Why is marketplace eCommerce platform so useful in 2020

With the pandemic at large, a lot of offline businesses have disrupted and this has led to a lot of retail store owners and vendors turning towards multi-vendor marketplace platforms for doing eCommerce while the rest are doubtful.

This is why this article focuses on answering the question ‘why is the marketplace eCommerce platform so useful in 2020’.

You might probably know that eCommerce is becoming a compulsory need for almost all businesses. If you don’t then it’s okay. You can read Why is everyone switching to eCommerce for their business? to understand the ongoing scenario. Let’s begin by trying to understand the basics first!

What is a marketplace eCommerce? What is dropshipping method?

The marketplace eCommerce model provides a safe and improved space for multiple vendors, shops, or a person to sell their products with a strategic plan in every business involving complex multi structural hierarchies of supply in between the manufacturers and the end-users. 

The marketplace owner has to draw customers, while third-party vendors have to deal with the manufacturing and shipping processes. Through a simple internet-based portal; Online Shopping Multi-Vendor Marketplace helps improve the production method where the businesses sell their products directly to the customers. Thus, avoiding the immovable process of stocks holding!

This type of supply chain management is called the “Dropshipping” method.

What is a multi-vendor marketplace platform

The beauty of a multivendor marketplace is that every seller or merchant has a separate shop inside the multi-vendor marketplace platform that they are free to run the way they choose to.

The platform owner only handles/takes care of the order processing, tracking, and payments where they are due.

Multi-vendor marketplace eCommerce shifts the humungous task of maintaining inventories, logistics, product descriptions, and updates to individual vendors and retail store owners by giving them a system to manage it all as per their convenience, providing them with a sense of control.

You as the platform provider only have to make sure that the platform is smooth enough to handle all their business demands and gain your remuneration only for the services they use.

Why is marketplace eCommerce different from our general understanding of eCommerce

It is because quite often we only see what meets the eye. We can only perceive the B2C in eCommerce, neglecting, or unaware of the fact that the B2B in eCommerce can not only exist but also be used to create a very effective logistics and supply chain management.

No, eCommerce is not about logistics and supply chain management. But an efficient logistics and supply chain management becomes the backbone of a successful business. 

You can know more about creating apps for logistics companies in this article. So, coming back to the eCommerce marketplace, the one thing that you should know if you have to manage vendors and retailers, unlike the basic eCommerce where the B2C in eCommerce is direct communication between the business and the customer without the need for any external involvement. These models are cheap but barely scalable. They cannot withhold even the idea of business expansion lest business collaboration.

What is Multi-Vendor Marketplace Business Model

Companies like Amazon, Etsy, Flipkart, Alibaba, eBay, etc run a successful multi-vendor marketplace business model in eCommerce that accommodates both b2b and b2c. This multi-vendor business model plan has not only been successful but also has become the most efficient model in eCommerce sales history. 

A multi-seller module promotes sales for third-party vendors by letting them sell products all in one online marketplace. 

The entire marketplace works on the same software base, allowing all vendors to share their different goods on a single website, creating a single channel for them to deal with ease and transparency. 

As for the revenue, these businesses take a percentage of the sales on any product that is sold across the platform.

What are the benefits of Marketplace eCommerce

Since it’s a multi-vendor eCommerce platform, marketplace eCommerce not only helps retail shops and stores but all the involved parties.

Business operator

  • A marketplace module lets the business operator take a small commission on the things that a vendor sells on their platform. 
  • Since the commission is charged in place of or additionally for the products of the marketplace, the profit grows exponentially along with the increase in sales and brand value of your platform.
  • eCommerce marketplaces offer a direct buying process as factors like the availability of the stock, and the costs of the product are all open on a particular platform in a dynamic atmosphere.
  • Marketplace eCommerce also provides a better chance for suppliers and purchasers to build a new business relationship within and even beyond their supply chain.
  • Most importantly, the time limitations for selling across different geographical locations is reduced due to the online marketplace software that runs round the clock.

