Top 7 Steps to Create a Successful Multi-Vendor Marketplace

29 November7 min read
Top 7 Steps to Create a Successful Multi-Vendor Marketplace

There is no better way to determine whether a functional area is worthy enough than to observe some successful projects available in the segment. Fortunately, there is no shortage of popular multi-vendor marketplace websites in today’s world of eCommerce. 

Amazon, AliExpress, Airbnb, eBay, OLX, Kickstarter are a few well-known peer-to-peer aggregators whose business model represents the future of online eCommerce. The global online eCommerce has managed to grow at a continuous rate despite the frequent Covid induced lockdowns adding fuel to the fire. That is why a step-by-step approach on how to build a multi-vendor marketplace website is appropriate. 

Step-1: Establishing a Niche and Competitors

The availability of a wide range of online marketplaces suggests strong competitors in the industry. It is important to establish a platform where your customers and competitors are attracted to locate products and services from numerous providers. Therefore, it is quite evident to follow a strategic approach towards building a multi-vendor marketplace. 

One must focus on choosing the niche, a name, a business model, a technology stack, and software developers during the development process. It is essential to spend some time to research your target audience, latest eCommerce trends, competitors, and several other aspects that are relevant to the market. Furthermore, one must determine the requirement of their potential customers. 

To focus on the relevant product category, it’s also important to keep an eye on potential competitors as well as eCommerce marketplaces that are as follows: 

  • Product Platforms

Since we all know that use platforms to make purchases. This type caters to both B2B and B2C customers followed by an optional availability of P2P(Peer-to-peer) options. Amazon, eBay, AliExpress, Etsy, Google Play, and other well-known eCommerce giants are examples of such marketplaces. There are multiple payment options available in the multi-vendor marketplaces such as COD, Credit/ debit cards, PayPal, etc. to offer a smooth less transactional journey to end-users followed by additional features such as gift cards, coupons, and discounts, etc. to attract and retain customers. 

When it comes to multiple-vendor marketplace software, there is no such software that occupies the entire niche. CMS, eCommerce frameworks, and JS libraries might address different projects depending on the particular business model. As per our experience, Magento 2 serves as the best solution for any multi-vendor marketplace platform as per our viewpoint. 

  • Service Platforms

There are numerous services for which customers visit service marketplaces. Airbnb, Kickstart, Uber, etc. are a few examples of service platforms that are dominating the market on regular basis. However, custom solutions that are built from scratch account for a considerable portion of all websites when it comes to the software used to develop service platforms. However, this doesn’t exclude the use of Frameworks and CMS. 

E.g.: A multi-vendor booking marketplace should have a variety of unique features that need to be designed individually. 

  • Project Platforms

It is often witnessed that bank credits and IPO Procedures appear costly to many entrepreneurs when it comes to funding for new projects. That is why several multi-vendor crowdfunding platforms like Kickstarter, Indiegogo, and Fundable have become extremely popular among entrepreneurs. 

The payment options of project platforms are consistent with the ones available on multi-vendor marketplace websites. The major exceptions are crypto exchanges where crypto projects are funded through ICO, STO, and other types of crowdfunding protocols. Both frameworks and custom development from scratch are suitable for building project platforms. 

  • Hybrid Platforms

Hybrid platforms are the type of multi-vendor marketplaces that combine both products and services. OLX and Craigslist are some of the examples of Hybrid platforms. They provide a variety of membership plans with limited listing options. Such platforms consist of features like customer feedback, registration, help center, personal communications, and social media. Payment options on platforms include PayPal, Cash, Credit/ Debit cards. This type of platform can be used for a variety of software development projects

Step-2: Choose a Site Name and Domain Name

Visualization of the appropriate website's name is one of the key aspects which is just as vital as having the right development technology along with a great marketing plan. Domain Name generator, Wordoid, and Domain Hole are some of the tools to select a decent name. 

The only thing that is left after you have decided on a name for your marketplace solution is to register it. GoDaddy, Dreamhost, Namecheap are some of the renowned websites that have the largest user base along with the availability of domain names. 

Step-3: Monetization and Functionality

The conceptual definition of your multi-vendor marketplace should be the first step in the development of your projects. It must consist of all essential parameters of your website such as goals, activities, markets and competitors, design concepts, etc. This general document should be precise as various other specifications are likely to arise during the development process. 

Another important factor to consider from the start is the monetization of your marketplace project. If your organization is profitable, then you can develop the following revenue streams such as: 

  1. Commission fee
  2. Subscription
  3. Cost for listing
  4. Availability of Freemium plan
  5. Advertisement

In addition, the platform should have a multi-vendor marketplace payment gateway installed on it based on the choice of monetization strategy followed by necessary assistance from experts. 

Another important aspect to consider while building a multi-vendor marketplace is to build a user interface based on the interests of your target audience. Professional designers and developers have a better understanding of how to make your marketplace both effective and engaging. 

Step-4: Advertisement Campaigns

The multi-vendor marketplace eCommerce solution is likely to cope with a variety of sellers and a considerable no. of buyers except for traditional online stores with one seller. 

Furthermore, some experienced multi-vendor marketplace entrepreneurs seem to present you with the suggestion of searching for a seller to invest in your platform. Some of the tested ways are as follows: 

  • Communication with sellers across different markets.
  • Searching for sellers on various marketplace platforms through google.
  • Market aggregators such as Yellow Pages are worth a try.
  • Searching for sellers on social media sites.

After the sellers are accompanied by buyers, Standard PPC advertising on Google and social media sound effective. Discounts, gifts, and bonuses will pay off generously for your multi-vendor marketplace project in due time throughout the early stages of your website advertising. 

Step-5: Development Methodologies

There are three basic techniques to develop multi-vendor marketplace solutions contributing to its own sets of advantages and disadvantages in terms of deployment speed, development cost, and a different set of features. 

  • Development from scratch
  • Ready to use Open-Source Software
  • Development using CMS

Step-6: Budget and Specifications

The affordability of any system is essential for the effective implementation of multi-vendor marketplace solutions. It’s always vital to consider the feasibility, and the conceptual design of your platform should equally correspond to financial capabilities. The stages of a well-balanced plan are as follows: 

  • Setting up a business plan for a multi-vendor marketplace such as marketing strategy, risk analysis, initial budget, and projected revenue.
  • Acknowledging technical specifications involving the creation of website through chosen technological stack followed by UX/UI elements.
  • Visualization of a user interface including navigation screens and content pages.
  • Budgeting-Both the specifications and shells are closely evaluated by Project managers, Designers, and programming engineers. The projected development time, as well as the cost of labor, can help you in the estimation of the overall budget to build your multi-vendor marketplace website.

Step-7: MVP and Post-Deployment Development

Minimum Viable Product (MVP) allows you the representation of your project to a target audience. It helps you test your multi-vendor marketplace under real scenarios at a reasonable cost. Following the launch of MVP, your team will have the chance to gather customer insights which in return would help developers in improving the usability of the website followed by the integration of additional features. Therefore, MVP is a useful tool for making continuous improvements. Google analytics, AV-tests, focus groups, and questionnaires are some of the few choices available for the post-deployment development of your project. 

Final Thoughts

The above-mentioned steps might not be adequate in their coverage of the path towards a multi-vendor marketplace website. However, they represent a suitable framework for understanding the mandatory tasks that require to be completed to meet the standards of the highly competitive sector of online multi-vendor eCommerce.