Is multi vendor marketplace a profitable model in 2024 and beyond

Contemplating your decision about opening a multi vendor marketplace ecommerce business? 

Don't know if the business model is profitable going ahead in 2024? 

Well, building a marketplace website is far more easy, time-saving, and cost-effective.

And with the boom in ecommerce, it presents the easiest way to leverage the astronomical market growth.

Sample the forecasts for ecommerce growth and we further check how the marketplace model is the best fit to reap the benefits.

• 95% of all purchases are estimated to be done through ecommerce by 2040
• 48.7% is the expected user penetration in the global ecommerce market by 2028
• $150 billion will be spent by online shoppers in India by 2025 
• 427 million is the predicted number of online shoppers by 2027

Source: Statista  

The astonishing growth of the ecommerce has certainly redefined the shopping habits of customers. To align your brand with the growth potential of the ecommerce industry, you need to create a marketplace website that aligns with the needs of your customers. 

Multi vendor marketplace - A complete guide 

A multi vendor marketplace is a zero-inventory business model where the brand owner does not need to maintain inventories but focuses on onboarding vendors and sellers. The vendors who bring their inventories manage their products, orders, and shipments of the orders they receive. The admin is responsible for managing the marketplace and looking after the marketing and brand-building aspects of the business. 

Why do customers prefer multi vendor marketplace 

Well, 95% of online shoppers have already used a multi vendor marketplace. The new age tech-savvy online shoppers prefer to shop from brands that offer them a vast product range and multiple sellers to choose from. 

At marketplace websites like Amazon, Flipkart, and eBay, customers find exactly what they are looking for, from lots of options to differential pricing, from fast shipping to unmatched customer support, and much more. As the marketplaces have redefined buying habits, shoppers come flocking to marketplace websites, making it one of the most successful ecommerce business models.     

Here are the top reasons why customers prefer to shop from multi vendor marketplaces:

• Wide variety of products to choose from at competitive pricing
• Reputed brand name with timely order delivery, transparent returns, and refunds
• Personalized experience for a seamless shopping journey
• Personalized relevant pricing and loyalty rewards
• Regular offers and discounts to keep the buyers engaged with the brand
• Multi channel quick support services  

Why should enterprise businesses go for multi vendor marketplace 

Marketplace websites have become the go-to shopping channel for customers in 2024 and beyond. With the kind of prices, options, convenience, etc, multi vendor marketplaces are driving customers in droves. Here is how customers behave while shopping online: 

• $8.7 trillion of sales forecasted via multi vendor marketplaces by 2025
• $350 billion GMV of Indian online marketplaces by 2027
• 75% of frequent online buyers wish their favorite retailers had marketplaces
• 62% of all global ecommerce sales to be done on marketplace websites by 2027
• 88% of consumers have at least one marketplace app on their phone
• 57% of global online sales are done on multi vendor marketplaces

Source: Statista, Digital Commerce

With the immense growth of multi vendor marketplace in recent years, it is no doubt a profitable business model in 2024 and beyond. Enterprise brands benefit in several ways by building the best multi vendor marketplace platform for their business. 

Here are the top reasons why enterprise brands should go for a multi vendor marketplace

• No responsibility for sourcing and stocking inventory
• Fixed commission on each sale by multiple vendors 
• Freedom from managing orders and fulfilment
• Multiple revenue streams can be added to the marketplace
• Joint responsibility with vendors in managing end-to-end operations
• Enough time to focus and strategize business expansion and growth plans

How does the multi vendor marketplace work

A multi vendor marketplace is different from other business models in its working. Here is a step-by-step process to help you understand the end-to-end working of a marketplace:

• Vendors register on the marketplace as a seller 
• The vendors list their products on the marketplace website
• Customers browse through the products listed on the marketplace. These products can be from a single seller or multiple sellers
• Admin gets a commission on each product sold, which can be fixed or variable depending on the seller.
• Payments are directly transferred to the Admin’s account. Admin deducts his commission and sends the remaining amount to a single or multiple vendor accounts.
• Product shipping is handled by the vendor or the admin

7 compelling reasons to start your multi vendor marketplace

The multi vendor marketplace model benefits the admin, vendor, and the customers alike. While the admin does not need to invest in the inventory, the vendors need not worry about the maintenance of the marketplace. The customers enjoy the vast product catalouge along with other shopping benefits. 

