Multi-vendor Ecommerce Platforms: The Ultimate Guide

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Multi-vendor Ecommerce stores or marketplaces provide passive or hands-free income to the marketplace owner when done right. But for entrepreneurs who can conceive and execute their own secret sauce, choosing a scalable and a reliable multi-vendor Ecommerce platform is a headache and a time consuming process and may burn your fingers!

The opportunities for building the next million dollar Multi-vendor Ecommerce store is unlimited where everything is moving online, and brick and mortar businesses are in the deathbed.

Ultimate Disclaimer: Use your wisdom and seek the help of an eCommerce expert when building a multi-vendor eCommerce platform. Also I haven’t sprinkled any affiliate links in this article, so don’t fire any missiles against me! (I’m a peace lover and a follower of Mahatma Gandhi)

So lets dive more into Multi-vendor Ecommerce Platforms a.k.a Marketplaces in detail and let’s find out which is the best multi vendor shopping cart software or if something like that really exists!

Keep your reading glasses handy…

Multi-vendor(Marketplace) Ecommerce Platforms – An Introduction

From giants like eBay and Amazon to niche players like Etsy, marketplaces are everywhere and is not limited to US alone. Ecommerce marketplaces swallow 90% of the total eCommerce traffic all over the world whether its in China(Taobao/Aliexpress) or in India(Flipkart/Amazon/Snapdeal)

Marketplaces will be having more advanced and specialized functionalities than a normal eCommerce store in terms of :

  • Transactions
  • Shipping
  • Returns & refunds
  • Multiple vendors management
  • Payment and commission processing and disbursal etc.
  • High level server capability to take care of Slashdot effect

But architecting and developing a multi-vendor platform is not a child’s play and its not going to be a 100% success even if you are having the world’s most experienced eCommerce developer in your team!

It all boils down to three items namely,

  1. Making the right decisions at each stage of development
  2. Doing things right
  3. Proper Analysis of Business & Market needs

Must Have Features for Multi-vendor Ecommerce Software or Platform

Responsive/Mobile Friendly – Don’t ignore the small screen

Mobile now accounts for two-thirds of the time people access digital media in the U.S.  This is the same phenomenon all over the globe.

And mobile is still booming: Media time spent on phones is up nearly 80 percent in the last two years.

Also, mobile-friendliness is a strong ranking signal in the eyes of Google.

Front-end Customization – Because first impression is the best impression

A highly flexible and easy-to-modify front-end is a necessity for conversion rate optimization (CRO) and to enhance user experience (UX). The front-end should never stand in the way of a designer or developer. Enough said!

SEO – Can People Find You?

The SEO of most Ecommerce sites SUCKS to the core. The sad fact is that the Search Engine Optimization for e-commerce websites is much harder than it is for blogs or simple 5 page company websites.

And eCommerce SEO is not limited to product pages alone, but the whole process applies to:

  • Category Pages
  • Optimising Product Title Tags
  • Optimising Product Meta Descriptions
  • Optimising Product Images
  • SEO URLs for product and category pages
  • Fixing Errors with Structured Data etc.
Product Suggestions – Guide them

Product Suggestions is a form of upselling and comes in two avatars, one in the product page which provides suggestions of similar products for the customer. It can also be used to highlight the best selling and the recommended products.

The second one is in the form of ‘customers who bought this item also bought’ which showcases the frequently bought together products. This is a very easy strategy for boosting marketplace revenue.

Instant Search – People are impatient

Do you know that people perform more product research on Amazon than on Google?  You can read more about it here and here.

One of the reasons for the early success of Amazon was its blazingly fast instant search suggestions. Instant Search allows visitors to select and continue shopping without extensive research.

Online customers are always impatient and may got to another store if they couldn’t find what they are looking for and its very easy to open a new browser tab than driving your car to the next store! Other issues is that they may commit typos when searching and instant search fixes both the issues for the marketplace owner.

