Why Multi Vendor Marketplace Model Is Good For Your Business

By |Updated Date : May 31, 2023 | 3 Comments | 878 views | Dec 29, 2020
  • Why Multi Vendor Marketplace Model Is Good For Your Business

Thinking of ways to accelerate your business growth without investing upfront? How about pivoting to the ZERO inventory multi vendor marketplace model?

Wonder why this very model and not any other?

Well, the reasons are numerous. 

But before we delve into the reasons, let’s first do a quick market and trends analysis.

Why enterprise brands should consider the Multi Vendor Marketplace business model for their brand

Online marketplaces have become more of a search engine for buyers looking for any kind of product. The options, prices and convenience of shopping on marketplaces are driving customers in droves.

Here is how customers across the globe are interacting with multi vendor stores;

  • 75% of frequent online buyers wish their favorite retailers had marketplaces
  • 48% of shoppers begin their purchase journey directly on a marketplace website
  • 37% of e-shoppers prefer to make a repeat purchase on online marketplaces
  • $8.7 trillion of sales forecasted via multi vendor marketplaces by 2025
  • 62% of all ecommerce sales globally will be done on marketplace websites by 2027

Source: Statista, Mirakl, Bain & Company and Accel report

Well, well you have proof enough to back your plans of going the marketplace route for your business. After all, where the buyers are, the buck is!

Wonder why online buyers are increasingly gravitating towards the multi vendor marketplace websites. Wondering what makes this model such a hit? Let us check it out!

Why do customers prefer buying on online marketplace stores?

Well, savvy online buyers need the best from their online purchases. And they want all the things they need in one place, lots of options, differential pricing, fast shipping and the assurance of a brand that can take care of their concerns.

And where do they get all of this together?

At popular online multi vendor marketplaces like Amazon, Alibaba, Flipkart, eBay etc. 

The stupendous success of these thriving marketplaces has redefined the online shopping experience of millions of customers. With the pandemic changing our buying habits forever,  buyers are looking for the ease and convenience of their marketplace shopping experience on all other platforms.

From starting our mornings with fresh fruit and vegetable deliveries from BigBasket and Blinkit, to relying on  OLA and Uber for daily travel or Amazon for buying almost anything, we all have quite a few marketplace apps to make our lives easier.

Wouldn’t it be great then to align and upgrade your business to the multi vendor marketplace model and become the favorite shopping hub of your buyers? 

Yes, certainly it's a good business move for your enterprise brand! 

7 compelling reasons to start your Own Multi Vendor Marketplace

While we know that customers are in love with marketplaces, you might still wonder if the multi seller model is the only way to scale and grow your business. While your regular store can also be scaled to set your brand on an upward trajectory, doing the same in the marketplace model is much easier and less cost and time intensive.

 The multi-seller model has a number of benefits over a regular online store.  Here are some of them:

Zero Inventory Cost

The biggest issue with scaling a business is the cost involved in procuring, warehousing and finally optimally and efficiently shipping the orders from different locations. Setting up a multi vendor marketplace is the easiest way to have a rich inventory without spending anything.

Your brand can easily showcase a rich and diverse product catalog without investing anything in inventory. The sellers that come to your marketplace will bear the CapEx and inventory costs.

Sell A Variety Of Products

You can add any number of vendors to your store who will have their own inventory. This means your store will come very close to the physical world marketplace where lots of vendors offer a huge variety of products to the customers. Conditioned by their experience on other marketplace websites customers would come to your brand for a new experience and remain loyal if you offer them the best products and services.

Streamlined and Smooth Operations

Running an online store effectively is all about streamlining operations to manage and deliver products in the fastest way. When you convert your online store into a multi-vendor marketplace, managing inventories, adding new products, and providing product catalog updates are all done by the individual vendors. This results in smooth and hassle-free operations and shifts the headache of managing it all to multiple players. You can just sit back and plan for more efficient processes and strategic business expansion.

Less Expensive

Having an online marketplace can cut your costs drastically by lowering the CapEx costs and costs of managing teams that handle your inventory. With the onus of managing the inventory, warehouses etc. on your vendors, you can just focus on your sales and customer support teams. 