Here are 7 compelling reasons to start your own multi vendor marketplace

Zero inventory cost

Scaling your business like procuring, warehousing, and creating an efficient supply chain from different locations is indeed a costly affair. However by setting up a multi vendor marketplace, brands can have a rich inventory at almost zero cost. You can easily onboard multiple vendors from different locations and create a rich inventory without having to spend millions of dollars. It is your sellers who bear the CapEx and other inventory costs. 

Offer a vast product catalouge 

When you build a marketplace website for your customers, you can onboard vendors from multiple locations who will bring their own inventory. Your store becomes the online version of a physical world market where multiple vendors come together to offer a vast product catalouge to their customers. Cherry on the cake is how customers love to shop from brands that offer them ease of buying from a vast product options to choose from.

Buyer affinity for shopping on marketplaces 

Did you know that 

• 48% of buyers prefer going straight to a marketplace website when shopping online
• 50% of consumers start their product discovery on retail sites like Walmart 

Well, now you know why multi vendor marketplace is a widely accepted business model for all types of industries. Customers love to hop on the marketplace for multiple reasons like better product variations, good quality of services etc. 

Easy to scale by adding new vendors

You can add any number of vendors on your marketplace without having to invest in the inventory. Customers love a wide range of products and sellers, and with the best multi vendor marketplace platform, sellers can easily scale by adding new vendors and expanding their product catalouges. With the help of an easy onboarding process, enterprise brands can rope-in new vendors in just a few easy steps. 

Less operational pressure   

With an online marketplace, brands do not need to worry about streaming the business operations. Right from managing inventories, to adding new products, and providing product catalouge updates and to handling the shipping processes, all tasks are taken care of by the vendors. When individual vendors take care of all the operations, the headache shifts from the minds of the business owners who can now sit back and focus on strategic business operations.

Multiple revenue channels

You can seamlessly add multiple revenue channels to your multi vendor marketplace. With multiple sellers on the marketplace, you can charge different levels of commission from them. You can earn additional income as every time a seller gets an order on your marketplace, you get a percentage of profit as commission. You can also add multiple revenue streams on your website by offering prime position, ad space, premium membership etc to vendors.

Easy to pivot to hybrid models

With the marketplace model, businesses get the scope and agility to easily combine two or more popular models and build a disruptive hybrid model to supercharge their brand’s growth. You can create a location-based multistore marketplace website for your business or start a D2C marketplace, etc. The online marketplace model can be easily combined with various other business models to build successful marketplaces. 

How does StoreHippo help build the best multi vendor marketplace platform 

StoreHippo is a SaaS-based multi vendor marketplace platform that helps brands across all industries take the online route. With the advanced features by StoreHippo, brands can create scalable ecommerce solutions and carve a niche for their brand in the ecommerce marketplace. 

Here are top 8 features to help you build the best multi vendor marketplace for your business. 

Advanced turnkey ecommerce solutions  

StoreHippo ecommerce solutions are powered by MEAN (MongoDB, ExpressJS, AngularJS and NodeJS) stack, the most scalable technology stack currently available. StoreHippo helps build cutting-edge ecommerce solutions for marketplace websites of every scale and size, giving them the freedom to experiment, innovate, and scale with the powerful MACH architecture. With the unmatched flexibility and inherent scalability from StoreHippo, you get a competitive edge over other players in the ecommerce market. StoreHippo also offers a fully hosted and managed ecommerce solution with built-in solutions that helps you create disruptive hybrid business models. StoreHippo comes with battle-tested solutions for B2B, B2C, D2C, B2B2C, quick commerce and other hybrid business models helping brands to go to the market in record time.                         

Complete vendor management solutions 

StoreHippo comes with a comprehensive and easy-to-use vendor management solution that offers a quick and easy vendor registration process. It creates a unique vendor account for each seller to manage their everyday business. 

With StoreHippo, the best multi vendor marketplace platform, the admin can seamlessly manage the vendors, overview their business, approve or reject their products, etc right from the admin dashboard. StoreHippo also offers an adaptive payment feature that helps you divide a single payment made by a customer into multiple sellers as well as admin.

