How to build a website like Farfetch

In 2007, Portuguese businessman Jose Neves founded Farfetch—which would later become one of the most successful fashion marketplaces globally. From beginning as an e-commerce marketplace for luxury boutiques, Farfetch now connects tens of thousands of users in over 190 countries with major branches in Porto and Lisbon, and its headquarters in London.

The marketplace officially launched in 2008, and it’s been up since then, raising $885 million as an IPO in 2018 before officially getting sold to South Korean group Coupang in 2023 for a whopping $500 million. The idea was to use retailers to pick up and package the items a buyer purchases in Farfetch-branded packages. This means the marketplace itself doesn’t need to hold physical inventory and can avoid the risks other traditional retail businesses usually face with poorly managed products, stolen items, or missing clothing.

Online platforms are excellent for sellers as they offer an avenue to reach a broader audience, boost sales, and cut marketing expenses. There’s something for all marketplace players involved. Customers gain from the convenience of shopping from any location, accessing a vast array of products, and relishing reasonable prices. Marketplace proprietors also profit from transaction charges, increased traffic, and a diverse selection of products they can offer. So, all the key stakeholders enjoy a mutually beneficial situation.

The success of the online marketplace Farfetch is a result of several key factors. Firstly, Farfetch has created a unique and curated shopping experience for luxury fashion enthusiasts—by partnering with over 1,300 boutiques and brands worldwide. This extensive network allows them to offer a wide range of products, ensuring that customers can find exactly what they want when they want it. On top of that, Farfetch has invested heavily in technology and innovation, providing a seamless and user-friendly platform for both buyers and sellers. Their focus on customer service and personalized recommendations further enhances the shopping experience, leading to high customer satisfaction and repeat business. Overall, Farfetch's ability to combine a vast selection of luxury fashion with cutting-edge technology has propelled its success in the online marketplace space.

For buyers, Farfetch is a marketplace that offers a seamless shopping experience—with a vast selection of luxury fashion items from boutiques around the world that buyers can browse through and discover unique pieces. The platform ensures authenticity and quality, allowing buyers to shop with confidence. Convenient features like personalized recommendations and secure payment options enhance the overall shopping journey.

For sellers, a marketplace like Farfetch offers a platform to showcase their unique fashion products to a global audience. They can quickly create an online store, upload product listings, and manage inventory. Farfetch provides marketing support, exposure to a vast customer base, and handles payment processing and logistics, allowing sellers to focus on their craft and expand their business effortlessly.

Farfetch is an online marketplace that operates on a platform model. Farfetch acts as an intermediary, providing a platform for sellers to showcase their products and for buyers to browse and purchase items. This business model allows Farfetch to leverage its extensive network of boutiques and brands, providing customers with a diverse selection of luxury fashion items while enabling sellers to reach a global customer base.

So how does Farfetch make money?

Farfetch has various revenue streams in its online marketplace. Firstly, it charges a commission fee from the luxury fashion brands and boutiques that sell their products on the platform. This fee is typically a percentage of the total transaction value. Additionally, Farfetch generates revenue through its white-label services, providing technology and logistics solutions to luxury brands to power their own e-commerce websites. Another way the company makes money is by offering advertising and marketing services to brands, allowing them to promote their products to a wider audience.

Farfetch also has a subscription-based loyalty program called "Farfetch Black & Platinum," which provides exclusive benefits to its members for a monthly fee. Lastly, the marketplace earns revenue from its physical retail stores and partnerships with luxury brands.

Overall, Farfetch's diverse revenue streams contribute tremendously to its profitability in the online luxury fashion marketplace. Now that we know how it makes money, let’s look at the unique features that separate Farfetch from its closest competitors.

The most important functionality when you develop a platform like Farfetch is connecting buyers and sellers in the fashion industry. This includes features such as:

1. Product listing and search: The marketplace should allow sellers to list their products with detailed descriptions, images, and pricing. Buyers should be able to search and browse through the available products easily.

2. Secure transactions: The marketplace should provide a secure payment system that ensures the safety of both buyers and sellers. This may include options for various payment methods and encryption of sensitive information.

3. Inventory management: Sellers should be able to manage their inventory, including tracking stock levels, updating product availability, and managing orders and shipments.

4. Reviews and ratings: Buyers should be able to leave reviews and ratings for products and sellers, providing valuable feedback to other users and helping them make informed purchasing decisions.

5. Customer support: The marketplace should offer customer support to address any issues or concerns buyers or sellers may have. This may include channels such as live chat, email, or phone support.

6. Marketing and promotion: The marketplace should have features to promote products and sellers, such as featured listings, personalized recommendations, and marketing campaigns to attract more buyers.

7. Mobile compatibility: With the increasing use of mobile devices, a marketplace should have a mobile app or a responsive website design to provide a seamless shopping experience on smartphones and tablets.

8. Seller verification and trust: The marketplace should have a system to verify sellers and ensure their credibility. This may include background checks, identity verification, and seller ratings to build trust among buyers.

9. Seamless user experience: The marketplace should prioritize a user-friendly interface, easy navigation, and intuitive design to enhance the overall shopping experience for both buyers and sellers.

10. Global reach: A marketplace like Farfetch should have the capability to operate globally, allowing buyers and sellers from different countries to participate and transact easily. This may involve multi-language support, international shipping options, and localized payment methods.

