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Let’s look out multi vendor ecommerce website features list in this blog!
A Multi-Vendor Marketplace is just one among the two types, with the other one being Single-Vendor Marketplace. The marketplace supports multiple vendors to host their products on the platform whereas, in a Single-Vendor Marketplace, only one vendor is permitted to sell products online. While each has its own benefits, we will explore the Multi-Vendor type in detail covering a comprehensive guide.
We will start with defining the term. What defines a multi-vendor marketplace website?
Listing and selling products is the primary function of an online marketplace, when multiple vendors are allowed to carry out this operation, we call it a Multi-Vendor marketplace. The model works by a shared approach where the marketplace owner establishes the infrastructure that includes the software and each of the modules like product listing, payment processing and others. On the other hand, the vendors maintain control over their offerings, pricing and inventory management. As a result, it delivers a diverse shopping experience for the customers where the likelihood of finding the product they are looking for is very high.
What is the importance of a multi-vendor ecommerce platform?
The answer to this emphasises the compelling reasons for its existence. It contributes to a larger percentage of today’s global retail sales, in that multi-vendor marketplaces commit to providing a huge share year-on-year that worldwide online marketplaces are set to grow at a 9.49% CAGR from the current year to 2029.
Additionally, this model stirs a healthy competition among the vendors in an online marketplace, where quality products, competitive pricing, and support are provided. Resultantly, it not only benefits the vendors and the customers but the marketplace owners as well. This is attributed to the multiple revenue streams that are generated which include subscriptions, commissions, or listing charges. To sustain the increasing growth rate, the platforms are integrated with tech stacks that allow for seamless scalability to accommodate various product categories and enhance user experience simultaneously catering to the dynamic evolving nature of the marketplace.
Advantages of Multi-Vendor Marketplaces
There are 3 aspects to the benefits derived from the multi-vendor marketplace, namely advantages to the customer, vendor and the marketplace owner. The following points discuss the benefits for the marketplace owner.
1. Higher revenue potential
The sources of income generation is diverse, giving the ecommerce marketplace owner an upper hand.
- Commissions: These are laid on each sale made through the marketplace.
- Listing fees: Charges are applied to the products that are listed. It can be a one-time charge or a recurring fee.
- Subscription plans:
It is the primary fee that is charged to access the platform and it is recurring in nature. The benefit lies in selecting from a tiered plan basis where you only pay for the features and services that you require.
- Premium features for vendors:
These features when offered enable vendors to spend their resources to gain advantage for better visibility, as a result, the marketplace owner benefits from the added fees.
- Advertising:
Vendors pay for advertising and product placements on the homepage or in the search results. This creates an additional source of income for the marketplace owners.
- Value-added services:
These include order fulfilment via a center, payment processing, customer support, or even logistics solutions. When these services are charged, they generate additional income.
- Affiliate Marketing:
As a passive source of revenue, marketplace owners can generate income by partnering with influencers and third parties and engaging in affiliate marketing programs, especially on a multi-vendor ecommerce website. Income is earned when a sale is made through the affiliate link in the form of commissions.
As of 2023, global retail e-commerce sales were estimated at $5.8 trillion, with projections indicating a 39% growth over the subsequent years, expecting to surpass $8 trillion by 2027.
2. Inventory and shipping management
A significant amount of financial resource is expensed for inventory handling that includes storage and warehousing and shipping that includes last mile delivery. This is entirely handled by the vendors and not by the marketplace owners. The operational overheads are reduced to a greater extent for the marketplace owner.
According to DHL, 85% of vendors in multi-vendor platforms handle their own shipping and inventory management, which reduces operational overheads for the marketplace owner.
3. Reduced risk
The presence of a vast number of vendors in the multi vendor marketplace helps in distributing the level of risk associated with a single vendor. When a particular vendor or the industry as a whole is underperforming, the revenue generating capacity of the marketplace owner reduces, but this scenario can be completely eliminated when there are multiple vendors from various industries. The revenue generation potential can be retained and controlled to a certain level, safeguarding the financial interest of the marketplace owner.
