10 mins

The Benefits of a Multi-Vendor Marketplace for My Business

Daniela Cherkova
Jun 6, 2018

Multi-vendor marketplaces. Also known as eCommerce marketing or eCommerce marketplace, the multi-vendor marketplace is a platform that encourages a person, shops or multiple vendors to sell their products with a strategic plan. The owner of the market place is required to draw customers as well as the prepared transactions while third party vendors are responsible for the manufacturing and shipping processes.

The Online Shopping Multi-Vendor Marketplace offers a simple portal that improves the methods of production by allowing businesses to sell their products directly to consumers, thus avoiding the immovable process of holding stocks. This form of supply chain management is also known as “dropshipping” method.

A business model for a multi-vendor marketplace

Companies such as eBay, Amazon and Flipkart run an affluent business model for the multi-vendor marketplace. This type of business model plan gained the most attractive and efficient name in web eCommerce by proving its potential. A multi-seller business module promotes sales for third-party vendors by permitting them to sell their goods in one online marketplace.

The whole marketplace works on the same software base. It allows all vendors to share their different products on a single website. In regards to revenue, the owner of the multi-vendor marketplace takes a certain percentage on the sale of any goods sold via the marketplace’s platform.

Why is there a surge in the growth of multi-vendor marketplaces?

A good number of entrepreneurs are starting to invest in the multi-vendor marketplace because it features a variety of business-friendly positives. They are listed below:

  • Reduces effort thus simplifying work

  • ‍Reduces effort thus simplifying work

  • ‍No need for inventory maintenance

  • ‍Cost effective

  • ‍A wide array of products attracts buyers thus generating sales

The benefits of a multi-vendor marketplace

The dynamic of online shopping continues to change as more eCommerce entrepreneurs are discovering that multi-vendor marketplaces are the better option. Business owners as well as eCommerce investors are endorsing online marketplaces over regular online stores because of their wide range of benefits.

With a standard multi-vendor marketplace platform put in place, all parties can benefit in the following ways:

To the business owner

  • A marketplace business module allows the business owner to take a commission on the commodities sold by vendors. This can either be additional to or in place of the marketplace’s products thus raising the chances of a profit.

  • Since multi-vendor marketplaces allow platform operators or business owners to collect commission on the products sold by vendors it grows the earning profits

  • A multi-vendor marketplace offers a direct buying process since factors such as the cost of commodities as well as the availability of stock are all transparent and open on a certain platform in an open atmosphere

  • Multi-vendor marketplaces provide better chances for purchasers and suppliers to establish new relationships both within and beyond their chain of supply

  • It offers a reduced time limitation for selling across geographies because the online marketplace software runs around the clock


To the vendors

  • Small-scale vendors or stores don’t need to depend on a budget or marketing capacity in order to build their multi-vendor marketplace website because a software can help them join a marketplace. Such vendors or stores can get clarity by following themselves with a known business that is bigger, in some cases they can also use the marketplace’s shipping options.

  • Smaller vendors or stores looking to decrease their marketing values or aren’t too confident about establishing their own multi-vendor market place platform can join these huge marketplaces and get clarity through their fulfillment options.

  • Through improving and maintaining uniformity, multi-vendor market places create an environment where there is normal exchange of prices between new and old vendors.

  • A multi-vendor marketing platform acts as a new sales channel whose role is to market and sell the products or goods of vendors

  • eCommerce marketplaces enable the sales of goods overseas through offering vendors a chance to trade in the international online marketplace.


To the consumer

  • The users of a multi-vendor marketplace benefit from seeing a variety of options displayed on a single website which is enabled to offer them the highest quality or most moderate price for different products.

  • The consumers also get an opportunity to compare products rather than going on their different websites. This encourages them to find high quality commodities with the fairest cost.

  • Since multi-vendor marketplaces feature real time and updated data on the availability and cost of products making it easier for buyers to get the best deal.

  • Customers can not only search for their best vendors but also establish a trading partnership by having an exclusive deal with them.

Implementing multi-vendor marketplace eCommerce

If you’re thinking of executing multi-vendor marketplace eCommerce then you will need to establish the following for our business:

  • Commission fee – you need to establish how you will get paid from the merchants trading in your marketplace. How will your business make money?

  • Payment option – establish how merchants will collect payment and through which platform.

  • Liability – you need to find ways for ensuring that buyers  pay for goods purchased and that merchants produce goods that meet the needs of the customers.

  • Fulfillment and shipping – you need to figure out if it is your marketplace or the merchants that is responsible for the product fulfillment. Also how will you stablish the various options of shipping?

Once you have made decisions in regards to the aforementioned points, it is crucial that you get an excellent eCommerce software solution to reach your objectives.

Requirements of a standard multi-vendor marketplace

If you are thinking of establishing a standard marketplace eCommerce, then it should at least have the following features:

  • Fast search functionality – one of the most essential tools for a multi-seller marketplace to have is search functionality. It is more important than eCommerce itself. Customers need to find what they need in a vast sea of  third-party commodities.

  • Simple vendor listing/registration – it is important that third-party merchants know how to join your marketplace and build their product listing as soon as possible. If your platform makes it hard for merchants to list their products then they will go somewhere else. Remember, sellers want their profile page to manifest those listings.

  • Digital vs. physical – there are a few multi-seller marketplaces that are restricted to physical or digital goods. Therefore you need to figure out which of these options is the right one for your goals.

  • Cost – for the multi-vendor marketplace, there are a few notable differences in price. Therefore, you have to be extremely careful when selecting the platform by measuring its cost and what it will feature.

  • Simple reviews – since you will be having many merchants, customers need to assess both products and vendors as fast as possible so that the merchants can build a prominence.

  • Ability to collect commission fee – when you own a marketplace the one way you should be making income is through charging a commission fee. Your marketplace platform should make it easier for you to manage payments to avoid confusion.

The best multi-vendor marketplace platforms

When done right, multi-vendor marketplace are gold mines. Generally, the idea behind it is to allow companies or people to create profiles then post their products for sale on the website. Here are some of the multi-vendor online shops that can help you create a community of buyers and sellers and potentially earn some good money.

Magento with marketplace

Even though Magento primarily focuses on eCommerce, it is an open source platform making it one of the best platforms to build a multi-vendor marketplace on. The price is $349 excluding your Magento licensing. If you want to allow multi-vendors you need the help of an extension, in this case, the extension is the marketplace multi-vendor module which allows you to convert a pre-existing Magento site into a multi-seller eCommerce.

WordPress with the Marketify theme

The WordPress platform is somewhat faster when it comes to implementing a multi-seller system when it is paired to by the Marketify Theme, a much easier option for beginners. WordPress is free but the theme costs $63 making it an affordable option. In addition you get plenty of support from WordPress.

Even though WordPress with the Marketify platform works perfect for any type of business, you may be required to have a little bit of technical knowhow. However, it is not difficult to learn how to upload a theme onto this platform.

CS.Cart Multi-Vendor

With a $1450 lifetime fee, CS.Cart is not only powerful but also popular multi-vendor marketplace software which permits you to run your site off your own server. It also helps improve your security and gives you full control over your maintenance and content procedures. Even though CS.Cart’s standard packages don’t permit you to create a multi-seller site, the company offers a completely separate package for making it happen.

The next big thing in online eCommerce is websites that are able to find a solid niche and enable businesses and individuals to reach consumers.

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