Ecommerce is a progressive environment. In comparison to a simple online store, multi-vendor marketplaces have a lot more to offer to their customers and can easily meet increased consumer demands as well as the constant evolution of online shopping.
A multi-vendor marketplace is a website that brings together a multitude of sellers and buyers in a unified system. Every seller in the community can easily create and control their own products. Typically, the marketplace does not own inventory or manufacture products, instead, acts as a middle person, connecting customers with the products or services from a seller network. A few great examples of multi-vendor marketplaces are Amazon, eBay, Alibaba, AliExpress, Walmart, Snapdeal, and Airbnb.
If you also want to create a successful multi-vendor marketplace, you first need to consider and evaluate a few important things.
Things to Consider while Creating a Multi-Vendor Marketplace
1. Determine your niche
First of all, you need to find a particular niche (the one you’re interested in) and give your audience a clear understanding of what is your marketplace about.
So, narrow down your focus and determine the category and type of products/services you want to sell and conduct thorough research about your target audience.
In the beginning, it is more productive to find and attract your unique customers and focus on their needs and preferences. And as the platform scales, you can expand the product/service offerings and cover a greater number of consumer groups.
2. Benefit from the weaknesses of your competitors
Analyze your competitors and find out ways in which you can be better than them. You can provide better or unique products/services, innovative customer loyalty programs, or lower commission rates for vendors. Implement your USP (Unique Selling Proposition) right from the launch of your store and do not forget to mention the same in your ads.
3. Find vendors
To get inventory in your multi-vendor marketplace, you need to find vendors. So, what can convince prospective sellers to list their products on your multi-vendor website? To find an answer specific to your business,
- Begin your research by browsing the internet
- Check interest groups and social accounts, online catalogues, similar marketplaces, official websites, professional forums, and communities, and visit exhibitions and special events.
- Reach the potential sellers via email and phone.
4. Think about a revenue strategy
Finding the right revenue strategy for your marketplace is important. There are various options, but not all may work with every vendor or in every situation. Therefore, you should select carefully. Let’s take a look at a few popular ones:
Subscription fee: Sellers and buyers make yearly/monthly payments for using the website. On some websites, just one party pays. Marketplaces like Amazon and eBay use this strategy.
Transaction fee: On every successful trading transaction, the system charges a flat fee. It must be a transaction made through the website. For example, sellers may pay a percentage (say 4%) of the trade. Marketplaces like Etsy, Shopify and eBay use this strategy.
Advertising: Featured ads are an excellent option for sellers. It is a way to showcase and advertise their goods and services, which helps increase their visibility in the online marketplace platforms. Marketplaces like eBay and Facebook use this strategy.
5. Choose a software platform
Selecting the right ecommerce software is important for building a successful online marketplace. However, with so many software platforms available, you may get overwhelmed while deciding the best one for yourself as all of them offer their own set of advantages.
So, take time to explore each variation before you make a final decision. You can check out highly reliable platforms like WooCommerce and take the support of Bluehost’s comprehensive WooCommerce Hosting solutions to easily build, promote, and start selling from a secure online store backed by powerful tools.
6. Attract buyers
When you are ready to accept the orders, you can start inviting your customers. Tell them how your online marketplace can resolve their problem and what new experience it will deliver.
To attract buyers to your marketplace and promote it even further, you will need to use various marketing tactics and channels like search engine optimization, social media marketing, video marketing, pay-per-click advertising, content marketing, influencer marketing and affiliate marketing.
Multi-vendor marketplace – A great business idea
Multi-vendor marketplaces have grown successfully in the last few years and succeeded the conventional way of running ecommerce stores. As they act as a host for a wide range of vendors selling various items, customers can enjoy the convenience of buying for their multiple needs in one place. Thus, such marketplaces attract a good number of customers, ultimately benefitting the marketplace owner as well as the vendors.
Moreover, as a multi-vendor store owner, you wouldn’t have to manage everything on your own, such as logistics, product additions and upgrades, pricing, inventories, and various other details. The multi-vendor website allows vendors to manage the necessary tasks seamlessly. Thus, creating a win-win situation for you by automating multiple tasks and reducing manual input.
We hope this blog was helpful to you.