Learn how running a multi-vendor online shop can help you earn big bucks, when done right!

Running a multi-vendor online shop can help you (as a store owner) to earn big bucks! When done right, it looks something like customers being able to buy a product, irrespective of the vendor, and the product arrives at the doorstep with no need to search multiple sites. Setting up a multi-vendor store site is a great way to do online business because it allows you to work with a number of different vendors without having to worry about managing any kind of inventory.

Let’s just take an example of Etsy, eBay and Amazon as they are running on a similar idea of multi-vendor site because sellers or companies are able to create their profile/account and post their products for sale while taking care of all the logistics/shipments. These multi-vendor sites then take out a percentage from each sale and make a large profit without having to buy any products or maintain inventory.

Here are some benefits of running a multi-vendor online store site:

Managing products on store is easy

Running a marketplace/multi-vendor online shop (along with drop shipping support) allows you to sell online without having to keep stock in-house. Managing products on a marketplace is quite easy for a store owner as products from a number of independent vendors/companies can appear in the common product catalog and your website visitors can shop on one web store because all the products are supplied by hundreds of different vendors from all over the world.

Store admin gets the commission from each sale

As the owner of the marketplace, you can charge a percentage (i.e. commission) from the vendors on the selling price of an item that is sold on your store site. Hence, it allows you to generate a continuous revenue for simply providing a platform to the vendors for selling their products. It is quite important for you to come up with the right percentage of the commission as it should be high enough for you make a decent profile while keeping it low enough for keeping the vendors encouraged to sell on your store.

Common payment methods

Multi-vendor store site owners do get the authority to select payment method(s) that should be available during the checkout process to the customers. Any payment method (like PayPal, Authorize.Net etc.) that store owner selects are usually available to the online shoppers on a multi-vendor site for making the payment irrespective of the vendor involved in the order. Hence, the multi-vendor store site owner do not have to worry about offering several different payment methods as per the vendors and can simply choose the payment method that works for his/her store site.

More traffic on the store site and less store management time

Every party that is involved in a multi-vendor store site is a winner – The customer gets the best product, the vendor gets a ready to use platform with enough traffic and marketplace owner get the commission from each sale. Bringing multiple vendors on a store site can help in bringing more traffic to the marketplace as every vendor advertise their products and link back the marketplace store site where they are selling their product line. Hence, the main marketplace site gets more online shoppers from various marketing channels used by different vendors. A marketplace also reduces the store management time for the site owner because store owner is not responsible for the inventory. In this scenario, the marketplace owner acts as a moderator instead of a being a supplier.

Some unique challenges

Running a multi-vendor store site/marketplace does comes with some unique challenges that every marketplace owner should try to overcome in order to a run a successful business:

• Make sure the quality of the product(s) that is being sold on your online store is good
• Make sure the customers are happy with the products – Here you can learn about some of the best ways to get feedback from your customer
• Make sure the vendors are using high-quality product images – Here you can learn about how good quality product images can increase the revenue of your e-commerce store
• Make sure the vendors are using quality content for describing their products
• Make sure vendors are shipping out the products on time

Managing a marketplace/multi-vendor store site can be quite different from running a standard online store. As long as marketplace owner and vendor tasks are balanced, the work-flow will always be smooth and it will help in creating a fluid customer experience.

nopCommerce supports multi-vendor and drop shipping allowing store owner to sell online without having to stock inventory or ship orders. Each vendor can be provided with an administrator panel access to manage their products, review sales reports and order details regarding their products. Vendors do not interfere with each other's activity.

Author: Lavish Kumar