How to Start a Successful Multivendor E-commerce Marketplace?

If you search Google for the greatest revenue-generating E-commerce stores, you will get names like Amazon, Airbnb, Walmart, eBay, etc. All these stores have different business models but they are all multi-vendor marketplace.

Considering the fame of multi-vendor marketplaces, many ambitious entrepreneurs now wish to launch similar stores like Amazon. 

Due to the high internet invasion all around the world, the E-commerce industry has came out remarkably. The retail E-commerce sales in the USA alone are expected to reach $740 Million by 2023. An interesting fact here is that popular multi-seller E-commerce companies Amazon, Ebay have nearly captured 60% of the US E-commerce market. Similarly, in other countries the market share of Amazon, Ebay, Etsy, etc. is very high. 

Some Interesting Facts:

  • Taobao is the most popular online marketplace in the world based on gross merchandise. 
  • Amazon is the third largest marketplace in the world
  • In 2017, more than 300,000 third-party sellers began selling on Amazon.
  • A better price is the main reason why people choose to buy on online marketplaces.
  • 31% of first-time shoppers favour to buy on online marketplaces.

What is Meant by Multi Vendor or Multi Seller Marketplaces?
Multi vendor marketplace allow the vendors sell their products by setting up an exclusive store front. The sellers can manage logistics, inventory, product additions, etc. at their own end. The owner of the marketplace can earn a commission on the sale of every product or by the other revenue generation models.

Types of Multi Vendor Business:
There are 2 types of multi-vendor platforms:
B2B Multi vendor business:

For bringing transparency and staying competitive, several B2B commerce firms are investing in online marketplaces. Walmart and Alibaba are the well-known names in the B2B E-commerce sector.

Business Model of B2B Multi Vendor E-commerce Marketplace:

 E-commerce Marketplace

B2C Multi vendor Business:
These days, lots of ambitious entrepreneurs choose to invest in B2C multi selling websites. Amazon, Airbnb, and FlipKart are best examples.

Model of B2C Multi Vendor E-commerce Marketplace:

Multivendor E-commerce Marketplace Business Model

How Does It Work And How to On board Small Businesses?

How does a multi-vendor marketplace work?

  • Vendors register on the marketplace. It can be a free or paid registration.
  • Buyers can buy the products from their choice of the seller.
  • Owner of the marketplace can charge a certain fee on each transaction.
  • Payment is transferred directly to the owner account. Owner after deducting his commission send the remaining payment to vendor’s account.
  • Product delivery can be managed by both the admin and seller.
  • In case of a defective product or any issue, the buyer can lodge a complaint directly on the online portal or to the seller.

How To Onboard Small Businesses?

  • Grow sellers network through collaboration and development.
  • Do smart marketing.
  • Connect with existing sellors. 
  • Take less or zero commission in the beginning.
  • Provide the best customer support.

Revenue Generation Channels on a Multi-Seller Marketplace: 

Revenue Generation

Here are some of the top revenue generation models of a multi-vendor E-commerce marketplace: 

  • Google Adsense Ads 
  • Side banner ads 
  • Commission on every sale
  • Subscription like Amazon Prime
  • Promoted and features products on home page 
  • Monthly and yearly subscription fee from sellers 
  • Affiliate partnerships 

Essential Features Of A Multi-seller Website & Mobile App:
Have a look at the features that yours’ B2C or B2B multi-vendor mobile app or E-commerce website should have: 

Multi Vendor Mobile App and Website Features from Buyers’ Viewpoint 

  • Mobile optimized 
  • High website speed 
  • Easy order processing 
  • Seller’s reviews and ratings 
  • Multi-step checkout pages on a mobile app 
  • Coupon codes and rewards points 
  • 3 dimensional images and well written product description 
  • Advanced search features on website and app 
  • Login and signup with Social media profiles User-friendly dashboards for admin and sellers
  • Digital wallet and multiple payment gateways 
  • Product reviews and ratings
  • Multilingual and multi-currency 
  • Multiple levels of administrative access
  • Bulk order feature for B2B marketplaces 

Multi Vendor Mobile App and Website Features from Sellers’ Viewpoint: 

  • Product import/export 
  • Separate vendor panel 
  • Features products option 
  • Rating and review system 
  • Customer-to-vendor communication 
  • Shipment of products by vendors 
  • Push notification for vendors 
  • Informational pages for vendors 
  • Automated payment with draw 
  • Products listing and management through mobile app

Multivendor Website & Mobile App Features from Owners’ Viewpoint 

  • Multiple revenue generation methods 
  • Upload unlimited number of products 
  • Automated task processing 
  • Reporting and data analytics 
  • Customizations and scalability 
  • Integration with third party tools 
  • Detailed product listing pages 
  • Registration pages for customers and sellers 
  • Product review management Search engine friendly 
  • Fully native IOS and Android apps 
  • Content management system for easy website management 

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:

  • Wide range of products.
  • Get the best deals.
  • Best quality products and better price.

Benefits for the Marketplace Owner:

  • Bigger profits over different revenue generation channels.
  • No inventory management as the vendors take care of inventory.
  • As every vendors will be controlling their store by themselves, hiring people to do that is not mandatory. 

Essential Features In A Multi-Vendor Marketplace:

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


How To Start?

You can start a multi-vendor marketplace either by making it from scratch or getting the prefabricated solutions.

Building from scratch is time-consuming and can cost you thousands of bucks. You can simply start your multi vendor E-commerce marketplace with business-ready solutions without any technical knowledge. All you have to do is to find out some of the top marketplace platforms to meet your needs such as Code Brew. 

How Can Code Brew Help You?

When it comes to starting a multi-vendor marketplace, Code Brew ranks high. It is a steadfast multi-vendor marketplace platform to launch E-commerce marketplaces like Amazon and eBay easily. The platform provides one year free technical support and free installation on all packages.

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

Even though these are the basics of starting a multi vendor marketplace, now you have got encouraging examples and are familiar what essential things to look before investing in your business. Of course, selecting a multi vendor E-commerce platform, launching and market it smartly. Share your thoughts in the comment section below.

October 24, 2019



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