A Harvard Business Review study shows that multi-vendor marketplaces can reduce operational risk by 40% compared to single-vendor platforms, as they are less dependent on one source of revenue.
4. Capitalizing on marketing efforts
The vendors are sure to advertise their products on various digital and traditional advertising channels to drive more traffic to their products and increase conversion rates on online selling platforms.This benefits the marketplace owner in customer acquisition by capitalizing on their efforts where platform visibility is gained without spending. This type of coasting promotes a healthy relationship between the vendors and the marketplace owners.
McKinsey estimates that vendor-driven marketing efforts can increase platform traffic by 30-40% through organic channels, benefiting the marketplace owner with minimal additional spending.
5. Product availability
As there are multiple vendors, running out of stock and interruptions to sales are reduced to a greater extent on the best marketplace platforms. Unavailability with one vendor can be mitigated by the other, the likelihood of the product being available on the same platform is higher. This ensures that the customers don’t have to leave the platform to complete their purchase.
According to Statista, the likelihood of products being available across multiple vendors can increase product availability by up to 50%, reducing stockouts and enhancing customer satisfaction.
6. International markets
The selling platforms can be scaled to cater to cross-border purchases. Vendors from around the globe can become tied to the platform. Since the marketplace owners are free from the majority of the operational aspects of maintaining the marketplace, they can easily tap into vendors in other countries. When the regional market saturates, marketplace owners can use this opportunity to diversify the presence in other potential regions where it has its own unique demands.
The global cross-border e-commerce market is expected to reach $4.8 trillion by 2026, with Payoneer reporting that 60% of marketplaces are expanding to international markets.
7. Network effect
When the marketplace starts growing, the existing vendors become a valuable source to bring additional vendors through word-of-mouth. This makes the platform more attractive as a diverse range of products will be listed for sale. This in turn will attract more vendors on seeing the revenue potential of the platform. This loop continues as long as the marketplace owner has a scalable and flexible platform that operates with a sophisticated technology stack to be able to handle the heavy load of traffic.
A McKinsey report highlights that marketplaces with strong network effects can see up to 200% growth in vendor acquisition year over year, driven by existing vendors bringing new vendors onto the platform.
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Challenges in running a multi-vendor marketplace
1. Vendor management
It starts from sourcing, onboarding, and coordinating with them to familiarize them with the platform usage, terms, and conditions that mention the required quality adherence, and pricing models.
Additionally, their performance has to be monitored which requires ongoing relationships to elicit information, reduce misunderstandings, address problems, and ensure that the vendor and the ecommerce marketplace owner stay aligned with their interests.
Without such efforts and initiations from the marketplace owner, the fragile relationship could become the root cause for delays in product availability, inconsistent pricing, lack of responsiveness from vendors, or unethical practices like selling counterfeit goods, pricing fraud or others.
2. Quality control
A good marketplace platform does not guarantee listing of quality products. Vendors may use the platform as a last resort to list their low-quality products as a means to reach the market. This defines the nature of vendors and the potential threat they can bring to the marketplace.
Another challenge faced is that each vendor has their own quality standards for the marketplace owners to set quality standards. Uniform standards become a challenging task. If not done promptly it can result in cancellation of orders, returns and complaints. All of these eventually damage the reputation of the marketplace owner.
In order to control such issues and maintain quality standards, a reliable review and rating system must be established to assess the adherence level of each vendor. Additionally, periodic audits of vendor products can help monitor quality from time to time. In order to ensure that the standards are followed, sufficient training and resources must be provided to the vendors.
3. Vendor exit rate
Dissatisfied vendors may exit the marketplace when they feel their existence is being threatened. It could also become a domino effect that can cause other vendors to exit as well. The overall vendor satisfaction must be measured at periodic intervals to assess the overall health of the ecommerce store.
In certain situations, the uncontrolled price wars can harm the benefits gained by the multi seller marketplace owner. A common trend in any marketplace is that established and larger vendors may dominate the platform in search results or product categories which leaves the smaller vendors dissatisfied. At a certain point, their only option becomes exiting the marketplace in order to sustain their business.
