Multi Vendor Marketplace is an entirely different business concept from the regular E-commerce Store, it works as a relationship infrastructure, providing tools for vendor and consumers to trade.
It is a three-party model. The customer of a marketplace is the seller, the one who presents his products and services on the marketplace while the customer of an e-commerce site is the end buyer
Marketplace Business Concept :
A marketplace is a platform where the products presented come from multiple sellers. The variety of assortment a marketplace offers is exactly what attracts customers.
Oftentimes, the marketplace operator does not hold any type of inventory, but helps the buyers and sellers to facilitate a transaction (handling logistics, facilitating the payment…).
Regular E-commerce Business Concept :
Regular E-Commerce is a one store website where a single vendor sells his products/services to multiple customers. As the website belongs to the seller, two parties are involved in the sale process (seller / buyer), and he is the one how take care of all the logistics.
How is a Marketplace different from an Online Store
There are several ways for selling online. Some retailers develop their own e-commerce websites, while others use online marketplaces.
If you are in doubt whether to choose marketplace or e-commerce website for your business, this comparison maybe will help you decide.
Marketplace :
| For Sellers : |
| 1- Large Targeted audience due to variety of products |
| 2- Provide the hole pack of features for buyer seller interaction |
| 3- Quick set up, a matter of hours |
| 4-Low or no costs upon setup, Charge commissions (5 to 15%) |
| For Buyers : |
| 1- Variety of products |
| 2- Feedbacks, more trusted by customer |
| 3- Buyers / Customer protection program |
E-commerce :
| For Sellers : |
| 1- store owner needs to attract traffic, perform SEO… |
| 2- Take care of store functionality |
| 3- Set up the entire site, time consuming |
| 4- No commission, seller pays for all the charges (hosting/maintaining the site online). |
| For Buyers : |
| 1- Limited products options |
| 2- Customer trust built from scratch |
| 3- No specific policies |
Marketplaces are great they allow you to cut down the costs, risks, and all the time needed to create a store. If you’are already an established brand it’s always a good idea to vary your distribution channels to reach a larger and new customers
Marketplace Opportunities :
- Costs on marketplaces are, significantly lower than the costs incurred in physical store.
- Reach more customers with minimal effort. Marketplaces success depends on the success of their sellers, so they invest in marketing to drive traffic and sales.
- Opportunities for brand expansion at a lower risk.
- Sell end of line or end of season products at much better prices than if they had kept the stock in their own stores.
- Great tool to test new products before investing significant resources in promotion.
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