Multi-Vendor E-Commerce

What is multi-vendor e-commerce?

Multi-vendor online stores (also known as marketplaces) can be a goldmine if done correctly, some of the big name sites you will have heard of are: Etsy, eBay or Not on the high street.

They are essentially one site selling products from a range of different vendors, each vendor can either have their own “storefront” within the main site, or the products from all vendors may be all bundled together into categories or even a mixture of both.

The website owner deals with order processing, tracking and payments, the vendors deal with fulfilment and shipping. Typically, the website owner either charges a flat monthly fee to vendors to allow them to list their products, or will charge a commission on sales.

This system is advantageous to both the vendors and the website owner. The vendors do not have to incur the considerable expense of creating and running their own website, a cost that all businesses could do without. They also save time and money by not having to deal with customers directly or investing in marketing. On the other side of the multivendor system, the website owner benefits from not having to source any of the products, hold any stock or deal with fulfilment.

What’s the Purpose of Multi-Vendor Ecommerce Store?

Multi-vendor marketplaces can be great for the customer, they can see a wide range of different products, and no matter who the vendor, one click and the product arrives on their doorstep, all from one single website.

Multivendor sites offer customers the kind of experience that would need a large company to run. It would need warehouses, buyers and distribution amongst other big overheads.

Instead a fairly small operation can run an e-commerce store with thousands of lines of inventory, the product range offered may be fairly wide ranging, or it enables more niche products to be offered together.The product range can be curated to offer a pre-selected range to the visitor, or can be open access, allowing anyone to list their products.

Another benefit of a multivendor site is that, in some cases, is it can become a community of vendors, working together for the benefit of all vendors. As long as their products are not competing, it makes sense to drive sales to the collective site, rather than smaller single vendor sites.

What’s the difference between single vendor and multi-vendor ecommerce?

A single vendor online store is just that, it’s one company providing all the products and all the related infrastructure to run the business, from the site software to payments and distribution.

Multi-vendor marketplaces are typically run by one company with all the product range coming from other companies, however in some cases the website owner may also have products listed for sale.

Should you use single vendor or multi-vendor?

This will depend on your aims for the site, its generally a decision that needs to be taken early when opening an online store, as the software choice will differ based on whether its multi or single vendor marketplace.