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Multi-Vendor eCommerce Website is the best eCommerce business concept when implemented right. The big players in India are Flipkart, Amazon & Snapdeal, but you can find favourite niche multi-vendor sites such as ThemeForest or TemplateMonster.

The idea behind multi-vendor sites is to allow anyone to create their semi branded store under your eCommerce marketplace website and list their products for sale.

What is Multi-vendor eCommerce?

Every seller/vendor or merchant has a separate shop area inside your multi-vendor eCommerce platform. The platform owner only bothers with order processing, tracking and payments, and charge commission to vendors.

Sometimes referred as an eCommerce marketplace, multi-vendor eCommerce websites shift the task of maintaining inventories, logistics, product descriptions, and updates to individual sellers by giving them a system to manage it all as per their convenience and goals.

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When customers come to your multi-vendor site they can pick one item from “Company A” and another from “Company XYZ”, and it is all processed through the same shopping cart. The multi-vendor shopping cart system divides the payments behind the screen between two vendors. This ecosystem of people buying and selling in one place helps customers find the more diverse range of products, and you, the site owner can make some big bucks through commissions.

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Benefits of Multi-Vendor eCommerce Website?

Is a transformation age of online shopping, which is changing day-by-day as eCommerce entrepreneurs realize that investing in multi-vendor eCommerce store is a better deal. E-commerce investors, as well as business owners, are favoring multi-vendor eCommerce model (also referred as online marketplaces) over regular online stores because of numerous benefits.

Let us explain you, that what is a multivendor eCommerce solution and why entrepreneurs like you the choice to start an eCommerce business on multi-vendor eCommerce model?

1) Sell a vast range of products:

Numerous vendors feature products sold on a multi-vendor store. Any eCommerce store that provides a huge variety of goods is the bounce to generate traffic and sales quickly.

2) It shifts half the headache:

Taking care of logistics, inventories, product additions & upgrades, pricing and various other details that come with running an online store require big team and efforts. Multi-vendor store shifts these necessary tasks to your marketplace sellers because ultimately your sellers have to take care of these things.

3) Lesser expenses:

As every seller will be managing his/her products on their own; you don’t need to hire people to do it. Your team can spend more time on answering customer’s queries, scaling and marketing. With an experienced small team, you can drastically bring down expenses.

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4) No inventory:

Warehousing and human resource related costs can break the back of any eCommerce startup. Starting a multi-vendor store will solve this big startup crunch as sellers will take care of inventory related complications.

Multi-Vendor eCommerce is best eCommerce business model?

Multi-vendor eCommerce website or eCommerce marketplace has many advantages over single-vendor e-commerce store like, extensive, product range, better adaptability, simple business administration, less investment and better returns. It’s not just by chance that world’s biggest e-commerce websites are all based on the multi-vendor business model, and they are successfully operational from several years in a row.

Doors to building the next billion dollar company in eCommerce domain are open, here everything is running online, and brick and mortar businesses are now slowly towards death.

Your first few steps to start Multi-vendor eCommerce websites:

Your attention on the more potent things will support your e-commerce business idea. You should observe the critical steps of growing a multi-vendor website into an efficient business, below are few key steps which you may follow to be on the right track to start your multi-vendor e-commerce platform.:

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Deciding a Niche

Looking into the present market scenario, it is ideal for you to develop e-commerce business targeting a particular or bunch of product or segments and stay out of the crowd.  You must dedicate the right amount of time to discover, which niche is unique, try statistical surveying to know the different thoughts and regions where those products can be sold.

Feasibility Study

Judge the possibility of the thoughts before dreaming of business development. The eCommerce boom has led to some online multivendor eCommerce platforms, which span across numerous industries.

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Moreover, it has also become highly feasible to start your eCommerce company by just choosing an e-commerce platform. However, with increasing competition you have to be choosy and not become a clone of big competitors, be ready for change and stay out of the crowd.

Business Planning and Research

For any business, planning is the key to success. It helps you to determine the brand itself that makes a place in the hearts of its audience. Before jumping into anything, there are couples of things to remember, to consider things like venture model, sources of income, marketing strategy and more in the planning stage before settling up the marketing plans.

Since it is vital for e-commerce business to know where its potential clients? Where are they? What is the best medium to reach them?

Website Development

In simple words go ahead with multi-vendor e-commerce platform (shopping cart system) which allows you to own, enhance, add new features and customize the platform according to your business needs and serve as a long-term solution. There are many e-commerce solution providers in the market but make sure you choose the best and the most affordable solution and do not burn your pocket as you need more and more money to promote your new venture.

You can plan, outline and build up your multi-vendor e-commerce website without any hard work when you hire an end-to-end eCommerce solution provider.

We are not going to write anything about the last and most important step which is promotion because we think promotion or advertisement depends on your market segment/niche. However, we suggest you hire a digital marketing agency as they are expert and they can help you in a better way to get your first few sales.

