How to Launch a Successful Multi-Vendor E-commerce Marketplace

Search Google for the highest revenue-generating e-commerce stores, you’ll find names like Amazon, eBay, Walmart, Airbnb, etc. All these online stores work on different business models but the one common thing among them is that they are all multi-vendor marketplaces.

Considering the popularity of multi-vendor marketplaces, many aspiring entrepreneurs now want to launch similar stores like Amazon, eBay, or Airbnb. However, starting an e-commerce marketplace is not a walk in the park. In this post, I will try to explain each and every thing about online multi-vendor marketplaces.

What is a multi-vendor marketplace?

An online multi-vendor marketplace is a platform where various merchants from different locations sell their items or products under a roof. The owner of the marketplace handles the transactions work, whereas inventory is managed by the sellers.

Interesting Stats about Online multi-vendor marketplaces:

• Based on gross merchandise, Taobao is the most popular online marketplace in the world.
• Amazon is the leading marketplace in the USA.
• More than 300,000 third-party sellers started selling on Amazon in 2017.
• A better price is the leading reason why people prefer to buy on online marketplaces.
• 31% of first-time shoppers prefer to buy on online marketplaces.
• Revenue cut by marketplace operator is the leading reason why merchants prefer to have their online stores.

Stats source: statista.com

How does a multi-vendor marketplace work?

• Sellers register on the marketplace. It can be a paid or free registration.
• Customers or businesses can buy the products from their choice of the seller.
• Admin can charge a certain fee on each transaction.
• Payment is transferred directly to the admin account. Admin after deducting his commission transfer the rest of payment to seller’s account.
• Product delivery can be handled by both seller and admin.
• In the case of a faulty product or any query, the customer can complain directly to the seller or on the online portal.

Must Read: As digitisation becomes a necessity for B2B, so will marketplaces

Types of multi-vendor marketplaces

Mainly, there are 3 types of online multi-vendor marketplaces.

B2B multi-vendor marketplaces: B2B marketplaces are those where the sellers sell products to other businesses at a wholesale rate. Alibaba or Walmart are the popular B2B multi-vendor marketplaces.

B2C multi-vendor marketplaces: B2C multi-vendor marketplace is a platform where various sellers sell their products or services to customers on sale. Amazon or Flipkart are the popular names in the online B2C marketplaces.

C2C multi-vendor marketplaces: C2C marketplaces are those where customers can sell their products or services directly to other customers. Ebay, Taobao are the best examples of C2C marketplaces

Revenue Sources for a Marketplace Owner

There can be multiple revenue generation channels on an online marketplace. However, it can be changed depending upon the nature of a business.

• By selling their own products.
• By selling paid subscription services like Amazon Prime.
• A certain commission on each transaction.
• Monthly or yearly subscription charges from sellers for selling on the portal.
• Through paid advertisements.
• Display featured products.
• By affiliate programs.

How Products and Services are delivered in multi-vendor marketplaces?

• On most multi-seller marketplaces, products are delivered to the customer by the admin.
• In some business models, sellers also deliver the products by hiring a logistics team.
• The buyers get the products or services directly from sellers. For example: Make My Trip.

Why multi-vendor marketplaces are preferred over single stores

Benefits for sellers or vendors:

• Readymade traffic.
• No website setup & managing cost.
• Better opportunities to market their products with a brand value.

Benefits for customers:

• Variety of products.
• Get the best deals.
• Better price & quality products.

Benefits for the Marketplace Owner:

• Higher profits through different revenue generation channels.
• No inventory management headache because the sellers take care of inventory.
• Because every seller will be managing his shop on their own, you don’t need to hire people to do this.

Must-have features in a multi-vendor marketplace

• Separate vendor pane
• Product import/export
• Rating and review system
• Fast search functionality
• Features products option
• Shipment of products by vendors
• Customer-to-vendor communication
• Push notification for vendors
• Products listing and management through a mobile app
• Automated task processing
• Reporting and data analytics for admin and sellers
• Integration with third-party tools
• Registration pages for customers and sellers
• Detailed product listing pages
• Digital wallet and multiple payment gateways
• Multi-lingual and multi-currency feature in case of geographic targeting
• Bulk order feature for B2B marketplaces
• Multiple levels of administrative access
• Responsive Design
• SEO friendly platform
• Mobile apps for customers & sellers

How to start an online multi-vendor marketplace

You can start a multi-vendor marketplace either by building it from scratch or using the readymade solutions.

Building a multi-vendor marketplace from scratch is a time-consuming process and requires a lot of investment. However, with the help of readymade solutions, you can launch a multi-vendor marketplace in a few hours and without any technical knowledge.

Here is a list of best turnkey multi-vendor e-commerce platforms:

YoKart

When it comes to starting a multi-vendor marketplace, Yokart stands high. It is a dedicated multi-vendor marketplace platform to easily launch ecommerce marketplaces like Amazon, eBay, Alibaba, etc. The platform offers 1-year free technical support and free installation on all packages.

• High user interface & attractive design
• Multiple payment gateways
• Fully customizable & scalable platform
• Real-time shipping cost calculator
• Product catalog system
• RTL language support
• Customers to vendors communication
• Mobile apps for customers and sellers
• User-friendly dashboards for admin and sellers

Shuup

Shutup is a new entrant in the multi-vendor industry. The platform offers many attractive features that make it stand high in the list of multi-vendor solutions.

• Separate vendor pages
• Product catalog system
• Single checkout
• Easy order management
• Customizable
• Search Engine friendly
• Responsive design

X-Cart

X-Cart is a popular open source e-commerce platform. With X-Cart you can easily start single or multi-vendor stores.

• Separate vendor panel
• Customer to vendor communication
• Act on behalf of a vendor
• Individual commission rate for each vendor
• Built-in layout editor
• Product catalog system

To see the detailed feature comparison of top multi-vendor platforms, read this post: https://www.business2community.com/ecommerce/top-multi-vendor-platforms-to-start-an-online-store-like-amazon-ebay-02181880

Share your thoughts in the comments section in case you want to add any information in this post.