Our Enterprise beta is live! Apply here.
Learn More
The term 'multi vendor ecommerce' is getting thrown around a lot, in fact it's been getting thrown around a lot since online businesses took off in the last decade.
In this article multi vendor ecommerce is all we'll talk about but for the sake of clarity, we will mention single vendor ecommerce, just to get a better grasp on what multi-vendor ecommerce actually is and what makes it different from single vendor ecommerce.
Traditionally, when you went shopping, you would go to one store that sold everything you wanted. This was often referred to as single-sourceship, which means buying or sourcing from one place.
But then the internet came along and turned the business world on its head. After ecommerce took off, customers would visit a selection of online businesses before making their pick and finally decide on one they think is their best fit.
That's basically what single vendor ecommerce is - you search for a product in various websites, those websites are single vendors because they're hosting a single business. This model is considerably similar to a physical shop ran by an individual who takes care of the whole business (keep this analogy in mind as it will help you later in understanding what we mean by multi vendor ecommerce)
We've already said that there are two different models for selling products online. The first is what we call the “one-store” or the single vendor ecommerce model, where there is only one website from which customers can purchase the product. This is usually called an e-business or electronic business.
The second model is multi-vendor ecommerce or simply marketplaces, which is more common than the one-store model. In multi vendor ecommerce, there are several sellers of similar products who sell directly to consumers. Recall that analogy we just told you about, as this is the exact opposite. Picture a mall with many shops rented to businesses, that's what multi vendor ecommerce is but for the internet.
There are many advantages to the marketplace model. First, it speeds up the buying process. Customers do not have to search through multiple websites to find the best price. Second, it lowers the risk associated with purchasing goods. As a buyer, you will always know how much you are spending and the quality of the item.
However, this approach has its disadvantages. Multi vendor ecommerce requires that members be reputable in order to join; therefore, members must abide by certain rules like giving prior notice before changing the pricing on their listings and other requirements.
Furthermore, most markets have limited selection and offer either free delivery or reduced prices for bulk purchases. Product availability depends on the season, size of the batch produced, and the demand level for each type of product.
Therefore, using multi vendor ecommerce requires expertise in marketing strategy and knowledge of all processes involved (from production, shipping, packaging to listing). Only then can you achieve the highest sales volume and keep your competitors out of the loop.
Multi vendor ecommerce translates into lower operating expenses for the seller, because they do not need to maintain an internal technology infrastructure or full-time employees to manage an online presence.
Multi vendor ecommerce works well for small businesses with products that can stand alone without other competitors in the category. These are usually consumer goods like foods, beverages, cosmetics, health and beauty aids, supplements, pharmaceuticals, and medical devices.
For sellers of larger product lines that require technical support and maintenance, channel partners are willing to invest in the infrastructure required to sell their products globally. This partnership approach involves some risk since the channel partner takes on workload issues that would otherwise be dealt with by the retailer.
Today, more and more businesses have adopted the multi-vendor model of doing business. This means that there are multiple companies all selling the same product or service. The benefit of this approach is that it allows for competition to find prices that are lower than what the seller would charge individually.
Also, by having different suppliers, you can change your pricing structure as well. If one supplier charges too much, you can move back to another one. By having several vendors, you end up with many price options.
Finally, through parallel importing, larger retailers use smaller manufacturers in other countries to match the low prices they get from their US distributors.
The downside to this system is that if any vendor drops off the supply chain, you may not be able to obtain your product at the current price. You also need to keep track of numerous sales cycles, shipping times, customer complaints, etc..
When you sell products online, your success is dependent on many factors, including how much you charge for your goods, how large or small of a selection you offer, and how well you integrate with other systems such as payment processing, shipping, inventory control, customer service, marketing, etc.
All these things must work together smoothly to give your customers an excellent experience that will keep them coming back!
So how do you manage all this? You use multi-vendor shopping carts like Open Source Commerce (OSC) or Magento. These are flexible platforms designed specifically for businesses that buy in bulk.
They allow you to create different templates of your website so you can have one style for search results and another for product pages. They also help you organize your business into categories and sections. Last but not least, they make it easy to customize your site according to what works best for you.
These types of ecommerce software are very popular among larger companies because of the amount of support that comes along with it. If you’re just starting out, though, investing in one may be a bit beyond your scope right now.
There are several free shopping cart services you can choose from. Just because something is free doesn’t mean it isn’t good. It just means their cost is zero dollars. The better option is to join a group sale where lots of people share their content for nothing.
We hope this article was enough to break the ice, but if you would like to find out more, you can follow this link, as well as many others. The internet is flowing with useful information these days, so make sure you do your research before opting for the mall.