Alongside that, unreasonable fee structures make the marketplace unattractive where exiting could be the only option as they interfere with the profits generated by the vendors. A transparent system makes everything smooth, encouraging the vendors, offering promotional tools to gain visibility, and creating an environment where mutual growth is possible without harming other vendors can help even out the vast differences in competition.
4. Payment management
Proper payment management ensures seamless operation of transactions in a multi-vendor marketplace. A system that is transparent, automated and secure to enable timely transactions and payouts to vendors must be firmly established.
Secured and encrypted transaction processes should be ensured in the payment gateways, any breach in the payment details, would only harm the reputation and reliability where potential customers and loyal customers would undermine confidence in the marketplace, making it seem too vulnerable to continue using.
While this is one part of the tech stack, the ecommerce marketplace owner has to establish terms regarding the commissions, refund policies, and payment schedules to make vendors aware of their expectations from the marketplace. Furthermore, automated tools must be used such as integrated payment gateways and escrow services to streamline the process and enhance promptness.
5. Customer experience
This can be tapped from the vendor or the online marketplace aspect. Detailed product descriptions, correct images, transparent tracking status, and reviews on products are all important for the customers to make purchase decisions. Forced selling by hiding important information can take place, all of which causes frustration and hurts the customer.
Compared to this, the marketplace aspect is even more dangerous, leading to increased churn rates, as the factors involved are directly associated with the user experience. This includes navigability through the website, page load times, user-friendly intuitive design, and a hassled and lengthy checkout process, which can lead to customers dropping off immediately. Once the customer is lost, it only increases the customer acquisition costs. Nowadays, the marketplace has to be optimized for mobiles as well. This is to cater to the ever-increasing mobile commerce, which is gaining traction due to its convenience.
Designing a website considering the practical usability and long-term relationship with customers to earn repeat purchases from loyal customers and additionally encourage them to share a positive word-of-mouth can help in retaining the customers. Higher retention rate directly translates to lower customer acquisition costs.
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Trends in the Multi-Vendor Marketplace
The model has become a dominant force in the retail industry including both brick-and-mortar and ecommerce sales. The projected growth figures are impressive and promising for budding ecommerce marketplace owners to continue their efforts.
The forecast number of global sales considering only the multi-vendor marketplace is $8.7 trillion by 2025. The skyrocketing growth is attributed to the changing customer preferences where 75% of frequent online shoppers express a preference for their favorite retailers to operate a marketplace. This is being increasingly converted into opportunities across the globe.The growth predictions just don’t stop there but by 2027, 62% of market share would be contributed by online marketplaces.
1. Overall E-commerce Growth
- Global sales projections:
A whopping $7.4 trillion is predicted to be reached by 2025, which leads to a 74% increase from 2020’s $4.2 trillion in global ecommerce sales.
- Continental growth rates:
North America is marked to cross $1 trillion by 2025. This market is dominated by the US, Canada, and Mexico, with the USA leading. The projected CAGR is 8-10% for the forthcoming years.
2. Product category growth
- Mobile Commerce:
With the penetration of technology, the electronics industry has experienced a pricing revolution. As a result, mobile commerce is expected to drive more than $710 billion in sales by 2025.
- Social Commerce:
The integration of social media into ecommerce platforms is estimated to exceed mobile ecommerce, reaching a staggering $1.2 trillion by 2025.
3. Country-specific growth
- China:
A significant portion, that accounts for over half of the global ecommerce retail sales, is set to reach $3.3 trillion by 2025.
- Turkey:
It has become the fastest growing ecommerce market globally. The projected CAGR is 11.58% between a 5 year period from 2024 – 2029.
Multi Vendor Ecommerce Website Features List
1. Vendor Management
The solution offers a separate interface for vendors to feature or edit, view, and manage their product details, order details, and transactions. There are various functionalities added within the vendor panel for categories and brand management to help purchasers browse different brands and shop by brand.
Over 80% of ecommerce marketplaces globally use a separate vendor interface to manage products, transactions, and order details, highlighting the importance of streamlined vendor management for operational efficiency.
