Contents
If your business operates in a way similar to platforms like Airbnb, eBay and Uber, you may be running what’s known as an online marketplace. In today’s digital age, particularly in 2025, these platforms are more diverse and complex than ever before.
Whether you’re just starting out or looking to elevate your existing online marketplace, it’s crucial to have the right legals in place. With evolving regulations and technological advancements, the proper legal framework not only paves the way for success but also helps protect your business from future risks.
In this article, we’ll break down everything you need to know about building a robust online marketplace – from identifying the risks, understanding the key legal contracts, managing relationships with sellers, to choosing the appropriate business structure and payment setup.
What Is An Online Marketplace?
An online marketplace is a platform that introduces sellers to potential buyers and vice versa, while also facilitating transactions – for instance, by enabling integrated payment options. In essence, it connects people and creates opportunities for commerce.
A traditional goods-based marketplace, such as Gumtree, allows sellers to list their items online, with buyers making payments directly on the platform. The subsequent arrangements – negotiating the price and organising delivery – are handled between the buyer and seller.
Other marketplaces, like Airtasker, extend into the realm of service-based offerings by connecting customers with service providers such as cleaners, tutors, or handymen. And as we progress into 2025, newer models are emerging that leverage advanced technology and innovative sharing practices.
No matter how simple or complex your marketplace is, it’s important to understand the legal steps required to set it all up. In today’s fast-paced environment, staying ahead of regulatory requirements is key to long-term success.
In fact, as online marketplaces continue to evolve, ensuring a robust legal structure is more critical than ever – a point we explore further in our Getting Started with Your Legals guide.
What Are The Risks Of Setting Up An Online Marketplace?
Setting up an online marketplace means connecting multiple parties on one platform, which inherently carries some risks. These include:
- Liability: With various parties interacting on your site, you want to avoid being held liable for disputes or mishaps that may occur between users.
- Privacy: Collecting personal and sometimes sensitive information is common, so it’s vital to be transparent about how you collect, store, and use such data. Regularly reviewing your Privacy Policy helps ensure ongoing compliance.
- Paying People Correctly: In marketplaces such as Uber Eats or Deliveroo, issues can arise around whether sellers are treated as contractors or employees. With updated classification rules in 2025, it’s more important than ever to ensure sellers are paid correctly and comply with employment standards. For detailed insights, check out our guide on employees versus contractors.
What Contracts Do You Need When Running An Online Marketplace?
Now that we’ve highlighted some key risks, it’s important to understand how to manage them through the right legal contracts.
From a legal viewpoint, ensuring you have well-drafted contracts in place will help limit these risks. Below we outline the essential agreements you need for your online marketplace.
Marketplace Terms and Conditions
Marketplace Terms and Conditions detail the rules and requirements every user must follow to access your platform. These set out the buyer-seller relationship, clarify how transactions are handled, and help limit your liability for issues that occur between parties. For more in-depth contract advice, you might also consider reading our contract drafting guide.
It is important that both your buyers and sellers agree to these terms, so everyone is on the same page. Sellers, for example, should clearly understand:
- The standard of ‘acceptable use’
- How membership or registration works on your platform
- How payments are processed on your marketplace
- The extent of your liability – this is where disclaimers prove invaluable
For customers, it’s crucial they understand:
- What it means to register an account
- How your payment system works
- The process for addressing any issues with transactions
- Who bears responsibility when problems arise
Since terms and conditions are central to mitigating risks, it’s essential to work with a lawyer to ensure these documents are tailored to your marketplace’s specific needs. We’ve discussed more on this topic here.
Website Terms and Conditions
As an online marketplace, you need comprehensive Website Terms and Conditions, similar to any e-commerce site. These conditions help manage expectations, outline acceptable usage and limit your liability should technical issues, such as website downtime or bugs, occur.
It’s also important to include a copyright disclaimer within these terms to protect your intellectual property rights.
Privacy Policy
Your online marketplace will handle a significant amount of personal information, such as phone numbers and email addresses. A comprehensive Privacy Policy is therefore essential.
This policy outlines how you collect, store, use and protect personal data – and it should also clarify how sellers on your marketplace must handle customer information. If you employ cookies on your website, you’ll additionally need a Cookie Policy to address privacy concerns.
Furthermore, if you’re dealing with data from EU users, ensure your practices align with the General Data Protection Regulation (GDPR); you might need a dedicated GDPR Privacy Policy for your marketplace.
Choosing The Right Business Structure For Your Online Marketplace
One effective way to manage the varied risks of running an online marketplace is by choosing the right business structure. Let’s walk through some common business structures for online marketplaces.
Sole Trader/Partnership
If you’re in the early stages, operating as a sole trader or in a partnership can be a cost-effective and straightforward option. This allows you to run the business under your own name while minimising overheads. However, keep in mind that under this structure, you are personally liable for any business debts.
Company
While setting up a company may seem more complex and costly, it offers significant advantages in terms of protection. A company structure creates a legal barrier between your personal assets and the business liabilities. For practical guidance on this process, check out our Quick Tips for Registering a Company in Australia.
Figuring Out The Best Payment Structure For Your Online Marketplace
Once you’ve chosen your business structure, the next step is determining how you’ll receive money – your payment structure.
The three primary payment structures include:
- Commission-based: You earn a percentage of the seller’s revenue.
- Subscription-based: Users pay recurring fees to access your marketplace.
- Listing fees: Sellers pay a one-off fee to list their items.
Each of these structures has its unique advantages and challenges, so it’s important to consider which one best complements your business model.
Determining Whether Your Sellers Are Employees Or Contractors
It’s critical to determine whether your sellers operate as employees or independent contractors – a distinction that affects how you manage payments and entitlements. In 2025, recent judicial decisions in the gig economy have underscored the need for clarity in this area.
Employees:
- Are entitled to benefits such as sick leave, annual leave, minimum wage, etc.
- Are typically covered by the business’s insurance.
- Work under a degree of control dictated by the business, including hours and remuneration.
Contractors:
- Operate independently, setting their own schedules and fees.
- Must hold their own ABN and arrange their own insurance.
- Are not entitled to benefits under the National Employment Standards.
While most marketplace sellers tend to be independent contractors, the distinction can blur when services are provided on an ongoing basis. For example, even though Uber Eats drivers are typically classified as contractors, legal challenges in recent years have highlighted the nuances in their work arrangements.
If your sellers are contractors, they are responsible for their own ABNs and insurance, and your payment structure should reflect this. Conversely, if they are classified as employees, you must ensure they receive their full entitlements under the National Employment Standards. For further clarity, refer to our detailed article on the differences between employees and contractors.
Need Help Setting Up A Marketplace?
Launching an online marketplace involves navigating a maze of legal considerations, but with the right guidance, your platform can thrive. As digital commerce continues to advance in 2025, regular legal reviews and updates are key to staying compliant and competitive.
Whether you need assistance drafting comprehensive terms and conditions, choosing the optimal business structure, or setting up the ideal payment system, the experienced team at Sprintlaw is here to help. Feel free to reach out to us at team@sprintlaw.com.au or call 1800 730 617 for a free, no-obligation discussion about your online marketplace’s legal needs. You can also explore our Contact Us page for more information.
Meet some of our eCommerce Lawyers
Get in touch now!
We'll get back to you within 1 business day.
Top 3 Legal Mistakes
Book in a free consultation with us to discuss your legal needs.