Multi-vendor Marketplaces (MVMs) gained huge popularity in recent years, and they don’t stop. When managed properly, a multi-vendor marketplace brings many benefits and can be a great way for companies to make a profit and join a competitive market. The general idea behind a multi-vendor marketplace is to create a platform where many vendors can sell their products, and the marketplace owner collects a commission on these sales.
Shopware is an eCommerce platform with many functionalities. Although the idea of the multi-vendor marketplace with Shopware is pretty new, it is already possible to implement this solution and become a marketplace owner.
Firstly, let’s take a closer look at what exactly a multi-vendor marketplace is.
What is a multi-vendor marketplace?
Simply speaking, a multivendor marketplace is a platform that provides an environment for not one, but many merchants to sell their products or services. It can be compared to a shopping mall consisting of many independent shops with their own products.
In this solution, the responsibility to run each store is up to the particular vendor; nonetheless, storing the products, processing delivery, and accepting payments lie on the side of the marketplace owner.
It’s up to the marketplace owner, whether such a marketplace will specialize in a particular category, for example, beard cosmetics, or will be a platform that offers a variety of products, for instance, clothes, cosmetics, and fitness equipment.
It’s a convenient solution for everyone, as the owner can offer a variety of products to a bigger audience, customers can find their favorite items in one place, and sellers get a dedicated place for their products. Moreover, in the case of an eCommerce multi-vendor marketplace store, the owner does not have to worry about maintaining inventories or items’ descriptions, as these processes are taken care by the sellers.
Application of multi-vendor marketplace in eCommerce
- Selling a wide variety of goods
- Different vendors selling products in one place
- Solution for B2B companies that lose time by searching for a product by going through multiple stores when they can find everything in one place
- Greater accessibility of products results in a bigger number of reviews that are helpful for the customers
- Access to a wide base of sellers and buyers
Benefits of a multi-vendor marketplace approach
As previously mentioned, the multi-vendor marketplace solution can be beneficial for everyone. Due to that fact, many businesses have changed their eCommerce websites into multi-vendor marketplace platforms. Here are some advantages of this approach:
Great variety of products
Products available in multi-vendor marketplace stores come from multiple vendors, which is connected with a large number of products available for sale. This, in turn, helps to reach a bigger customer base and increase sales. Importing products from only one vendor severely limits a company’s possibilities to increase sales and get more attention.
Since each seller is responsible for their shop, the marketplace owner does not have to spend resources to manage the stores. Therefore, it is a very convenient and cost-effective option, especially for smaller companies.
Scalable profit model based on the value of each order
A marketplace administrator can earn money by taking a commission fee on each successful transaction between buyers and sellers in a multi-vendor marketplace, as many vendors are involved. However, it still depends on the marketplace’s model.
Apart from the advantages, the owner must remember to implement a successful promotion strategy and appropriate solution, for instance, choosing the right multi-vendor website design company.
The network effect is the biggest benefit for business owners using a multi-vendor marketplace approach. The network effect drives the growth of the multi-vendor marketplace market. When a particular company experiences a network effect, its value grows along with the number of customers. An increase in the number of sellers also widens the choice of products and affects the price competition, which helps to attract potential clients. More clients mean more traffic on the platform, which, in turn, results in attracting more sellers.
When a new seller registers on a platform, its clients join along with it. Then, such clients get access to the other sellers on the platform. Thus, they contribute to developing a massive network of sellers and buyers in one place.
Examples of popular MVMs
eCommerce platform very popular in Poland. It offers selling miscellaneous products, ranging from perfumes to car parts. A seller can be an official vendor, as well as the average user.
Starting from a bookselling company, it is now the largest multi-vendor marketplace.
One of the first digital marketplaces offering bid systems and customer-to-customer experience.
With a massive customer base, Facebook launched its eCommerce platform. This marketplace allows one to sell almost any product that can additionally be promoted by using paid tools available within the platform.
Types of MVM
The first type of multi-vendor marketplace is a standard eCommerce platform that offers selling various products, e.g., Allegro or Amazon. The second type of multi-vendor marketplace is a platform where people offer their services, e.g., Upwork or Fiverr. Next, a platform can be used to sell both products and services, e.g., Facebook.
Moreover, a multi-vendor marketplace can also divide into open-source and on-premise options. As usual, this approach has its pros and cons.
Advantages of open-source/on-premise solution
Most importantly, there is no need to code everything from scratch. Using an already existing code for basic functionalities can help to reduce the time necessary to launch the platform. Then, if you can program, you can customize these functionalities.
Disadvantages of open-source/on-premise solution
The first main disadvantage of these solutions is the technical complexity. Using open-source code and frameworks requires particular knowledge. If a company doesn’t have a developer’s team, hiring them may be expensive. The second disadvantage is limited scalability. Implementing additional functionalities can be limited by the open-source framework. Lastly, the cost of maintenance can increase over time.
How to implement a multi-vendor marketplace in Shopware
The first option is to download a plugin available in the Shopware Store, which is dedicated to transforming a standard Shopware store into a multi-vendor marketplace. With this plugin, any customer can become a seller and sell their items. Nonetheless, this module is usually just a base, and custom changes need to be implemented by the developers.
Another option to implement a multi-vendor marketplace in Shopware is the dedicated project implementation by a developer’s company.
Shopware’s help during the implementation
First of all, Shopware can propose a development company that will help with the process of creating and implementing the project. Especially vital during the implementation may also be the help of a community that can share their experience with the multi-vendor marketplace and answer your questions. The third option is to buy a commercial version, for example, Shopware Rise, where we get access to more advanced functionalities focused on B2B (e.g. Elasticsearch).
Multi-vendor marketplace limitations
When creating a multi-vendor marketplace platform, not only in Shopware but on any other platform, the owner must know whether the customers or the sellers will be the first to bring on the website. As previously mentioned, buyers will be attracted by many sellers and vice versa. When you are building such a platform, you will need both sides. Moreover, the owner must focus on market liquidity. The best way to achieve this is to focus on a niche and then expand the platform only when it succeeds. What’s more, building trust is another crucial factor. Without that, the platform won’t get a loyal customer base.
The multi-vendor marketplace is a great business model, although the competition in the market is huge. It is a solution that offers a variety of possibilities, bringing together buyers and sellers in one place. Shopware is able to work with demanding business models, including multi-vendor marketing. Although implementing this solution with Shopware may be complicated and require a team of specialists, a dedicated multi-vendor marketplace plugin and its functionalities can save a lot of time and trouble.
If you are considering this solution for your business, contact us, and we will be happy to provide you with further assistance. Our team of experts can help you set up a multi-vendor marketplace, and tailor the solution to your specific needs. This way, you can quickly get your multi-vendor marketplace up and running and take advantage of all its features.