Shop by Brand/Vendor – Don’t forget the brand conscious

Allowing a customer to shop by a brand under any category is one of the most important features for a marketplace. Also the customer should be able to filter the brand listings.

 

Another noteworthy feature employed by eBay is a dedicated store with a permanent URL for every vendor so that the customer can browse the entire range.

These are all marketing strategies employed by online retailers to increase loyalty and stickiness among the brand conscious customers.

Order Management – Your High Five moment

eCommerce customers are shopping online in the first place due to convenience, control and flexibility and they want the same control and flexibility when making orders. They expect quick delivery, fulfillment options that meet their needs and the ability to make returns in the most convenient way.

The return merchandise authorization (RMA) system should be perfect so as to take care of the returns since the complexity is multi-fold in a marketplace simple because multiple vendors are involved.

Marketing & Analytics – To stuff your bank

eCommerce Marketing & Analytics won’t fit into this 2000 word guide if I start writing, so I will abridge some important points without making your grey hairs stand up!

Some of the basic features include:

  • Social Media sharing
  • Product Up-selling
  • Abandoned Carts Reminders
  • To add customer reviews
  • Product feeds
  • Retargeting
  • Failed Order analytics
  • …and much more
Shipping – The Aha moment

Shipping orders and managing the inventory can be painful, there are many steps between receiving an order and the customer receiving their products.

In a marketplace, the order shipping consists of mainly three ways, namely:

  1. Fulfillment by yourself
  2. Fulfillment by the vendors(like Drop-shipping)
  3. Using a Fulfillment service

Here is a visual example from Snapdeal where the marketplace itself fulfills the orders

Here is a different example from notonthehighstreet.com where the specified vendor(s) does all the hard work!

 

Payment Processing – You want the money in your bank?

Payment processors/gateways is an indispensable part of every online businesses that takes money. But they come in different sizes and shapes!

Integrating the right payment processor to the marketplace using the payment API is a necessary evil!

You may also need to take care of different payment API’s for different payment methods like Credit Card, Paypal, Debit Card, Net Banking, Cash on Delivery, EMI options, Gift Voucher etc.

Performance – Every second counts

Amazon once reported that one second of load delay cost them over $1 billion in annual sales. Speed is a killer and decreasing page load time can drastically improve conversions.

And the need for performance should be kept in mind right from the start of architectural design till the day when the site is made live and this applies to both the front-end design and development phases.

eCommerce performance optimization is a never ending, continuous process. But most of the inexperienced folks jump into performance optimization after the marketplace is made live!

—-

Finally we can divide the Multi-vendor eCommerce software platforms into two main categories, namely

  1. SaaS/Cloud-based
  2. Self Hosted off-the-shelf
  3. Custom Developed or Bespoke

1. SaaS/Cloud-based Multi-vendor Ecommerce

While there are dozens of hosted(SaaS) shopping cart systems available online, the market is dominated by the three big guys, Shopify, Volusion and BigCommerce

Shopify

Shopify by default does not provide any way to create Etsy-like multi-vendor marketplace. 

Pros

A mini or a basic marketplace can be created with the help of apps

Cons

  • Lack of default marketplace features. May need to depend on 3rd party Shopify apps
  • Flexibility

Not recommended for a marketplace due to lack of customization and flexibility that commonly plagues hosted shopping platforms.

Can marketplace functionality be added:

Yes, through apps. But in my humble opinion, its very limited. Ex: https://apps.shopify.com/multi-vendor-marketplace

Volusion

Pros

None for a ecommerce owner who wants to build a marketplace

Cons

  • Flexibility
  • Extensibility & Configuration
  • Very limited Apps

Can marketplace functionality be added: Nope

BigCommerce

Although its a little bit better than Volusion in the context of an Enterprise Ecommerce Solution, BigCommerce also ails like other the two when it comes to multiple vendor functionality.

Pros

None for a ecommerce owner who wants to build a marketplace

Cons

  • Flexibility
  • Extensibility & Configuration
  • Lack of features even in the Enterprise plans

Can marketplace functionality be added: Couldn’t find any reliable ones.

