Multivendor marketplace is an online setup where persons, shops or multiple vendors sell their services and products I accordance with a business model. The best physical world analogy for a multi-vendor eCommerce marketplace is a commercial mall. In a mall, a consumer gets access to multiple products and services like clothing, food, entertainment, etc. all under one roof.
A multivendor marketplace plays the exact role for the virtual shoppers. The admin of the marketplace is to look after transactions and drawing customers whereas tasks like manufacturing and shipping is to be handled by third party or the vendors themselves.
Your Magento multivendor marketplace software increases the efficiency of businesses by widening their access to the customer and thereby enabling them to sell their products and services to the consumer directly. This eliminates the process of maintaining and holding stocks which otherwise is a very tedious job. ‘Dropshipping’ method is the name given to this supply chain management system.
A marketplace solution serves to boost revenue manifolds, if put to application appropriately. The ecommerce market is a dynamic place where parameters change almost every day. Being a fiercely competitive market ecommerce firms are constantly on the lookout for better options. A multivendor marketplace has several advantages over its predecessor single vendor marketplace. A few of those benefits are discussed below and how that helps an ecommerce business maximize its potential.
To the business owner
- The owner or the admin of the marketplace can charge commission on the products and services sold by the vendors on their marketplace. The business module of a marketplace thus enables charging commission as additional charge and therefore increasing profitability rate.
- Naturally, commission earned from vendors leads to rise in profits since the input required is virtually zero and taken care of by the vendor themselves in exchange for using the marketplace for their products.
- Makes the entire process of buying transparent as the products are bought directly from the manufacturers and therefore facts like cost of commodities and stock quantity are all clearly known and open on platform that has an open atmosphere.
- A multivendor marketplace opens up new avenues for both suppliers and purchasers to explore and form new business relationships within and outside the supply chain community.
- It removes the time barrier that challenges a business which operates across multiple geographies since there is no closing hours for an online marketplace.
To the vendors
- Vendors that are new to the market or operate on a small scale become of independent of the need for a budget to build their own marketplace. When they become part of a multivendor marketplace owned a bigger business they can not only gain valuable perspective on the market but also in some cases use the features offered by a big firm multivendor marketplace software, like shipping.
- For small scale vendors it might be unrealistic to invest a huge amount in writing a multivendor marketplace script which can be backbreaking burden on their already small marketing budget. Thus, joining the marketplaces of bigger players like Amazon, eBay, etc. where they only need to focus on their product as rest is handled by the marketplace owner, is a far sounder option.
- The newer vendors are brought in level with the older vendors as an environment of uniformity is created by an online marketplace.
- It is an entirely new sales channel that markets the entire marketplace as a whole and thus equally advertising all vendors and their products.
- It erases international boundaries in selling products across the globe as merchants from various markets across the world are brought on to a common platform for trade.
To the consumer
Consumers are one of the most benefitted with facilities like best deals that provide the highest quality at the best prices, the ability to compare contemporary products without visiting multiple websites and the option of establishing an exclusive business partnership with the best vendors in the business. The prices are updated in real time according to product availability thereby giving the customer the fairest deals.
Thus, a Magento multivendor marketplace helps not only small but even big sellers attain the maximum potential.
Rakesh Jain is a CEO and Co-founder of Mobicommerce, an eCommerce website & mobile app development company having a team of best app developers who deliver best eCommerce solutions mainly on Magento and PrestaShop platform. He regularly contributes his knowledge on the leading blogging sites. You can connect with him on Twitter.