Quick omnichannel solutions

StoreHippo is built on mobile-first technology that helps brands build Android and iOS mobile apps directly from the admin dashboard without the need for coding and at zero additional costs. StoreHippo also comes with built-in apps for delivery boys, vendors, and admin to help them manage their business operations on the go. 

Marketplace websites built by StoreHippo are also PWA stores that look, feel, and work like mobile apps even on entry level devices. StoreHippo also comes with ready-to-use omnichannel enterprise ecommerce solutions that cater to your brand’s multi-channel selling needs. By going omnichannel, you can create a personalized customer experience on all the channels and add new customer touchpoints seamlessly using the same backend logic and APIs. 

StoreHippo helps you create consistent buyer journeys across multiple channels for your multi vendor marketplace and centrally control all your sales channels. With channel-specific insights, you can leverage data-driven strategies on the most profitable channel.

Personalized shopping experience 

StoreHippo the best multi vendor marketplace platform is built on the decoupled headless architecture that can be tweaked inside out. You can seamlessly implement multi-level personalizations on your marketplace like building multiple storefronts/sub-stores for different locations, audiences, or different categories. You can also customize your shipping solutions and digital payments, personalize the content with StoreHippo’s multilingual feature, personalized the product pricing, store designs, discounts, etc. 

Seamless integrations

StoreHippo helps brands seamlessly integrate your marketplace website with the software of their choice and build innovative ecommerce solutions for their brands. The headless APIs of StoreHippo helps brands manage their business with hassle-free and quick integration of software like CRM, ERP, accounting, and so on. Brands can integrate with multiple delivery partners, payment channels, chatbots, live chat, etc. to offer a seamless shopping experience to their customers. StoreHippo also comes with 120+ built-in integrations that integrate easily with the preferred software and service providers.

SEO and other marketing tools

StoreHippo offers a gamut of marketing features to help brands scale their business and carve a niche in the ecommerce industry. With StoreHippo’s easy-to-use SEO tools, you can position your multi vendor marketplace to rank higher on SERPs. You can easily create unique URLs for pages, meta titles, meta descriptions, meta tags, keywords, and more right from your admin dashboard and gain more organic footfalls. With the powerful built-in discount engine from StoreHippo, you can offer multi-level discounts and create personalized coupon codes for your customers. You can also recover abandoned carts with real-time personalized push notifications. With StoreHippo’s seamless integrations, you can also integrate with the marketing tools of your choice. 

Integrated logistics support 

StoreHippo the best multi vendor marketplace platform comes with a comprehensive shipping solution that offers the best logistics providers. You can integrate multiple delivery solutions from the 30+ pre-integrated logistics providers to create a streamlined shipping process on your platform. StoreHippo enterprise ecommerce solutions also come with a comprehensive delivery boy management system to help you align your chain of delivery boys for efficient delivery. 

Multiple payment channels

StoreHippo comes pre-integrated with multiple payment options for your marketplace website. With StoreHippo’s 60+ pre-integrated payment gateways, you can give your customers the most smooth and secure payment experience and boost your conversions manifold. You can integrate with multiple payment gateways so that your customers can pick and choose from their preferred payment options like COD, netbanking, credit/debit cards, digital wallets, etc. 

Conclusion

A multi vendor marketplace is the best shot going ahead in 2024 that can be positioned to become a success story. The marketplace website business model is a virtual goldmine that comes with a host of benefits for your enterprise business. You get the freedom from maintaining inventory and can still offer a vast product catalouge to your customers by onboarding multiple vendors.   

Built on cutting-edge technology, StoreHippo makes it seamless to go to market in record time. The plug-and-play solutions from StoreHippo the best multi vendor marketplace platform can be used across industry verticals and customized easily for your unique brand requirements. You can reach new markets and take your online business many notches higher by leveraging advanced ecommerce features from StoreHippo. 

Are you all set to adopt the multi vendor marketplace business model to hack growth in 2024 and beyond? Explore the wide range of enterprise-grade features from StoreHippo by starting your 14-day free trial now.