Decoding A Multi Vendor Marketplace: Benefits Of the Model

By |Updated Date : Sep 01, 2020 | 1 Comments | 615 views | Jul 06, 2016
  • Decoding A Multi Vendor Marketplace: Benefits Of the Model

The astonishing growth of ecommerce has redefined our shopping habits and the concept of e-tailing forever. It is forecasted that 22% of global retail sales will come through online sales by 2023, a massive 56% increase from 2019. 

What’s even more interesting is that 57% of global online sales are done on multi vendor marketplaces

Did you know that: 

Online Shopping Trends For Marketplaces

  • 31% of first-time shoppers prefer to buy on online marketplaces
  • 54% online buyers say marketplace shopping has changed the way they shop
  • 95% of online buyers have already used a marketplace

Why Are Multi Vendor Websites So Popular?

Wonder what’s causing this change in our buying habits?

To begin with, online shoppers are a savvy lot. They prefer ecommerce websites that offer them multiple options for products, sellers, shipping etc. Any online store offering a variety of choices is a clear winner because it makes the customer feel empowered and in a position to make informed choices. 

Naturally, then online buyers flock the marketplaces making it one of the most successful ecommerce business models.

No wonder the sales charts of popular multi seller ecommerce platforms like Amazon, Alibaba, Flipkart etc. have inspired the entrepreneurs to convert their online stores into online marketplaces.

What Is A Multi Vendor Website?

A multi vendor website or marketplace is just like a real world mall which has multiple shops under one roof selling different brands and product categories.  Multi-vendor stores provide a common marketplace to various vendors who want to sell their products online but do not own an online store.

The multi-seller portal provides an online platform where various sellers, suppliers, distributors etc. can register and start selling their products or services.

Related Read: Top 5  Payment Gateways for Multi vendor marketplaces 

How Does A Multi Vendor Marketplace Work?

The multi vendor website is different from a regular online store where the business owner maintains an inventory for selling products. This is how a  In a multi-vendor set up works:

  •  Vendors or sellers register on the marketplace. Registration can be free or paid
  • Sellers list their products on the marketplace 
  • Customers buy products sold on the marketplace. These products can be of a single seller or multiple different items from various sellers
  • Admin gets a commission on each product sold. Commission can be fixed or variable.
  • Payments are directly transferred to the Admin’s account. Admin deducts his commission and sends the remaining amount to a single or multiple vendor accounts.
  • Product shipping can be handled by the vendor or the admin
  • Customers can complain to the support team of the marketplace for any issues or queries related to their order

How The Multi Vendor Marketplace Model Benefits The Admin, Vendors And Customers


The multi seller online store owner/Admin benefits by having various sellers who bear the responsibility of sourcing and stocking the product. Shipping can also be handled independently by the vendors or the owner can offer a shipping solution to manage a more streamlined shipping.

The marketplace owner takes care of  marketing and providing customer support. Thus, without taking the pain of managing end-to-end operations the marketplace owner earns a commission on each sale of multiple vendors.


The vendors on the multi seller ecommerce platform can do their business without bearing any cost of IT development. The brand value of the marketplace helps the smaller vendors get better traffic and orders for their products. In turn, they pay a predetermined commission to the marketplace owner for listing and selling their products on the platform.


The customers love shopping on a multi vendor portal as they get a wide range of products at one single place. Also, they do not deal with individual sellers rather put their trust in the brand of the online marketplace. 

Multi vendor marketplace is a win-all business model which makes every party involved in the business happy.

Advantages Of A Multi Vendor Marketplace Over An Online Store  

There are obvious advantages of a multi vendor store over a regular online store that make it the preferred business model of the entrepreneurs and enterprises alike. Some of the benefits of marketplace model over an online store are:

  • No investment in inventory or finding new products for selling
  • Offers multiple revenue sources to the owner
  • Virtually sets up many shops within your marketplace
  • Offers vast range of choices to your customers
  • Cuts down on expenses both for the sellers and the marketplace owner
  • Multi-seller marketplaces generate better traffic and sales compared to a simple website
  • Frees vendors from brand building effort allowing them to focus on sales and profits
  • Offers easy and flexible product management and reporting options

With so many benefits, multi vendor marketplaces are a more lucrative model for the business owner. Along with commissions, there are other ways of generating revenue from your multi vendor business.

How To Create Multiple Revenue Sources On Your Marketplace

Your revenue need not be limited to the commissions you earn from your vendors. There are other ways to generate more income from your business. Based on your marketplace’s model and products you can create some of these revenue streams for your business: 

  • Sell your own products on your marketplace
  • By offering paid membership for value added services. Example; Amazon Prime
  • Seller registration fees or membership fee for selling on your portal
  • Paid advertisement for some sellers or brands
  • Charges for displaying featured products
  • Affiliate network

Once you create a niche for your multi-seller brand it becomes easy to use a combination of these to multiply your income.

How To Choose A Multi Vendor Ecommerce Platform For Your Marketplace

Planning to convert your ecommerce website into a flourishing marketplace? How do you want to take your development work? Would you prefer to get it custom made or use a turnkey ecommerce platform to go live and start selling in no time?

Not sure? Let’s make the choice easier for you. 

Unless you have plenty of time and money, getting a custom solution can really become cumbersome. Instead of spending resources on getting it developed from scratch it is always better to go with a feature-rich multi vendor ecommerce platform  that gets you started quickly.

 Related Read : Ask these questions before choosing an e commerce platform

 Check out the various off-the-shelf multi seller ecommerce platforms and go for the one that best fits your requirements. While reviewing the platforms check if they provide the following features:

  • Mobile ready platform that gives you m-commerce advantage
  • Secure platform guaranteeing vendors trust in your marketplace
  • Complete control of merchants to the admin
  • Customization and options to tweak the entities and flow
  • Scalable platform that builds high-performance marketplaces
  • Freedom to the sellers to manage their inventory and pricing
  • Seamless shopping experience to customers across device
  • Sound tracking and reporting of sales, commissions, abandoned cart etc.
  • SEO ready platform that helps create better visibility and brand value
  • An easy to use platform for sellers, customers as well as the Admin

StoreHippo multi seller ecommerce platform offers all the above features to build the most advanced and easy to use online marketplaces.

Launch Future Ready Multi-Seller Marketplace with StoreHippo

StoreHippo offers a unique solution for online businesses looking for a platform to create a multi-vendor site instantly. With 300+ inbuilt features you can explore new marketing strategies and diversify your business model for higher  ROI.

What’s more you also get inbuilt solutions like multi store, multilingual, multi currency support etc. to take your business to global markets. With integrated payment gateways and logistics you can make it easier for your customers to order and deliver their orders seamlessly. Isn’t this the formula for the success of any online business?

Related Read: 5 Inspiring success stories that will guide you how to start online store

So what is the wait for? Get started with your own multi vendor marketplace powered by StoreHippo. Want to explore the features of StoreHippo?

 Drop us a mail on [email protected] or book your free demo to take a walk-through. Get started right now!

Leave A Comment

Hi Thanks for sharing insightful blog. I am looking for a single solution through which i can manage my multiple cities inventories and stores. Interested in your multiseller plan, can you please connect me at : [email protected]

By: Nipan Berma
Jul 08, 2016   Reply

Replies :
Hi Nipan, Thanks for appreciating our work and showing interest in our services. Have forwarded your query with our Sales team, and they will get back to you. In the mean time you can check our plans and pricing here : Vishal -

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