2. Customer Management
With this module, you get a particularly intuitive interface that permits customers to quickly search and browse the products they’re trying to find. This customer management helps in understanding and catering to their overall shopping experience.
80% of customers expect personalized experiences when shopping online. Advanced customer management systems with intuitive interfaces improve the likelihood of repeat purchases by 70%.
3. Marketplace Catalog Management
Products are the lifeline of any marketplace. You’ll add products from the seller through the admin panel. You’ll also create a product catalog for multiple brands and products from the backend. The product catalog can be managed by the admin or the seller by performing actions like adding, editing, or deleting.
82% of shoppers look for a wide selection of products from different brands before making a purchase, making effective catalog management crucial to attracting a diverse customer base.
4. Multi-vendor website Orders Management
Order management is a vital part of any business owner’s operations. Webnexs will be a one-stop solution for managing order details, order transactions, and other order-related activities, which can be managed from the seller panel, and the admin can manage the seller’s orders from the admin panel.
70% of e-commerce businesses experience a 25% increase in operational efficiency by streamlining order management across multiple vendors. This helps reduce errors and improve overall customer satisfaction.
5. Customer Support
To provide the best customer service, the solution is enhanced with customer care management, where vendors can manage tickets and complaints and resolve their customers’ problems simply and effectively.
93% of customers are likely to make repeat purchases if they receive excellent customer service. A streamlined customer support module, like ticket management, can improve customer retention rates by 40%.
Visit Here: 8 Steps To Build an Ecommerce Marketplace Website Features like Amazon
6. Advanced Search & Filter Options
Providing customers with an efficient search box improves their shopping experience. So, this solution helps customers quickly look for the merchandise they’re trying to find.
70% of online shoppers say they would prefer to leave a site if it doesn’t have an effective search option. Advanced search and filtering improve the shopping experience, reducing cart abandonment by 20-30%.
7. Promotion Management
You can create promotional offers to satisfy your business goals and brand promotion. Promotions are often made on the fly, and simply apply and obtain hassle-free outcomes.
45% of online shoppers are more likely to make a purchase when they see discounts and promotional offers. Marketplace owners can see an increase in sales by up to 25% with efficient promotion management systems.
8. Returns and Refund Management
The RMA of the solution is designed to effectively regulate returned transactions, ensuring the best customer service for the purchasers.
30% of all online purchases are returned, and an efficient return management system can reduce processing times by 50%, leading to improved customer satisfaction and retention.
9. Dashboard & Reports
Webnexs multi-vendor marketplace solution dashboard is designed to accumulate analytical information. The dashboard is often customized to put different items through drag and drop UI formation. You’ll also get detailed reports on various crucial aspects of your marketplace to form important business decisions.
70% of business leaders use data-driven reports to inform key decisions. A customizable dashboard with detailed reports helps marketplace owners make better business decisions, improving revenue by 15-20%.
10. Payment Gateway APIs
The ecommerce solution offers major payment gateway connectors, enabling you to run your business with no hassle. All the main payment gateways support modern security measures that help build the customer’s confidence while paying online.
87% of online buyers prefer using secure payment gateways that offer seamless and fast payment experiences. Ensuring secure payments helps increase conversion rates by 10-20%.
11. Third-Party Integrations
The solution features a rich set of API’s and therefore the workflow is meant to effortlessly perform third-party integrations.
65% of eCommerce platforms integrate with third-party tools for payment processing, customer relationship management (CRM), and inventory management to enhance business operations, driving operational efficiency by 30%.
Visit Here: Best 15 Unique Ecommerce Marketplace Website Features
Marketplace Website Features And Benefits Of Webnexs Multi Vendor Platform
- Built with Headless Ecommerce, the World’s best ecommerce platform
- Improved Customer Engagement
- Attract More Traffic to Your Online Store
- Accelerated Profits
- Best ROI
If you’re about to kick-start the newest technology, ecommerce marketplace website features-packed store like Amazon, simply Choose Webnexs Multi-Vendor Marketplace Solution.
