What Is An Online Marketplace
An online marketplace is an ecommerce portal where multiple vendors come on a common portal to sell products or services. This ecommerce model is also called the multi-vendor ecommerce website.
Different vendors/sellers register on the multi-vendor site where they upload, display and sell their products or services. The sellers pay a commission to the marketplace owner for using the readymade platform and its other services which may include customer support, logistics etc. The portal and its policies, transactions etc. are managed by the marketplace admin/operator.
This is similar to a real-life shopping mall, wherein, multiple shop-owners sell their products and services to the customers. Some popular examples of ecommerce marketplaces are Amazon. eBay, Flipkart etc.
Why Online Marketplaces Are Becoming Popular
Recent market surveys suggest that multi-seller stores account for more than 50% of global online sales. Also, online marketplace sales grew by 20% in 2018 to reach $1.8 trillion. These promising figures have tempted many entrepreneurs to adopt this business model over a regular online store.
For starters, this is the in thing and customers are increasingly opting to shop online on multi-seller shops where they get more products at competitive prices. Secondly, it saves cost both for the business owner as well as the sellers. The owner doesn’t have to maintain inventory and the sellers are free from the burden of taking care of the technical aspects.
The following table explains how the multi-seller store is a WIN-ALL model.
Advantages Of An Online Marketplace
These obvious benefits make an online multi-seller site the most favoured shopping destination of the customers which in turn, benefits the sellers by giving them more orders and the admin by giving guaranteed commission on each sale.
How to Build An Online Marketplace
While deciding to start a multi-vendor online store is easy finding the right technical solution to build it might be tricky. You might be tempted to set up your own team and start the development from scratch. But this can prove to be a costly and time-taking affair this might take months or even years to get developed, tested, optimized and then fully- functional.
You definitely do not want to roll a half baked cake kind of a multi-vendor store which is not optimized for various devices. This can drive your customers away as we all know that modern online shoppers are an impatient lot and user-experience is the most important thing for them.
So, a smarter choice would be to look for an online marketplace software that is feature-rich, reliable and battle-tested. While you can find a lot of multi-seller software providers it is essential to choose the one that not only offers a future-ready solution for your business. However, this can be tricky as you can never be sure of the market dynamics and how things are going to change in the coming years.
So the best-case scenario would be to go for an online marketplace software that offers the following benefits:
- Built on future Ready technology
- Offers mobile-first solution to tap the m-commerce boom
- Is inherently scalable and can easily grow to any number of products, vendors or traffic
- Easily customizable to the new requirements of your growing business
- Feature-rich to help you manage the end-to-end business without spending too much time
- Secure and tested solution for a variety of multi-vendor ecommerce models
- Cost-effective solution with faster go-to-market time
Apart from these, you would need a host of features like vendor management, vendor payouts, product management, inventory management, admin and vendor dashboards, commission set up etc. to run the complex operations and day-to-day activities of a multi-vendor marketplace.
Also, it would be nice to have multiple payment channels, an integrated logistics channel and a solid discount engine to plan a range of deals and promotions. While deals will attract more customers, easy checkout and fast delivery will keep your customers loyal. These will also help your vendors and ultimately make your online marketplace profitable.
Along with these, it would be nice to have go-global featuresin your multi-seller software. With the online businesses going beyond borders it is nice to have features like a multilingual marketplace with capabilities to accept payment in multiple currencies. Also, a robust tax-engine that can implement multi-tiered taxes based on specific countries or regions can help you streamline your international online marketplace.
Added features that can make vendor management easier would be;
- Seller ledger for tracking seller payouts, orders etc.
- Seller page on frontend to help customers check all the products of a given seller
- Order and shipping management by vendors
- Vendor-specific shipping and discounts
- Adaptive payments to pay different sellers of a multi-product order
- Returns and refunds management
- Multiple notification channels to notify vendors, admin and customers
Along with these, a well-structured admin panel that offers a host of tools to run the business, track the vendors and orders and has statistics tools to give you business insights would help you a lot in managing your business.
Features That Make It Easy To Manage An Online Marketplace
Along with these, it would be nice to have go-global features in your multi-seller software. With the online businesses going beyond borders it is nice to have features like a multilingual marketplace with capabilities to accept payment in multiple currencies. Also, a robust tax-engine that can implement multi-tiered taxes based on specific countries or regions can help you streamline your international online marketplace.
Added features that can make vendor management easier would be;
- Seller ledger for tracking seller payouts, orders etc.
- Seller page on frontend to help customers check all the products of a given seller
- Order and shipping management by vendors
- Vendor-specific shipping and discounts
- Adaptive payments to pay different sellers of a multi-product order
- Returns and refunds management
- Multiple notification channels to notify vendors, admin and customers
Along with these, a well-structured admin panel that offers a host of tools to run the business, track the vendors and orders and has statistics tools to give you business insights would help you a lot in managing your business.
Why Does Your Business Need High-Quality Online Marketplace Software?
A well tested, flexible and scalable online marketplace software is the key to success for your multi-seller website. StoreHippo’s customizable multi-vendor ecommerce platform has built successful marketplaces for a host of industry verticals and business models. Whatever be your business model we likely have a solution built for it already. All you need is to explore the feature-rich platform and see how easily you can tweak not only the frontend but the backend as well.
We recommend you to check our Multi-Vendor Use Cases and see the various models we have already built.
