From merchant to service platform: how to build a profitable marketplace

For years, the shopping journey started with a Google query. Now, a growing number of consumers bypass search engines entirely, opening Amazon or Vinted directly to browse and buy. This marketplace-first instinct is rewriting the rules of retail.

At the center of this shift lies Shein, acting as a laboratory for the industry. The company has successfully transformed a fast-fashion app into a comprehensive integrated marketplace. This article explores how this strategy is reshaping market expectations, the opportunities it unlocks for brands, and how retailers can evolve by leveraging a unified commerce platform.

Marketplace-first: what does it mean?

The term marketplace-first defines a concrete shift in consumer habits. The default starting point for shopping is no longer a Google search, but a direct visit to a marketplace app. Amazon, Zalando, Temu, Vinted, and specialized niche platforms are becoming the natural entry points for the omnichannel journey. Research confirms that over half of online shoppers now begin their search directly on marketplaces, overtaking traditional search engines.

In a traditional retailer-first strategy, the brand acts as the center of gravity:

• It curates its own product catalog and assortment;
• It controls inventory management and the supply chain;
• It owns the customer experience across its proprietary channels.

Adopting a marketplace-first model flips this logic. The marketplace becomes the primary environment where buyers spend time, compare items, and interact:

• The offering is distributed across dozens or thousands of third-party sellers;
• The marketplace orchestrates the assortment, display algorithms, pricing, payment security, and services;
• The customer “lives” within the marketplace app or ecosystem, removing the need to visit individual brand sites.

Retailers are facing two primary consequences:

1. A loss of organic visibility

A significant portion of demand no longer flows through the brand’s website or traditional SEO channels. When a user opens a marketplace app directly, the retailer is reduced to just one seller among many.

2. A surge in expectations

Shoppers now benchmark every interaction against the high standards of major marketplaces, expecting:

• Deep assortments and real-time stock visibility;
• Competitive pricing and clear fee structures (services, delivery);
• Massive volumes of filterable reviews;
• Gamified experiences;
• Transaction security;
• A wide array of services (delivery options, returns, pickup points, split payments).

In a marketplace-first landscape, the customer need extends beyond the product. It encompasses service quality, payment simplicity, transaction fluidity, and total transparency on fees.

Shein: from merchant to marketplace

A global integrated marketplace

In 2023, Shein rolled out a major initiative: a global integrated marketplace. Previously, the company operated as a vertically integrated merchant, designing collections, managing production, and selling only its own inventory. With this launch, the brand fundamentally altered its scale and nature.

By opening its platform to local and international third-party sellers, Shein has massively expanded its catalog and fortified its presence in every market. The goal is to become the “go-to” environment for every product category—from fashion to home goods and accessories—all within a single app experience.

Shein has thus evolved into the intermediary between buyers and a vast ecosystem of sellers. No longer just a fast-fashion retailer, it has transformed into a merchant solution, increasing its leverage in the value chain by controlling a highly data-intensive marketplace.

A data-driven and on-demand model

At the core of this engine lies an extreme on-demand production strategy. The company launches micro-batches of 100 to 200 items, tests buyer reception in real-time, and restocks only the high performers.

The entire supply chain is steered by signals generated within the marketplace:

• Click-through rates and add-to-cart velocity;
• Wishlist volumes;
• Social reactions and UGC (User Generated Content);
• Product returns and feedback;
• Comparative market performance.

These data points fuel a rapid iteration cycle: design → online launch → test → adjust → replenish or kill. The result is a fully digitalized supply chain.

An app that feels like a social network

The app is engineered as a comprehensive social ecosystem. The marketplace experience seamlessly blends content, interaction, entertainment, and commerce, resembling TikTok or Instagram more than a standard eCommerce site.

The ecosystem leverages several key engagement tools:

• Live shopping hosted by creators, influencers, and third-party sellers, featuring dynamic promotions;
• Daily contests and challenges that reward user participation;
• Mini-games designed to drive dwell time and offer rewards;
• Massive UGC: thousands of content pieces (hauls, video reviews, try-ons) feed a continuous stream of peer-to-peer recommendations;
• An active community where social interactions are embedded in the shopping journey.