This division of labor not only cuts down the costs but also results in greater efficiency and better quality of services on your multi vendor e-commerce store.

Multiple Revenue Streams

You can add different sellers to your multi vendor e-commerce store and charge different levels of commission from them. This helps you earn additional income with negligible effort. Every time a seller gets an order on your marketplace store you automatically get a percentage of profit as commission.

Along with that, you can also add multiple revenue streams on your marketplace website by offering prime position, ad space, premium membership to sellers and buyers etc.

Less Responsibility, More Control

Having an online marketplace means you have complete control and authority of choosing, allowing, restricting or rejecting any vendor. Once a vendor is listed on your multi vendor marketplace the onus of order fulfillment lies on the vendor. 

This frees the admin(s) from many responsibilities and frees them for strategic business expansion. While your marketplace brand can still check and help vendors with the fulfillment process, you are better positioned and free from everyday operations worries and free to plan strategic growth. more strategic.

Easy to pivot to hybrid models

While pivoting to the multi vendor marketplace model seems to be a good option for the current state of your business, a few years down the line you might find yourself thinking of new ways to expand and grow your business, like all successful businesses do.

The marketplace model gives you the scope and agility to easily combine two or more popular models and build a disruptive new model to supercharge your brand’s growth. For example, you can create a location based multi store model for your marketplace or maybe go D2C and start manufacturing some bestseller products sold on your marketplace website. The possibilities are immense and the online marketplace model can easily combine with other models to build your successful enterprise marketplace. 

With so many advantages, you definitely want to go for this popular business model. Don't you?

Why Vendors Prefer Selling On Multi Vendor Ecommerce Websites 

It’s not just the buyers that love multi-seller marketplaces. Vendors also love to have a presence on marketplace websites due to a number of reasons.  

Some of them are:

  • Greater visibility on multiple channels like marketplace apps and website
  • More orders due to readymade high volume traffic of the marketplace
  • Saves marketing cost as the brand value of marketplace favors the vendors
  • Easy setup and cost-saving in as and need to set up online store from scratch
  • Advantage of accumulated knowledge and data from multi vendor marketplace helps to sell better
  • Flexibility to concentrate on profit-making with no setup worries
  • Technical aspect of managing stores are completely taken care of by the marketplace brand

By onboarding the best vendors on your marketplace, you can not only become your customers favorite but also attract more sellers who will be attracted to join your online marketplace brand knowing how you have helped other sellers grow.

Which industries and services can benefit from the Multi Vendor Marketplace Set Up?

Wondering whether your industry vertical is the right fit for the model? Lay your worries to rest as almost any industry verticals can benefit from a multi vendor e-commerce store model.

Let’s take a look at some scenarios where this type of business model is a perfect fit:

  • Food delivery aggregator where multiple sellers can be added to offer various cuisines being prepared at individual kitchens.
  • Grocery chain with stores in different locations fulfilling area wise orders promptly
  • Service platform for doctors and medical professionals offering a panel of doctors and related healthcare and diagnostics services
  • Gifts and flowers business delivering orders across the globe with multiple sellers offering their services under the umbrella of the multi vendor marketplace brand
  • Big franchise running different stores at different locations, like Chroma or Vijay Sales can add more stores as sellers under one common marketplace website
  • Clothes, electronics, beauty products and almost any other similar e-commerce verticals
  • Various non-profit and social organizations can come together on a common platform and offer services for the betterment of society

The multi vendor marketplace set up is a versatile model which can be quickly tweaked and tailored for different industry and business use cases. Across industries, this model has proven to be a success helping businesses accelerate their growth. 

What are the challenges of building a multi vendor marketplace and how to overcome them?

While the marketplace model has many benefits, building your own marketplace website and app can have its own challenges. Some of the main challenges and their easy solutions are listed below:

8 challenges of building an online marketplace

Finding the right technical solution provider

Finding the right team or multi vendor ecommerce software can be a challenge and needs diligent research and informed decision-making. Building a marketplace from scratch can take years and going with a rigid marketplace software can hamper your business growth.