Demandware Commerce Cloud

Pros

  • Agility and speed of deployment
  • Good Tech stack

Cons

  • Difficult to customize
  • Needs a technically competent person in your team
  • Good for those who are having $1000K of liquid cash or VC money!
  • You may need to routinely replenish your bank a/c for development or support works!

2. Self Hosted Off-The-Shelf Multi-Vendor Ecommerce

There is a general perception that running a a marketplace using open source multi vendor cart software is easy as making a few clicks here and there and the work is over if they know how to download and install it!

But the reality is very far from that when it comes to free multi vendor shopping cart software and customization is more complex than that. It requires tech-know how and expertise even to launch the beta version of your store!

Magento

 

Pros

  • High security
  • Scales well
  • Flexible architecture

Cons

  • Heavy and complicated
  • Development is costly
  • Needs a techie in your team
  • Requires stronger server, large disk space and memory
  • All the extensions may not provide even 95% of marketplace features that you need.
  • Too many extensions spoil the broth!

Marketplace Extensions(not in any specified order)

WooCommerce

As of late 2015, one in four websites on the internet is powered by WordPress. And WooCommerce powers approximately 8-20% of eCommerce stores and is a fairly popular kid in the eCommerce neighborhood and with mom and pop shops.

Pros

Nothing for a multi-vendor eCommerce system

Cons

  • Performance issues
  • Too much of WooCommerce extensions may play spoilsport
  • Heavy customization may break your bank!
Sharetribe

Pros

  • Easiest to get running for the first time timers and for those who are having zero tech knowledge
  • Available in two flavors: a hosted version and a self-hosted, open source version.

Cons

  • Experienced Sharetribe Developers are costly and difficult to source
  • Difficultly in customizing for high end needs
  • Integration of local payment gateways is a tough job without developer support
  • Sharetribe does not support right-to-left(RTL ) languages like Arabic or Hebrew.
  • Thin Community
SAP Hybris

hybris is omni-channel at its core and it integrates all digital and physical customer touchpoints onto a single platform – including online, mobile, point-of-sale, call center, social media and print.

Pros

  • Quick Deployments, for a faster time to market
  • You can choose between the B2C or B2B editions to suit your needs.
  • Loads of features

Cons

  • Good for those who are having $1000K of liquid cash or VC money!
  • Development or support may break your back
  • Heavy learning curve

3. Custom Developed or Bespoke Multi-vendor Ecommerce Platform

It doesn’t matter whether you build the maketplace using any programming language like PHP, Ruby or C# or the old dying warhorse, Java.  What it matters is that whether it suits your needs and will it will scale for the future.

Pros

  • Tailored to you. The software is developed and built to meet your specific requirements, ensuring that you get software that works exactly how you need it to and delivers the results you want.
  • More flexibility allows you to match your changing requirements.
  • Competitive advantage. An effective software package can make a company work more efficiently, improve their performance and have a positive impact on customer satisfaction levels.
  • No need to pay extra per-user fees as your business grows.
  • You own the intellectual property, so you are not tied to a specific vendor that could potentially disappear at any time.

Cons

  • Management & development overheads unless you have a right team
  • Takes time depending on size and complexity

The Others(not even worthy of mention)

There are lots of other standalone marketplace scripts that trades for less than $500 in marketplaces like CodeCanyon or Binpress.

The same is the situation for extensions/apps for other eCommerce platforms like Prestashop, Opencart or for CMS’es like Drupal eCommerce/Joomla etc.

Most of these kiddies provides just bare basic functionality and may prove to be costlier in the longer run as far as long term maintenance or security is concerned. So better be safe than sorry!

Conclusion…Which is the best path?

There is no one-size fits all answer to this question. No matter which path you take, marketplace or multi-vendor functionality will require development expertise to implement without any fails unless you are an omniscient guy!