Building functionality like Farfetch from scratch would require significant investment in time, resources, and expertise. The cost would depend on various factors, such as the complexity of the desired features, the size of the development team, the technology stack used, and the development timeline. Considering the extensive features and capabilities of Farfetch, including e-commerce, inventory management, logistics, and integration with multiple vendors, the cost could range from hundreds of thousands to millions of dollars. Additionally, ongoing maintenance, updates, and scalability considerations would further contribute to the overall cost.

As we said above, developing a successful Farfetch alternative from the ground up may seem daunting at first. However, there are tried and tested methods that increase your potential for success. Just like Farfetch’s initial goal was connecting customers with businesses that had no online presence, it's best to focus on a small niche and try to establish a solid model before expanding.

Focus on solving a specific problem for either the supply or demand side of your marketplace so you can build a good reputation and customer base— growth will follow naturally. This list can provide a great guideline to help achieve your marketplace development goals:

• Conduct thorough market research to identify gaps and opportunities in the luxury fashion e-commerce industry.
• Develop a user-friendly and visually appealing website or mobile app with a seamless browsing and shopping experience.
• Curate a wide range of high-end fashion brands and designers, ensuring a diverse selection of products to cater to different customer preferences.
• Implement a robust inventory management system to ensure accurate product availability and timely order fulfillment.
• Offer competitive pricing and attractive discounts to attract customers and encourage repeat purchases.
• Provide detailed product descriptions, high-quality images, and customer reviews to help customers make informed purchasing decisions.
• Offer personalized recommendations and a tailored shopping experience based on customer preferences and browsing history.
• Implement a secure and reliable payment gateway to ensure safe transactions and protect customer data.
• Establish strong relationships with luxury fashion brands and negotiate exclusive partnerships to offer unique products or limited editions.
• Provide exceptional customer service through various channels, including live chat, email, and phone support, to address any inquiries or concerns promptly.
• Implement a hassle-free returns and exchange policy to build trust and customer satisfaction.
• Take advantage of social media platforms and digital marketing strategies to increase brand visibility and attract a broader customer base.
• Collaborate with influencers and fashion bloggers to promote the platform and generate buzz around new collections or exclusive offers.
• Expand globally by targeting international markets and offering localized experiences, including language options, currency conversions, and region-specific promotions.
• Continuously analyze customer data and feedback to identify areas for improvement and optimize the platform's performance.
• Stay updated with fashion trends and industry developments to ensure the platform remains relevant and appealing to customers.

1. Net-a-Porter: Net-a-Porter is a strong competitor to Farfetch as it offers a similar range of luxury fashion products. However, Net-a-Porter differentiates itself by focusing on curated collections and editorial content, providing a more personalized shopping experience. While Farfetch connects customers with independent boutiques, Net-a-Porter operates as a standalone retailer, allowing for a more streamlined purchasing process.

2. Mytheresa: Mytheresa is another notable competitor to Farfetch, specializing in luxury fashion and offering a wide range of designer brands. Both platforms provide a seamless online shopping experience, but Mytheresa stands out with its strong emphasis on customer service and personalized styling advice. Additionally, Mytheresa often collaborates with renowned designers, creating exclusive collections that attract fashion-forward consumers.

3. MatchesFashion: MatchesFashion competes with Farfetch by offering a diverse selection of luxury fashion items from established and emerging designers. While Farfetch focuses on connecting customers with boutiques worldwide, MatchesFashion operates as a standalone retailer, providing a more centralized shopping experience. MatchesFashion also offers a unique "MyStylist" service, where customers can receive personalized fashion advice from expert stylists.

4. SSENSE: SSENSE is a competitor to Farfetch that caters to a younger, more fashion-forward audience. Both platforms offer a wide range of luxury fashion products, but SSENSE stands out with its avant-garde and streetwear-focused selection. SSENSE also provides a unique editorial platform, featuring interviews, articles, and fashion content that appeals to its target demographic.

5. Moda Operandi: Moda Operandi competes with Farfetch by offering a unique pre-order model, allowing customers to purchase runway pieces straight from the catwalk. While Farfetch focuses on connecting customers with boutiques, Moda Operandi collaborates directly with designers, providing exclusive access to their collections. This approach sets Moda Operandi apart, attracting customers who seek the latest and most exclusive fashion offerings.

Creating an online marketplace like Farfetch is a significant and costly endeavor. However, there are now various cost-effective methods to build a marketplace.

The choice depends on:

• Desired marketplace features
• Technical skills or team expertise
• Budget
• Time availability

Different approaches to building a marketplace include:

• Utilizing WordPress and plugins
• Building on open-source software
• Combining no-code tools
• Using a dedicated no-code marketplace SaaS tool
• Developing on an API-based marketplace SaaS tool

Consider the speed of learning alongside skill and budget limitations. Launching your Farfetch-style platform quickly enables rapid audience understanding. These insights aid in creating a platform that users prefer over existing solutions.

Sharetribe's marketplace software is designed for this iterative learning process.

Initially, we assist in launching a Farfetch-like platform in one day without coding. Use the two-week long free trial of Sharetribe's Build plan to get your marketplace ready fast. When you're happy with your marketplace, you can subscribe to go live.

After launch, you can identify additional features and functionality required to serve your audience. This may involve redesigning workflows, integrating third-party services, or developing a mobile app. Sharetribe allows easy customization, either independently or with assistance from our Expert partners.

With over a decade of marketplace-building experience, Sharetribe offers content resources to support your platform development, regardless of your chosen approach.

We've also published a specific guide on how to build an online marketplace for second-hand clothing, that you might find interesting!

Wishing you success with your Farfetch-style business!

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