Building multi channel presence

The buyers nowadays hop in and out of multiple digital channels and want their favorite multi vendor marketplace brand to be available on every channel. Building an omnichannel marketplace solution is a challenge as it entails repeating the whole coding, design, development and testing process for each customer touchpoint like marketplace website, marketplace app, adding shop now feature to social platforms etc.

Finding the right vendors

 It is the vendors and their products that make your multi vendor ecommerce    website a success. Finding the right vendors for your multi-seller brand, onboarding and retaining them is crucial for your growth and also a challenge as vendors often tend to register and sell on multiple competitor marketplaces as well.

Giving freedom to vendors yet having control

While having multiple vendors helps you create a rich and diverse catalog for your brand, having control over their activities is critical to ensuring your business works in a hassle-free and frictionless manner. For exercising control over your vendors while giving them the freedom to run and manage their business independently on your multi vendor ecommerce website you will need to have  complex marketplace software that gives you a centralized view of all that is happening on your multi seller portal. 

Building such a system can require iterative coding or syncing multiple apps and extensions which is a challenge.

Managing huge catalogs

As your marketplace scales up the collective size of catalogs offered by your sellers becomes enormous. Imagine managing hundreds of thousands of SKUs and other product-related details. Finding the right product, order and inventory management tools for your online marketplace can become one of the most painful challenges if you do not choose the right solutions.

Managing the vendors and their commissions and payouts

Managing your vendors and their commissions and timely payouts can be a great challenge if your marketplace software is not designed to auto-calculate and help in making easy payouts.

Just imagine the amount of calculations you would be doing if you do not automate and streamline vendor management and payouts on your online marketplace.

Tax and compliances

With vendors from different locations comes the responsibility of accurately calculating various taxes related to their industry, place of order origin etc. Tax compliances can become very challenging if not taken care of with the right tools and in a timely manner.

Adapting to changing market dynamics

Even the most successful business needs to be agile enough to cope with changing market and buyer demands. Finding a software solution that helps you strategize your growth and future-proofs your business by offering feature rich solutions can take care of this challenge.

While these challenges seem daunting, a feature-rich, scalable and flexible multi vendor marketplace software solution can take care of all these challenges and help you build a successful business.

How StoreHippo Multi Vendor Marketplace Solutions Give you a competitive edge

StoreHippo provides you with comprehensive multi-seller functionality to set up horizontal, vertical, service aggregators or any custom model of multi seller online stores. 

11 StoreHippo features to build future-ready online marketplaces

Battle tested turnkey Solutions

StoreHippo’s inbuilt multi seller solution does not require any additional apps or plugins. The plug-and-play solution reduces your go-to-market time substantially. With a vast experience in building successful marketplaces, StoreHippo can easily build marketplace websites for every plausible marketplace use case.

Omnichannel Solutions

Powered by MACH (Microservices, API-first, Cloud-native, Headless) architecture StoreHippo enables you to use the same backend logic and APIs to create multiple storefronts.

Marketplace Apps

 Built grounds-up on the mobile-first principle, all marketplaces built on StoreHippo are PWAs. This means your online store looks, feels and works like a marketplace app even when opened in a browser of any device. You can also use the built-in mobile apps builder to build your marketplace apps and boost order volume by leveraging m-commerce to sell better.

300+ Built-in features

With a host of built-in features and a flexible multi vendor marketplace platform you can experiment and grow your business by creating your own out-of-box solutions. Storehippo also gives built in order, inventory and product management solutions to streamline the whole business process on your multi seller website.

Easy Vendor management

With StoreHippo multi seller solutions you get complete autonomy and control in selecting and moderating vendor and product profiles. You also get instant notification when a seller is added, edits, sells or uploads new products and you can manage your vendors efficiently and effectively.

Separate Vendor Dashboard 

With StoreHippo online marketplace solutions each vendor gets a separate admin dashboard to manage their orders, shipments, refunds and returns. There is also a vendor mobile app to help vendors run their business on the go.

Vendor Commissions and Payout Management

StoreHippo offers a built-in seller ledger to help you manage the commissions, payouts and other accounting activities for your sellers. You can also easily divide payments among multiple sellers using the adaptive payment feature. 