  1. Personally I would recommend going for a custom marketplace solution; because I’m a big fan of Amazon’s business model where they always focus on long-term growth. This is the biz model that I would recommend for every eCommerce marketplace entrepreneur.
  2. You don’t need to add all the features in one go. You can launch it as a MVP

Image Credits: 1 | 2 | 3 | 4

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Meet the Author
author
Mithun John Jacob

I’m the founder of MotiveSense;

My mission is to make small and medium-sized business more web savvy and also to guide them to leverage their existing resources to focus on sustainable growth rather than quick wins. Personally, I’m a lazy blogger, a reasonable developer, a rookie philosopher, a Hollywood devotee, a motoring enthusiast and a voracious technocrat.

Responses
frank

Thanks for the clear explanation of a very complex issue… how to choose the right way to develop a multi vendor platform.
Apart from the question ‘whats the best option/solution?’ there is the question ‘whats the best possible option/solution?’. Possible by means of money, time and effort.
Not everyone has a loaded purse, not everyone has unlimited time and the required skills. But… some has great ideas and a clear view of opportunities.

My question: what (kind of) platform would you advise if the money is a factor and the skills are lacking? Could i start with a çheapest best-solution and convert it later to the better best-solution?

Reply

Thanks for your comment, Frank.

If money is a factor, then you can always start with the most affordable solution and upgrade your infrastructure when your bank fills up.

But remember, you should be ready to suffer plus fix the headaches that comes with a cheap solution.

Reply

Hi Mithun,
Great post!
I want to start a marketplace in Brazil.
The main issues for me are shipping, payment gateways and language. I’ll need to use brazil’s shipping carrier and payment gateways and I’ll need a front-end/back-end in Portuguese, I also don’t have a developer team.
Which solution do you think would be best for me?
Also, what do you think of these solutions: CS-Cart, StoreHippo,Laravel Ecommerce, Nwebcart,Cuptask ?
Best,

Reply

Thanks for your comment.

As I said at the end of the post, there is nothing called a best solution.

Out of the list that you had mentioned, CS-Cart is a little better than the others. Even then, I won’t say that go and choose it.

Reply

Marcella

Thanks Mithun.
I understand, there is no best solution.
I actually won the Yo!Kart competition to get their package for free and will start using their platform as soon as I get it.
The major issue that I’ve encountered playing with the DEMO is how the platform is not set up to easily be converted to other languages, currencies and payment gateways, besides the most common in India.

Reply

Chris

Hi Mithun,

Thanks for a wonderful article!

I want to start a multivendor marketplace specially for the European Market. I am running a store on Magento and quite happy with its performance. What do you suggest will it be good to start a multivendor marketplace on it or do i need to change my platform. I see both Paid and Free Options for MultiVendor Marketplace Extension option for Magento on your list. How is the performance of Magento in terms of MultiVendor Marketplace.

Reply

Hello Chris,

Thanks for your comment.

I hope you are using Magento for your own ecommerce store.

The MultiVendor Marketplace Extension will provide you with 30-40% of the functionality that you need for a marketplace.

But the problem with all these extensions is that you need to keep adding different extensions from multiple vendors whenever a need arises and it will make your system bloated day by day!

The platform you choose for your ecommerce store is critical to your success: If you choose the right one, it will easily scale and grow with you.

If you choose the wrong one, all your investments(time + money), will go down the drain!

Reply

Krishna

Hello Mithun,

I want to develop marketplace on Meganto. Currently, I am confused between Webkul and Cedcommerce. Can you please suggest? Or share major cons of both ?

Reply

It depends on your needs. A blanket answer won’t do good for you.

What’s confusing you?

Reply

Hi Mithun,

If I do a self-hosted platform right now, how difficult it is to move to custom stuff once i have enough business?
Lets say from YoKart or Prestashop?

Reply

@Neerja: To completely migrate to a new system is not an impossible task, but a job that needs to be done with an expert guidance.

