Building a Multi-Vendor Marketplace: Technical Architecture and Challenges

Multi-vendor marketplaces like Daraz, Chaldal, and global platforms such as Amazon and Etsy have redefined e-commerce by connecting multiple sellers with buyers on a single platform. Building a marketplace is significantly more complex than a single-seller store — it requires managing multiple stakeholders, complex financial flows, and sophisticated dispute resolution. This article examines the technical architecture decisions and engineering challenges behind successful marketplace platforms.

Core Architecture Decisions

Marketplace platforms require a multi-tenant architecture where each vendor operates as a semi-independent entity within the platform. The critical architectural decision is the level of isolation between vendors. Full database isolation (separate schemas or databases per vendor) offers maximum data security but increases operational complexity. Shared-table multi-tenancy with tenant ID columns is simpler but requires rigorous access control to prevent data leakage between vendors.

For most marketplaces in the Bangladeshi context, a hybrid approach works best: shared infrastructure for common platform features (search, checkout, user accounts) with logically isolated data for vendor-specific operations (product catalogs, inventory, financial records). Row-level security policies in PostgreSQL or similar databases enforce data isolation at the database layer, providing defense in depth beyond application-level access controls.

Vendor Onboarding System

The vendor onboarding pipeline must balance speed with compliance. A multi-step registration process collects business information, trade license details, bank account information for payouts, and product category preferences. Automated verification workflows validate submitted documents, check business registration against government databases where APIs are available, and flag suspicious applications for manual review.

Each vendor gets a management dashboard with capabilities for product listing, order management, financial reporting, and customer communication. The dashboard should be customizable — different vendor categories may need different features. A seller quality scoring system tracks metrics like order fulfillment rate, shipping timeliness, customer rating, and response time, influencing search ranking and platform privileges.

Product Catalog Management

Marketplace catalogs present unique challenges. Multiple vendors may sell identical products, requiring a catalog matching system that maps vendor listings to canonical product entries. This enables product comparison, review aggregation, and buy-box competition. The matching system typically uses a combination of barcode (UPC/EAN) matching, title similarity algorithms, and manual curation for ambiguous cases.

Commission and Financial Systems

The commission engine is the financial backbone of a marketplace. Commission structures can be flat-rate, percentage-based, tiered by volume, or category-specific. Many marketplaces use a combination — a base percentage commission plus fixed fees for payment processing and logistics. The system must calculate commissions in real-time for order display while maintaining audit-ready records for financial reconciliation.

Payment splitting requires careful implementation. When a customer places an order containing products from multiple vendors, the payment must be split according to each vendor's share minus platform commissions. Payment gateways like SSLCommerz support split payments natively, but complex scenarios — partial refunds, multi-currency orders, or promotional subsidies — often require a custom ledger system that tracks every financial movement.

Vendor Payout Processing

Vendor payouts follow a settlement cycle — typically weekly or bi-weekly. The payout system aggregates completed orders, subtracts commissions and fees, accounts for refunds and chargebacks, and generates payout instructions for the bank transfer system. A hold period between order completion and payout settlement protects the platform against fraud and returns. In Bangladesh, payouts are typically processed through bank transfers or mobile financial services like bKash.

Order Orchestration

Multi-vendor orders require sophisticated orchestration. A single customer order may contain items from five different vendors, each with different shipping methods, fulfillment timelines, and return policies. The order management system must split the customer-facing order into vendor-specific sub-orders, track each independently through its fulfillment lifecycle, and present a unified view to the customer.

Shipping coordination adds complexity. Options include vendor-managed shipping (each vendor ships directly), platform-managed shipping (centralized logistics like Pathao or Steadfast), or a hybrid model. Platform-managed shipping simplifies the customer experience but requires warehouse infrastructure or logistics partnerships.

Dispute Resolution Architecture

Disputes between buyers and sellers are inevitable. A structured dispute resolution system provides escalation tiers: direct buyer-seller communication, platform mediation, and final platform decision. Each tier has defined SLAs and automated escalation triggers. The system must maintain a complete audit trail of all communications and evidence submissions. Machine learning models can assist in categorizing disputes and recommending resolutions based on historical patterns.

Scalability Considerations

Marketplace search must handle catalogs with millions of SKUs from thousands of vendors while delivering sub-second results. Elasticsearch or similar search engines with custom ranking algorithms that factor in vendor quality scores, price competitiveness, and fulfillment reliability provide the performance and relevance needed. Caching strategies must account for vendor-specific data freshness requirements — price and inventory data needs near-real-time accuracy while product descriptions can tolerate longer cache durations.

Building a successful marketplace requires expertise across e-commerce, fintech, and platform engineering. At Nexis Limited, we architect marketplace platforms tailored to the Bangladeshi market with the scalability to grow regionally. Explore our services or contact us to start your marketplace project.