Every feature serves a specific purpose: to extend time-on-app and multiply touchpoints.

Shein at BHV: when the marketplace spills into the store

The 2025 opening of a corner at BHV marks a pivotal moment. For the first time, the marketplace is stepping out of the digital realm to become a driver of physical footfall.

This phenomenon is known as the halo effect. A digital service platform transforms into a source of physical traffic for a department store:

• The marketplace aggregates a massive community;
• This community mobilizes when a physical channel opens;
• The retail partner benefits instantly from an influx of qualified shoppers.

The corner serves as an offline anchor for a digitally native brand.

The flip side: third-party control and compliance

As reliance on third-party sellers grows, so does the need for strict product compliance, quality control, and traceability. Shein recently faced this challenge in France.

Following the sale of illicit products by third-party merchants, the company fully suspended its marketplace operations in the country. Simultaneously, the European Commission flagged a potential “systemic risk” for consumers.

Consequently, when third-party sellers become a growth engine, robust governance is mandatory. This includes implementing:

• Stringent seller verification mechanisms;
• Automated and human monitoring of online content;
• Rapid takedown capabilities for non-compliant items;
• Precise documentation to satisfy regulatory requirements.

Adopting a marketplace-first strategy entails heightened responsibility for compliance and the active management of the merchant ecosystem.

What retailers can (actually) adopt

Extend the offering via marketplace-first logic

Retailers can draw inspiration from Shein by adopting specific principles:

1. Integrate third-party assortments to enrich the value proposition

Retailers can onboard partner sellers or curate complementary brands. This strategy can take various forms: an integrated marketplace, physical corners, or embedded partner services.

2. Combine new, second-hand, and services in a single ecosystem

Blending different product states (new, used, refurbished) with services (personalization, repair) is a rising trend:

• Kiabi / Kidkanaï for in-store second-hand and consignment;
• Ikea’s combined resale and repair offering;
• Fnac Seconde Vie for estimating, collecting, and reselling products;
• Ba&sh partnering with Vestiaire Collective to integrate circularity into the customer journey.

Make the experience more “platform-like”: content, community, data

When it comes to customer experience, Shein proves that a product’s success relies on content richness:

• Enriched reviews featuring photos, videos, and detailed ratings;
• Customer photos highlighted across fashion, decor, and beauty categories;
• Curated content via guides, inspiration boards, thematic collections, and recommendations;
• Intelligent recommendations driven by purchase prediction algorithms.

Without replicating the constant gaming focus of the Chinese giant, retailers can still integrate gamification to strengthen loyalty:

• Status tiers in the loyalty program;
• Seasonal challenges;
• Engagement bonuses;
• Dynamic rewards.

Data plays a central role in making these mechanics work. Retailers must rely on a multichannel strategy and a unified commerce platform to access a single, consolidated view of their data.

Unified data fuels personalization and optimizes retention.

What to avoid: the uncontrolled “marketplace everything” approach

While the marketplace-first approach offers new horizons, it also carries significant risks. The primary pitfall for retailers is sliding into an uncontrolled expansion of their offering. By indiscriminately multiplying sellers and assortments, a brand risks losing:

• Control over its market positioning;
• The coherence of its product universe;
• The perception of quality associated with the brand.

The Shein case illustrates the fragility of a model where third-party oversight is lacking. The sale of illicit products led to the marketplace’s shutdown in France and the European Commission identifying a “systemic risk.” Such incidents cause immediate loss of consumer trust and invite heavy regulatory scrutiny.

To avoid these missteps, expanding into a service platform model requires clear governance:

• Entry rules: Precise selection criteria (quality, certifications, shipping times, return policy, customer service);
• Product controls: Document verification, quality checks, and automated risk analysis;
• Liability allocation: Explicit definitions of who guarantees what within the marketplace.

Why a unified commerce architecture is indispensable

A single database for all channels (including marketplace)

To successfully adopt a marketplace-first logic, a retailer must operate on a unified commerce platform. Without this foundation, orchestrating multiple data streams, sellers, and logistics models is impossible. A unified commerce architecture aligns key platform functionalities around a single core.