Since you are migrating from YoKart to Prestashop, which are both PHP based and uses MySQL as the database, the migration is a tad bit easier than when we are migrating from a C# codebase to a PHP one.

Reply

Abass

All is well! Thanks so much for this great and complex article.

Reply

Its great to know that 🙂

Reply

Samir Faruqui

Hi Mithun

Great article bud.

I lead digital initiatives for new businesses at Tata Chemicals . We are playing with the idea of creating our own emarketplace . We already have a basic store on Shopify ( ready but not live ). I have already used a shopify add on to get basic marketplace functionality . However our vision is to become a leading Health products marketplace in the next 2-3 years . While I am okey to start small I have low confidence on Shopify as an emarket place platform . I would have loved to develop this on hybris , but I dont have that type of funding . I think the best approach would be to create a custom solution , but in that case I would need a partner who has the expertise to design and develop a world class emarketplace. Does motivesense have this expertise?
Thanks
Samir
Tata chemicals – mumbai

Reply

Thanks for your message.

Congrats on taking a plunge into the world of marketplaces 🙂

When it comes to marketplaces, its always better to start small with a MVP(Minimum Viable Product). But we should always keep the future scalability in mind.

Reply

Hello Mithun,

Great article. Valuable information! I am also a voracious learner, and I am in the process of creating a multi vendor platform. I have not being able to figure the best way to connect the shipment and the tax calculation gateways. Fatbit is developing the website on a Yo!cart template, but since they are not US based, they do not know the best options.

Any suggestions or guidance from your part will be highly appreciated. Also, please let me know if you are familiar with a particular site that offers these services.

Thank you,

Adriana.

Reply

Hello Adriana,

Thanks for your comment.

For a multi-vendor system, tax & shipping are of paramount importance since US states are having varying tax laws.

I can guide you. Can you tell me more about your needs in detail?

Reply

Great article, thanks for the information.

Reply

Thanks Sambhaji.

If you need any help, just let me know in the comments.

Reply

Pavol

Hi Mithun,

What do you think about IXXO multi-vendor?

Reply

I haven’t reviewed it yet. Will keep posted 🙂

Reply

John

Hi Mithun John Jacob,

Great article.
What solution in your opinion would be better for multi vendor store:
Yo!kart or solution based on apptha of contus?
The solution shell support the following:
– mini site for each vendor
– multi language support
– high-end security of customer credentials
– the solution must include easy way of openning and managing the store from saller side.

Many thanks in advance,
John

Reply

One is a Magneto extension and another is a marketplace app, so its unwise to compare both.

Are you looking to build a marketplace from scratch?

Reply

john

Hi Mithun,

Thank you for the fast response.
Building a marketplace from scratch is not an option for me.
Both of them (yokart and apptha) having a template product that is build for multi vendor market place, which the buyer can customise for his own needs (by thier support or the built in menus) the question is which one of them would provide a better long term solution for the seller and the buyer on the needs that were defined below.

Reply

Hi John,

Apptha: I haven’t reviewed it yet. Will do it soon. Since its a Magento extension, I’ve mentioned Magento’s pros & cons in this article. Do have a look and “always” remember that Magento is a beast to tame.

Yokart: I had already mentioned its pros & cons and personally I’m not a big fan of their customization policy.

Tell me in your comments if you need a free private consultation to build a marketplace, I can help you with that 🙂

Reply

Art Kamath

Hi Mithun,

Great article, very educational, especially for someone like me who is a business person and not a techie. I have a online retail consumer goods marketplace idea and want to build the first version fast. It has to have a payment gateway, certain things like more filters by product (which is our unique selling proposition) and some animation used in educating about the product. Do you think any of the above platforms will be able to do it? I also want a marketplace we can scale (into thousands of products) and customize later. So should I go for a customized solution right from the beginning? What do you think of https://structureddomains.com/ or https://campusonfire.com/ . I also can’t spend a ton of money right away. So what do you recommend?

