The COVID-19 Pandemic brought significant growth to the eCommerce industry by shifting the consumers’ shopping behaviors. According to a recent study, the number of digital buyers worldwide has already reached 2.14 Billion in 2021 – almost 28% of the entire world population.
But, what’s even more interesting is that online shoppers are becoming inclined toward shopping from online marketplaces. Statista reported that 47% of worldwide eCommerce sales are now generated from online marketplace stores and are forecasted to multiply in the coming years.
So, if you’re planning to play big in the eCommerce industry in 2022 and beyond, we recommend investing in a multi vendor online marketplace.
WHAT IS A MULTI VENDOR MARKETPLACE?
A multi vendor marketplace allows third-party vendors/sellers to sell their products in one place. In layman’s terms, a multi vendor marketplace is like a digital shopping mall consisting of a myriad of small shops run by individual vendors/sellers.
Each vendor in your marketplace will be responsible for warehousing the products and delivering them to the customers’ doorsteps on time. The marketplace owner is responsible for processing payments for every order purchased from every seller registered on the online marketplace.
WHY SHOULD YOU CREATE A MULTI VENDOR MARKETPLACE?
Now that we have established what a multi vendor marketplace is let’s head to the primary reasons you should build your multi vendor marketplace.
1 – Minimal Investment
Setting up an online multi vendor marketplace requires minimal investment because you’ll only be responsible for maintaining the marketplace and processing the payments among vendors. The individual vendors will cover the remaining expenses such as marketing, promotions, product pricing, packaging, and delivery.
2 – Reduced Efforts
As you’ll no longer be responsible for managing products catalog, sales, and delivering orders to the customers, there will be a significant reduction in the overall efforts. As a result, you can invest more time in promoting your marketplace across various channels.
3 – Freedom from Inventory Management
In a multi vendor marketplace, inventory management, including storing, warehousing, packing, and delivering the orders, is the vendors’ responsibility. This leaves you with the bandwidth to do much more towards increasing your marketplace’s reach.
4 – Increased Traffic
Any eCommerce store that sells various products from various categories will likely generate massive traffic quickly. This is mainly because sellers utilizing your marketplace to sell their products are highly-likely to be promoting your marketplace along with their products. And since multi sellers will be promoting your marketplace on various platforms, it’ll boost the overall traffic on your multi vendor marketplace.
HOW DOES A MULTI VENDOR MARKETPLACE WORK FOR OWNERS?
Here’s how a multi vendor marketplace model works for owners:
- Store owners build a multi vendor marketplace platform either from scratch (custom development) or using readymade solutions like RocketBazaar.
- They invite & onboard vendors to sell their products.
- They invest in marketing and promotions to attract potential customers.
- They monitor each vendor’s performance & enhance the marketplace functionality consistently.
- They keep a small commission out of every order and credit the rest of the amount to the vendor’s bank account.
- They focus on growing the product catalog by inviting more vendors to increase the overall revenue of their marketplace.
HOW DOES A MULTI VENDOR MARKETPLACE WORK FOR VENDORS?
Here’s how the multi vendor marketplace model works for the vendors:
- Vendors register on the marketplace store.
- They set up their shop by uploading products and managing their product listings.
- Whenever they receive an order, they take care of packaging and delivery of the order while the owner processes the payment.
- They market their products through various channels to increase sales & profits.
WHAT ARE THE DIFFERENT TYPES OF MULTI VENDOR MARKETPLACE?
A multi vendor marketplace can be classified into three categories based on the products it sells or the problems it solves, or to whom it sells.
1 – General marketplace
A general multi vendor marketplace store generally sells all kinds of products from diverse categories. This kind of marketplace store doesn’t target specific markets. So, they allow vendors from different industries to sell their products on the marketplace.
Amazon, Alibaba, and Flipkart are some of the well-known examples of general multi vendor marketplaces.
2 – Specialty marketplace
Specialty multi vendor marketplaces are quite the opposite of general marketplace stores. This kind of marketplace focuses on a specific niche and they onboard vendors who sell a particular category of products.
The target audience for specialty marketplace stores is comparatively low. Therefore, they need to target customers looking to buy specific products.
