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Multi vendor marketplace- Benefits and challenges

Taru M. Taru M.
Published: 24 Aug, 2020

Multi-vendor marketplaces such as Amazon, eBay, and others have become a first choice for online buyers to shop for quality products and get these delivered to their doorstep within the specified time frame. Before we delve into benefits and challenges, we are going to focus on the basics.

Online shopping of late is a trend that lets people buy their daily needs from the comfort of their bedroom and get delivery at their doorstep. Thanks to the availability of various eCommerce websites that gives buyers a choice for purchasing and thus, it prompts them to go for online shopping.

According to Statista, eCommerce sales are expected to reach up to $4.2 trillion by the end of the current year, and it is expected to reach up to 6.5 trillion by the year 2023. This is an eye-opening figure for many eCommerce businesses who rely on multi-vendor marketplace platforms for their sales.

This is also encouraging data for eCommerce business owners who are often desperate to implement the latest trends to improve their sales and ROI. Therefore, they should focus on consumer behaviour.

They should be aware that customers wish to access the marketplace that lets them purchase everything under a single roof, no matter what products they seek to purchase. This increases the importance of the term’ term’ multi-vendor marketplace”, which every eCommerce business owner is expected to be aware of.

What is a Multi-Vendor Marketplace?

The credit goes to the continuous technology revolution that brought the term online marketplace for catering to specific requirements of consumers and lets them find easily whatever they are looking for.

The primary benefit of developing a marketplace is that it allows customers to select different options before they finalize anything to shop. Apart from this, the multi-vendor marketplace can also cope with the fluctuation of consumers’ shopping tendencies, demand fluctuation, etc.

A multi-vendor marketplace is beneficial for customers and is also an excellent option for the vendors to sell their products. Developing their eCommerce store can be a bit expensive, and they might not be able to provide all the features that big multi-vendors marketplaces like amazon are providing. 

A multi-vendor marketplace gives vendors an extreme opportunity to sell their products around the whole country and sometimes globally. 

Some of the prominent Multi-vendors marketplace development platforms are available today in the market, such as:

  • Shopify Multi-Vendor Marketplace
  • Magento Multi-Vendor Marketplace
  • WooCommerce Multi-Vendor Marketplace
  • Prestashop Multi-Vendor Marketplace
  • Yelo by Jungleworks Multi-Vendor Marketplace
  • CS-Cart Multi-Vendor
  • Yo! Kart etc. 

Benefits of Multi-Vendor Marketplace

Benefits of Multi-Vendor Marketplace

Let’s talk here about a myriad of advantages of having a multi-vendor marketplace for your eCommerce business.

Availability of Varieties of Products

As the name suggests, the multi-vendor marketplace is a group of many sellers engaged in selling a wide variety of products. It helps customers go through the available products to select the right products they are seeking to purchase. Customers also like to access the marketplace to discover multiple sellers of the same products that they want to shop for.

Boost Traffic

Boost Traffic

The availability of several vendors in a single marketplace lures customers. Rather than accessing different eCommerce websites for buying multiple products, customers prefer to access a single marketplace. It helps your multi-vendor marketplace generate higher traffic that brings excellent opportunities to improve sales and revenue.

Prevent from Inventory Maintenance

Maintaining inventory to cater to customers’ demands is reasonably necessary for the eCommerce business. It plays a vital role in making your business successful. But, in a multi-vendor marketplace, one doesn’t need to bother about maintaining inventory since it’s a group of multiple vendors.

And every vendor is concerned about maintaining its inventory to match its customers’ growing demands and expectations. As an owner, you only need to improve your website to scale up your business and grab multiple growth opportunities.

Reduce Operational Cost

An eCommerce business also requires a higher operational cost to run smoothly and successfully. But, operating a multi-vendor marketplace doesn’t need a higher price. The case is entirely different. It prevents you from investing your time and money in various essential works, maintaining inventory, product designing, logistic management, or others.

The marketplace needs to focus on improving its visibility, brand name, etc. Vendors are responsible for performing all these tasks. They should leverage social media platforms to maximize their reach among target customers across the world.

All they need to do is to make sure that their website is running smoothly. They need a small team to operate their marketplace and ensure its smooth function. This indicates that it tends to bring down the overall operational cost.

Earn Higher Revenue

Earn Higher Revenue

As mentioned, the multi-vendor marketplace lets buyers find everything to buy in one place because of the availability of a wide range of products. This brings an excellent possibility for buyers to get their desired products at the same time. And it brings good sales opportunities for businesses to earn higher revenue.

You can create and manage an online multi-vendor marketplace community, just like amazon and Alibaba, by just following these few simple steps:

Step 1: Define your budget (Pretty simple.. Hmm.)
Step 2: Do some exemplary research on your own. ( Make sure you know about the multi-vendor marketplace development platforms there are. We have already mentioned a few great multi-vendor marketplace development platforms above)
Step 3: Define your target customers. (Remember that as you are developing a multi-vendor marketplace, your customers are the vendors and not the buyers)
Step 4: Look for an eCommerce development company that will fit your budget, has a good number of years of experience in the domain, and has a strong portfolio. 

(Read our Step to step eCommerce guide that we specially designed to help new business owners who are looking to develop eCommerce store:

Step 5: Explain your goals to your eCommerce development company (in detail). And make sure you go for both App development and website development. 
Step 6: Once the eCommerce store development phase is over, now the fate of your marketplace will depend on the marketing. The better the marketing, the more you will attract the vendors to come and sell on your Platform. 

We have now shared the 6 simple steps in which you can develop your Multi-vendor marketplace. But now it is the time to give you a heads up on the challenges that you might face: 

Challenges for Multi-Vendor Marketplace

Like other businesses, a multi-vendor marketplace also faces several challenges that are mentioned below.

Maintaining Product Quality

No matter how many products your offer, customers will buy them only if they find your products are quality based. In the multi-vendor marketplace, different vendors are involved in selling products. And they all don’t maintain the quality of the products. This comes as a significant hurdle for the marketplace to maintain its firm brand name and constantly lure customers into buying its products.

Managing Customers

If customers find any issues about their products, they complain directly to the marketplace rather than the particular vendor. So, it’s the marketplace’s responsibility to resolve the issue.

It’s the marketplace’s obligation to do anything to resolve complaints while ensuring customer’s happiness. Be it product returns, refunds, or product replacement. Resolving a complaint is a time-consuming process, making it necessary for the marketplace to have a separate team to handle the case.

Competitive Prices

Since the marketplace accommodates a large number of vendors and enables them to sell their products, it’s a common objective for all vendors to get the maximum number of customers. Moreover, suppose two or multiple vendors offer the same products. In that case, all of them wish to be ahead in the race of getting maximum customers to maximize their sales and revenue generation.

This brings the price competition, which encourages vendors to keep the lowest price of their products. It affects the marketplace’s revenue, as if any products vendors sell at the lowest cost, then the marketplace also gets the lowest percentage of commission.


So, above are some most significant advantages and challenges of the marketplace. While developing your marketplace, you should be aware of these details to help you overcome the challenges and harness their maximum benefits to keep your business on the right track.

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Taru M. Author :
Taru M.

For over 18 years, Taru M. is a successful technology entrepreneur by profession and a tech enthusiast by spirit. She takes pride in offering expertise in her domain to business people's success across the globe. As a business woman and technology expert, she manages to keep her balance along with her family responsibilities. She did her masters in computers, and her work delivery shows the expertise of her education. Connect with her via Linkedin profile to know more about her exciting personality

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