Reply

Hello Art,

Since you are looking for future scaling and a decent level of customization, I assume your needs are very specific.

I would love to know more about your needs in detail before giving you a custom advice.

Tell me more about your marketplace needs by replying here or via email.

Reply

Hi Mithun,
I have gone through your Artcile and others comments as well.I am planning to start a Marketplace and I have done home work well.I am inclined to have custom made solution but I know It is time consuming.So I want start with a readily available solution to start with and side by side I want to Start custom made solution with earning which I am making from running solution.So I need your help on both.

Thanks,
UPNRaju

Reply

Congrats on your decision and doing the homework.

What help do you need from my side?

Reply

Hi Mithun,
Many thanks for your reply.I need your help selecting a CMS for multi vendor market place and once it running then I would like to go for Custom solution based on the experience gained in CMS.So I rquest you to suggest CMS which I run for 3 years then I would like to switch to my own solution.Since mine is startup company I want keep my costs are minimum possible.

Thanks,
UPNRaju

Reply

Hi UPNRaju,

Good to know that you are serious about running your marketplace.

But marketplace platforms are different when it comes to their architecture.

Before giving you any advice, I would love to know more about your needs like the type of products, vendors, your tech know-how etc. that you plan to have in your marketplace.

Just message me and we can talk…

Cheers,
Mithun

Reply

Katia

Hi, thanks for the article. Which plateform would you recommend for a rental marketplace? Thanks!

Reply

Glad you liked it, Katia.

Can you elaborate more on the type of your rental marketplace?

Reply

MMJ

I am interested in setting up an e-commerce page that promotes and sells business products from several different small businesses. I would like to earn a percentage off the sales of the products that are sold on my site by each business. Can you please tell me the procedures for setting up my multi-store e-commerce page?

Reply

Can you tell me more about your needs, products and location?

Reply

Vincent

Hi Mithun John Jacob,

Great article and a good sens of humor, I enjoyed reading it. Keep up the good work!

Thanks,
Vincent

Reply

Hello Vincent,

Glad to know that you liked it.

Do you plan to build one?

Reply

Frank

Did you review Sharetribe? What is your opinion on this platform?

Reply

Frank,

Not reviewed Sharetribe yet. But looks promising.

Reply

Sejal

Hello.. Great article.. I want to create a small mixture vendor ecommerce website so want your suggestion on which platform to use? Our vendors r mostly resellers.. So is it possible they directly take the order via. Communication without gateway

Reply

Hello Sajal, Thanks for your message.

Can you elaborate your question?

Reply

Alex

Thanks for posting on this topic, i had been looking for it and successfully configured multi store s in my magento store.

Reply

Bill Smith

Mithun,
About Yo!kart – you mentioned their costliest package doesn’t makes sense – could you please elaborate on it? Is it too expensive? too cheap? Not sustainable?

Reply

Bill,

I meant not sustainable.

Reply

Shawn

This the best article about multi-vendor e-commerce.

I am looking for a mature software with rich features. There are so many great marketplace sites, but it is so difficult to find a software or a team to make a new one for a small company.

Please contact me if software engineers who have experience on this. I have $8000 budget to make a goodmarketplace.

Reply

Hello Shawn,

Its great to know that the article has helped you.

Tell us about your needs via https://motivesense.com/free-quote/ so that we can help you!

Regards,
Mithun John Jacob

Reply

Yan Kulakov

Hello, Mithun!

Thank you for this detailed comparison! It is definitely helpful for people who seek the marketplace software. I’m from CS-Cart and I just wanted to know why you wouldn’t go with our Multi-Vendor solution. I absolutely agree that there’s no “best marketplace software”. So it would be helpful to know what pros and cons you see in our Multi-Vendor. Please check the demo if you need here: https://www.cs-cart.com/multi-vendor-personal-demo.html.

Thank you for your answer in advance!

Best wishes,
Yan, the public relations manager at CS-Cart

Reply

Hello Yan,

Thanks for your message. Will do a review soon!

Reply

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