Jabong, Myntra, and Healthkart are some of the examples of specialty multi vendor marketplaces.
3 – B2B Marketplace
B2B multi vendor marketplaces focus on industrial buyers and consumers on a single platform. These invite manufacturers, suppliers, vendors, and other business players for either industrial or wholesale buying.
GoMechanic, Ninjacart, IndiaMart, and AmazonBusiness are some of the common examples of B2B marketplace stores.
BEST PRACTICES FOR LAUNCHING YOUR OWN MULTI VENDOR MARKETPLACE
Having a clear roadmap for launching your multi vendor marketplace helps to increase the chances of smooth and successful development.
You can follow some of these best practices to launch a thriving multi vendor marketplace for your eCommerce business.
1 – Identify Your Prospects
For multi vendor marketplaces, the customer journey is often complex and complicated. Therefore, it is vital to create a buyer persona that helps to identify the key traits of a large segment of your prospective customers. Furthermore, you also need to identify their most significant pain points and figure out how to address them in the best possible way.
2 – Come Up with a Compelling USP
A clear USP (Unique Selling Proposition) goes a long way in standing out from the competitors in any booming marketplace industry. Therefore, you must develop a compelling USP for your multi vendor marketplace. A persuasive USP usually involves certain qualities like being rare, clear, and specific.
3 – Adhere to Best UX Design Principles
To ensure your multi vendor marketplace succeeds, you need to adhere to the best UX design principles when designing your marketplace store. We have listed some of the crucial ones for you:
- Use subtle shades and avoid vibrant colors. This helps to make your marketplace look more professional.
- Let your prospective customers know if a product is available and help them quickly navigate to the checkout page.
- Allow your customers to set automatic recurring purchases for specific items to save precious time.
- Ensure the registration process is short & hassle-free. The customers appreciate social Media Login functionality.
- Create well-organized categories for all the products so that your prospective customers can quickly discover them.
- Finally, publish whitepapers and showcase social proofs to build a trust foundation for your multi vendor marketplace.
4 – Make a List of Functionalities
For any multi vendor marketplace, you must keep in mind the following functionalities:
- Registration page
- Customer/Vendor profile
- Product catalog
- Advanced search functionality with various filters
- Product reviews and ratings
- Product comparison
- Vendor/owner dashboard
- One-step checkout process
- Multiple shipping & payment options
- A convenient return and reordering system
- Customer loyalty program
5 – Decide on the Development Approach
When it comes to the multi vendor marketplace, there are two different development approaches you can consider:
- Custom Development
- Out-Of-The-Box Solutions
Let’s discuss this in detail.
CUSTOM DEVELOPMENT
Custom development has its perks and drawbacks.
- Custom development is quite costly compared to out-of-box solutions.
- It can take a long period compared to out-of-box solutions.
- It can help to make sure every single business requirement is covered.
- In custom development, you won’t have to pay for unnecessary features.
- You can add new features easily.
OUT-OF-THE-BOX SOLUTIONS
Like custom development, out-of-the-box solutions also have some advantages and disadvantages:
- Out-of-the-Box solutions are affordable as compared to custom development.
- Most of these are ready to install and use; therefore, they do not require much time to set up & launch your multi vendor marketplace.
- These are completely safe because they receive regular updates & latest security patches to prevent cyberattacks.
- Customer support is an advantage when you build your multi vendor marketplace by utilizing an out-of-the-box readymade solution.
- You may get unnecessary functionalities as a part of the package deal.
- Though, new functionalities can be added through custom development.
HOW TO GET STARTED?
With a plethora of marketplace solutions available in the market, starting a multi vendor marketplace has become relatively more straightforward than it was a few years ago.
RocketBazaar is a prominent multi vendor marketplace solution based on the Magento 2 platform that lets you launch your marketplace store in weeks. The solution is cost-effective, has a quick turnaround, and is feature-rich to fulfill all the requirements of customers, vendors, and store admins. And the best part is the solution is customizable to match your unique needs.
With that, we hope that you found this article insightful. For further information, please visit the official website of RocketBazaar. And if you need our professional consultation, feel free to reach out to us at any time.