Multi Vendor Market is a B2B,B2C Multi vendor market place

What is a multivendor marketplace?
A multivendor marketplace is an e-commerce platform that empowers multiple vendors to sell their products from one storefront. Multivendor store gives shoppers a huge catalog to choose from and provides sellers with a bigger base of ready-to-buy customers.

Think of multivendor platforms as shopping malls. A lot of sellers dealing in the same set of products under one roof.
The biggest difference between multi-vendor marketplace and regular online store is that prior has the technical capabilities to support multiple sellers but latter doesn’t.

Think Amazon and Ebay when you think of multivendor. Think bestbuy’s website when you think of a regular online store.

Multi-vendor marketplace business model

Multi-vendor stores have the technical infrastructure to support the listing and sale of thousands of products across a vast range of categories through a huge number of sellers. The multivendor business model is also known as the ‘zero inventory model’ since platform owners mostly don’t hold any product inventory of their own. This is another major reason why the demand for multivendor marketplace platforms is going up.

Here’s how multivendor business model works:

1-Vendor registers with multivendor store
2-Vendor has a dashboard to list and manage his product listings
3-Whenever a sale happens, store processes the payment and assists vendor with packaging as well as shipment
4-Store owner keeps a small commission from the product sold and credits the rest to the vendor
5-Store owner focuses on growing his base of vendors to grow product catalog
6-Vendor focuses on growing sales to increase profits.

Packaging and shipping
While the multivendor store mostly handles payment, there are two popular ways to approach packaging and shipment:

1-Seller handles both packaging and shipping
2-Vendor handles the packaging and store owner handles with shipping.

Multi-seller store owners mostly provide the packaging material (some for free, some for a fee) to maintain their brand identity.
Payment processing
Multivendor stores pack sturdy payment processing capabilities to help vendors capture shoppers with unique payment preferences. Modern ecommerce platforms support payments through credit cards, debit cards, mobile wallets, gift cards, COD, and net banking.

Multivendor store owners process all the payments and credit the amount due to the respective vendors after some days of successful delivery. The time taken by store owners to pay their vendors varies from store to store.

Profit generation
The scope of monetization is huge with multi-seller e-commerce platforms that attract huge traffic. Below are the ways to generate revenue from a multivendor store:

Commission on every product sold: This is the biggest source of revenue for store owners. Store owners charge a small commission on every product sold and after deducting the same credit the rest to the vendor.

In-store advertising: Multi-seller platforms that attract millions of visitors every day offer in-store advertising to vendors who don’t mind paying a fee for putting the spotlight on their products. Flipkart makes big money from this.

Exclusive seller: Online stores that have a huge base of customers become an exclusive seller of new products launched by reputed brands. Smartphone companies often make stores like Amazon their official sellers to push initial sales without bearing supply chain expenses.

Flagship products: A lot of big online stores launch their flagship products by directly partnering with manufacturers. By eliminating the middlemen, multivendor stores manage to make bigger profits. Sometimes, ecommerce firms also disrupt the market by introducing a product that didn’t exist till now. Amazon Kindle is the perfect example for this.

Memberships: Most online stores sell store memberships that give shopper benefits like free shipping, easier returns, added discounts, and better support. Such memberships are quite popular amongst customers who are frequent shoppers.

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