and upset customers.

Software maintenance is essential for marketplace performance because it keeps the core of your business running smoothly. And it keeps customers happy!

Some things that are part of software maintenance are:

You won't have to worry about hiring Shopify developers to take care of software maintenance and make regular software updates with marketplace solutions. In the long run, this saves time and money.

New features

‍Marketplace solutions will keep the software for your Shopify marketplace up to date. Since the software is always getting better, buying a marketplace solution is also a good idea because the company you choose will be in charge of keeping the marketplace software up to date.

Most of the time, you can also ask for new features. Do your homework to find out which marketplace companies put a lot of money into adding new features and improving their systems. This will vary from company to company. Ask them what features they've added in the last six months.

Marketplace solutions let you change your Shopify marketplace to fit your customers' needs. Even though a marketplace solution may not let you customize it as much as building your online marketplace platform, you can still change it in ways that give you many of the features and customizations you want.

Why you should use Carro to build your Shopify marketplace

Here are the reasons why you should leverage Carro if you want to build a marketplace for your Shopify store.

Get discovered by customers from other brands

With Carro’s focus on Cross-Store Selling, your products become part of a highly-curated marketplace, but unlike Amazon’s bloated SKUs, your products are much more likely to be seen. Use Carro to connect with other brands to co-market each others’ products to create a win-win situation. 

"In addition to a nice contribution to the bottom line, it was also one of the most highly-engaged social posts for the year." 

David Krimper, Director of Ecommerce, Manduka

Fulfillment is handled for you

The beauty of Cross-Store Selling is that you don’t have to house the products for other brands in your warehouses. Orders are automatically sent to the brands so they can handle fulfillment themselves. 

“Before we joined Carro, we had put our company on the market. We thought we needed capital to expand our traditional wholesaling. Now, we’re able to meet our goals without having any cash come out of pocket. We’re tripling and quadrupling the numbers of units that we move because we have access to so much more inventory.”

Amy Richardson-Golia, June & January

Grow AOV, LTV, and retention

One of the most exciting reasons to use Carro is that it’s the best strategy for growing your Shopify business in the long run. By working collaboratively with other brands, your brand will set itself up for success. Your Shopify store will become THE destination for your niche. If you sell beauty products, Cross-Store Selling allows you to grow your product listings so your customers keep coming back for more. 

One of the best reasons to shop on Amazon is convenience. Being able to buy everything you need in one place is a powerful motivator. Wouldn’t you love it if your Shopify store was the go-to place for your customers’ needs?

"Take my word for it, if you install Carro, you are going to see what I’ve seen. Which is a dramatic increase to average order value, especially on orders that contain Carro products, which for us is over 80% increase to AOV. " 

Ryan Pamplin, Founder & CEO of Blendjet


To sum it up, Cross-Store Selling is the future of Shopify. Cross-Store Selling presents an opportunity to grow your Shopify store without having to spend millions on inventory or ads to keep up with the competition.

To learn more about how Carro can help your Shopify store grow, check us out on the Shopify App Store

Install Carro

to discover your

future partners.

Install on