In this approach, a unique database fuels every channel (eCommerce, stores, marketplace, mobile app). Unified commerce means breaking down the silos between POS, eCommerce, CRM, and inventory.

POS + eCommerce + OMS + WMS: operating as a platform

To function as a true marketplace, a retailer needs a fully integrated operational foundation. The POS and eCommerce systems ensure a unified experience:

• Harmonized pricing, discounts and promotions rules;
• Loyalty status and benefits accessible both online and in-store;
• Instantly updated customer profiles;
• Fluid omnichannel journeys (services, transaction security).

The OMS (Order Management System) acts as the nerve center of the marketplace-first approach, guaranteeing essential capabilities such as:

• Intelligent order management: Sourcing stock from the optimal location (store, warehouse, or third-party seller) based on availability and proximity;
• Management of omnichannel journeys: Click & Collect, Ship from Store, returns, and ReCommerce.

Unification and real-time stock visibility prevent stockouts and broken promises. When a retailer combines multiple assortment sources (new, second-hand, third-party), unified inventory is indispensable for:

• A centralized view of availability;
• Real-time synchronization;
• Displaying realistic and reliable delivery estimates.

Finally, the WMS ensures logistical reliability and execution speed. When integrated with POS, eCommerce, and OMS, it creates an operational continuum that allows the retailer to conduct the entire ecosystem seamlessly.

From “store network” to “commerce platform”

The transformation inspired by Shein represents a paradigm shift. Retailers are moving from a mindset centered on a physical store network to one focused on a commerce platform. Unified retail data enables the management of all channels through an integrated ecosystem:

• Sales (store, eCommerce, marketplace, second-hand);
• Inventory (owned, partner, ReCommerce);
• Products (single product reference);
• Customer data (behaviors, preferences, purchase history).

This shift also requires new performance management metrics. Beyond revenue, retailers must now measure third-party seller performance, the impact of omnichannel flows, and cross-channel interactions.

Read more: Retail KPIs 2025: Key indicators to track your sales, customers, and stores.

Roadmap: transitioning from merchant to platform (at your scale)

Concrete action plan

Step 1: Clarify your role in the ecosystem

Before considering technology, define your positioning:

• Where do you want to act as the operating platform? (Internal marketplace, second-hand, partner services)
• Where are you simply a seller? (Amazon, Zalando, niche marketplaces)

This distinction structures both investment and project governance.

Step 2: Map your channels and offerings

Transitioning to a marketplace-first model requires a clear visualization of your entire business:

• New products;
• Second-hand and consignment / ReCommerce;
• Services (repair workshop, rental, personalization);
• Partner products and services.

Step 3: Align the technical architecture

To operate this expanded ecosystem, you need unified infrastructure and management:

• POS + eCommerce + OMS + a single back-office;
• A unique product reference;
• Integrated CRM and loyalty;
• Unified inventory by channel and offer type.

Step 4: Launch a controlled MVP

You don’t need a massive marketplace on day one. The most effective MVP formats include:

• Mini second-hand marketplaces;
• Integrated partner corners (online or in-store);
• Store-as-a-Service: Hosting a partner’s offer within your journey using simple rules.

The goal is to test data flows and measure engagement.

Step 5: Define your marketplace rules

A marketplace is a regulated system. From launch, you must define:

• Seller contracts and entry criteria;
• Quality charter (shipping times, photos, product data);
• Regular product audits;
• Dispute resolution processes;
• Regulatory compliance (specifically DSA for Europe) and sensitive product management.

Step 6: Drive performance with adapted KPIs

The right KPIs for a platform model include:

• Marketplace revenue share vs. total revenue;
• Net margin per channel;
• Third-party seller contribution;
• Impact on store traffic (halo effect);
• NPS, dispute rates, cancellation rates;
• Average onboarding time for new sellers.

Transitioning from a merchant model to a marketplace is a strategic, progressive transformation that aligns perfectly with modern retail structures. The goal isn’t to copy Shein’s business, but to integrate the successful elements of their model: controlled offer expansion, centralized orchestration, clear governance, and unified management.

This framework empowers brands to gain agility and resilience, particularly when building their own marketplace.