Easy Tax compliance

One of the biggest challenges of a marketplace website is to manage the different types of taxes applicable based on vendor location and the type of industry the products belong to. StoreHippo takes care of this for you with a powerful tax engine using which you can set up different tax groups. StoreHippo also offers full GST support for multi vendor ecommerce websites in India.

Discount Engine

Effective and multi level discounts play an important role in growing your business. StoreHippo offers a powerful discount engine to implement discounts and coupons and also integrates easily with best-in-breed discount tools to help you run strategic marketing campaigns on your online marketplace.

Multiple Payment Channels

Offering frictionless checkouts on your marketplace apps and website goes a long way in building brand credibility and ensuring steady flow of orders. StoreHippo offers 60+ pre-integrated payment gateways along with digital and store wallets to make payments easy on your marketplace. 

Seamless Integrations

StoreHippo’s API-based architecture makes it easy to integrate with the best in breed accounting, ERP, CRM, marketing, shipping, payments and support solutions to build a a tailored marketplace ecosystem for your business.

With so many benefits and solutions, StoreHippo helps enterprise brands not only negotiate all the challenges of building a multi vendor marketplace but also offers a future-ready solution to grow their business.

How To Convert Your Online Store Into A Multi Vendor E-Commerce store?

Thanks to the turnkey marketplace solutions like StoreHippo, turning your online store into a marketplace is a simple 10 step process.

Here is what you need to do to build and start selling on your own multi seller online store:

Step 1: Schedule a free demo with StoreHippo and discuss how to migrate your online store to our platform. (If you are an existing StoreHippo customer you just need to choose the right plan and inform our support team who will guide you to convert your online store into a multi vendor marketplace). If you have your store on Shopify, WooCommerce or Magento, you can use the easy channel migration feature and easily migrate your business to StoreHippo.

Step 2: Pay for your subscription and migrate your online store to StoreHippo with assistance from our team.

Step 3: Choose a beautiful theme from our themes library for your storefront.

Step 4: Secure your multi vendor marketplace with FREE SSL offered by StoreHippo.

Step 5: Add multiple payment gateways to your multi seller site from our list of integrated payment solutions.

Step 6: Automate your shipping with integrated logistics solutions or manage your own fleet of delivery boys using our delivery boy management system.

Step 7: Build your marketplace app right from StoreHippo admin without any coding.

Step 8: Invite vendors to your business and let them add their products to your online marketplace

Step 9: Optimize your multi seller online store and use StoreHippo’s inbuilt marketing tools to market your business.

Step 10: Test your site and start earning commissions on every order!

That’s it your multi vendor marketplace is ready to carve a niche and set your sales charts for an upward climb.


Well, it is clear that the multi vendor marketplace model is a virtual goldmine with a host of benefits for your business. What's even better is that you can reach new markets just by onboarding new vendors from different locations. With a multi vendor ecommerce website you get freedom from maintaining inventory and can offer a plethora of products to attract more customers. A marketplace set-up is bound to take your online business many notches higher.

All you need to get started on your exciting journey is a comprehensive multi vendor solution like StoreHippo. So what’s the wait for? Begin exploring the amazing features by starting your 14-day free trial right away!

Leave A Comment


This model clicks! Thrilled to explore new possibilities for our business. Thanks for sharing!

By: Baidu Chaturvedi
Aug 07, 2023   Reply

Replies :
Hi Baidu, thanks for appreciating our blog on Why Multi Vendor Marketplace Model Is Good For Your Business. If you need our help setting up your store, feel free to contact us. For more ecommerce related information, keep checking the StoreHippo blog Team StoreHippo - Aug 06, 2023

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Best article for ecommerce business.

By: Sandeep Yadav
Oct 04, 2021   Reply

Replies :
"We are happy that you're pleased with the results of multi vendor marketplace features. If there's anything else we can do to help, please let us know. " StoreHippo Team - Oct 05, 2021

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thanx for sharing this useful info.

By: Dai Software
Sep 13, 2021   Reply

Replies :
"Hi, thank you for appreciating our article on why multi vendor marketplace is good for businesses. For more ecommerce related information, keep checking updates on our StoreHippo blog." StoreHippo Team - Sep 13, 2021

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