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Why eCommerce Retailers are shifting to Multi-Vendor Marketplace Modal

  • Amazon generated 22.99 billion U.S. dollars in third-party seller service revenues in 2016 alone, as compared to 16.09 billion U.S. dollars previous year. Seller-service is also important revenue segment of Amazon marketplace platform.
  • Customer Retention: As per the recent studies, In comparison to single vendor eCommerce stores, a multi-vendor marketplace helps in customer retention up to 89%. Because of the large catalog based offered by multiple sellers on one platform.
  • Revenue Boost: Statics reflects that sales through Multi-vendor eCommerce marketplaces will account to almost 3 times as compared to single vendor online stores by 2021.
  • Huge Traffic: Multi-vendor stores helps in grabbing more traffic in comparison to single vendor online store.
  • High Conversion Rates: Multi-vendor marketplaces offer a variety of products so that your customers need not look back to other stores, this increase in customer loyalty and conversion rates.
  • Earn High Commissions:More varieties, more offerings, more sales, therefore more commissions in your pockets.

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Reasons to Sell on Multi vendor eCommerce Marketplace?

Merchants and businesses find online multi vendor eCommerce stores a better place to showcase or sell their stuffs. When it comes to sales and revenue generation, below is the top 4 Reasons to Sell on Multi vendor eCommerce stores;

1) Readymade traffic

Well established multi vendor eCommerce stores attract huge amount of traffic and opportunities of sales get double. Creating an online store and investing in marketing will consume crores of rupees but you still wouldn’t be able to attract as much traffic. This way, setting up a store on a established multi vendor eCommerce store is always a better deal.

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2) Suitable for sales minded merchants

Product manufacturers and sellers who are more concerned about making profits rather than creating a brand usually go for multi vendor eCommerce platforms.

3) Small setup costs

Creating a website to sell your products and then investing in marketing means spending crores of rupees. Online marketplace leaders get you started without any monthly rentals of fee, you just need to pay small selling fee only when you get sales.

4) Flexibility

Seller like you on multi vendor eCommerce platforms can manage product details, prices, and areas of delivery, make additions, and updates as per their convenience. This flexibility comes along with no requirement of technical knowledge.

Popular eCommerce brands using multi-vendor eCommerce model

Some of the biggest eCommerce brands in India are using the same multi-vendor eCommerce model. Some of the well-known Indian brands are as under:

Flipkart.com: The largest online marketplace in India doesn’t need an introduction, founded in 2007 by Sachin Bansal and Binny Bansal. It is registered in Singapore, and it operates in India, where it is headquartered in Bangalore, Karnataka.

Snapdeal.comSnapdeal is an online marketplace, based in New Delhi, India. The company was started by Kunal Bahl, a Wharton graduate as part of the dual degree M&T Engineering and Business program at Penn, and Rohit Bansal, an alumnus of IIT Delhi in February 2010.

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Jabong.comJabong.com is an Indian fashion and lifestyle e-commerce multivendor portal, selling apparel, footwear, fashion accessories, beauty products, fragrances, home accessories and other fashion and lifestyle products. The company is headquartered in Gurgaon, NCR.

What is fueling the eCommerce marketplace Platform?

eCommerce entrepreneurs have become more interested in Multi-Vendor eCommerce Store rather than a basic online shop. Below are the reasons for the marketplace shift;

  1. Sell vast range of products: Some vendors feature the products sold on a multi-vendor store. Any eCommerce store that provides a huge variety of goods is the bounce to generate traffic and sales easily.
  2. It shifts half the headache: Taking care of logistics, inventories, product additions & upgrades, pricing and various other details that come with running an online store require the big team and efforts. Multi-vendor store shifts these necessary tasks to your marketplace sellers because ultimately your sellers have to take care of these things.
  3. Lesser expenses: As every seller will be managing his/her products on their own, you don’t need to hire people to do it. Your team can spend more time on answering customer’s queries, scaling, and marketing. With an experienced small team, you can drastically bring down expenses.
  4. No inventory: Warehousing and human resource related costs can break the back of any eCommerce startup. Starting a multi-vendor store will solve this big startup crunch as sellers will take care of inventory related complications.

Is Open Source Multi-Vendor eCommerce is Any Good?

1) Requires dedicated staffs

Obviously, if you use something free you need to take care yourself. Most small businesses like you, who end up choosing an open source eCommerce solution will have to maintain entire system. This will require expert team in order to make sure that the platform is optimized and running smoothly.

2) Security Issues

Most open source scripts can not only be downloaded and used by people with good intentions but also by malicious hackers as well. Its important for business owners to realize that open source solutions provide the complete “blue prints” to how the system works and operates; which is like giving a thief keys to your home in order to break in and steal everything.

3) Hosting

Any open source technology will require hosting which depending on your needs can increase the total cost of ownership. As a small business you should make sure to go with a reputed web hosting provider and look out for overage charges on space and bandwidth packages. Also, eCommerce scripts requires high performance servers and good infrastructure.

4) Updates

Open source scripts are constantly gets updates to fight with malicious codes and release patches and new updates as-well. Such updates, usually contain changes to security vulnerabilities which should be implemented in a timely manner. These “upgrades” can have issues working with 3rd party modules or “apps” that you might have installed previously causing more time for your development team or having to bring in expensive consultants.

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5) Technical Support

In most cases open source script provider offer no support unless you are willing to pay for it. This is normally how the company makes most of their money. Meaning, the company charges substantial rates per incident or requires you to be on some kind of monthly or yearly support subscription. In either case, this is an important factor to consider when choosing to go with an open source eCommerce product.

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