Vendors and retail store owners

  • It is simply pointless for vendors and retail store owners to create an eCommerce platform of their own to sell the things that they have. It was feasible a while ago but in order to beat the competition now, they need to align themselves with platforms that are based on marketplace eCommerce. 
  • Even smaller stores don’t have to depend on the marketing capacity or the budget to build their multi-vendor eCommerce website. By following themselves with a bigger and known business, these stores can get clarity and, in some cases, use the shipping options of the existing eCommerce marketplace.
  • Retail stores or vendors that aren’t confident about building their eCommerce marketplace website or require to decrease their marketing values can join themselves with platform providers such as yours and get clarity as well as options.
  • The normal exchange of prices between the old and the new vendors is possible through improving and keeping- uniformity.
  • The multi-vendor marketplace eCommerce thus becomes the new sales channel to market and automatically sells their goods/products.
  • In fact, when scaling up, your marketplace can allow overseas sales by offering chances to trade in the international eCommerce marketplace just like Amazon.


  • Marketplace customers usually try to save as much as possible by trying to find all the possible options on a particular website and are enabled to get the highest quality product at the most moderate price.
  • The customers get the satisfaction of comparing products on various brands within a platform than on a particular website, thus encouraging them to find the fairest cost for the best quality product.
  • Real-time updated data on the cost and availability of products makes it simpler for the customers to get the best deal.
  • The buyers can search for best vendors and develop a trading partnership by having an exclusive deal with them.

Why retail store and shop owners favor multi-vendor marketplace platforms 

Retail store and shop owners as well as small-scale vendors find online marketplace to be a better option when it comes to sales and revenue generation. This is because multi-vendor marketplace platforms provide:

Readymade traffic

Established multi-vendor marketplace platforms bring in a large amount of traffic and sales opportunities. 

Creating a personalized online store and investing in marketing will consume a lot of money and yet without as much traffic as that of a platform. Instead, setting up a shop on an online marketplace platform is a better deal.

This is why as a platform provider you need to equip your marketplace with sophisticated solutions and features like AI and ML in order to compete with existing marketplace eCommerce platforms.

Profitable income source for tech-savvy businesses

Retail store owners and vendors who are more concerned about making profits using technological advantage rather than trying to create a brand will always choose multi-vendor marketplace eCommerce platforms.

Small and pocket-friendly setup costs

Creating a website to sell products and then investing in advertising means spending hefty amount of money and resources. Online marketplace eCommerce can provide them with platforms to begin their business within a pocket-friendly budget and a small selling fee on the items that are sold. If they are unable to sell, they are liable to pay you!

But if their products start selling online, then you get a cut out of it. It’s a win-win situation for both of you!

Flexibility and Scalability

Retail store owners and vendors who use multi-vendor marketplace platforms can manage product details, prices, and areas of delivery, make additions, and updates as per their convenience. 

This flexibility comes along with no requirement of technical knowledge or that of eCommerce.

Also, they can any day scale up their business within the platform without having to pay extra for anything. Their business gets upgraded online automatically every time their eCommerce platform gets upgraded. 

This is why multi-vendor marketplace platforms require superior technology and considerable investment to make the right impression. This is also why a lot of entrepreneurs shy away from creating or investing in it. 

But one needs to realize that even with the presence of giants like Amazon and Alibaba, the eCommerce industry has barely blossomed. With more and more millennials growing up to be self-sufficient and earning individuals, their buying capacity will be totally dependent on online platforms in almost every sector including groceries, medicines, home essentials, personal services, and almost everything they would need.

How to implement multi-vendor marketplace platform for eCommerce

Creating an app is easy. In fact, you can make an app in 10 easy steps. But a marketplace platform is a complex system that takes care of everything that an eCommerce business would need. This is why before deciding to execute a multi-vendor eCommerce marketplace, your business will require the following:

  • Payment options

How will vendors collect payment, and through which platform?

  • Commission fee

How will you get paid from vendors for trading in your marketplace, i.e., how will your business make an earning?

  • Order fulfillment and order shipping

Is the seller or the marketplace responsible for the product fulfillment, and how will you organize the various options of shipping?

  • Liability

How will you assure that a customer pays for buying and that vendors produce goods that meet consumer needs in the best possible way?

What are the features of a standard marketplace eCommerce 

Remember that you are not their only option and hence you need to be better than your customers. Effective and smart delivery of the said features will ensure that they stand and even if they leave, they will eventually return because yours is better not only from your competitors but also for their (retail stores and other vendors) businesses.

  • Simple registration/vendors listing

Retail store owners and vendors should know how to join and build their product listings soon without any complexity. If they find it difficult to list products, they’ll go someplace else. Besides, they want their profile page to manifest those listings. 

  • Fast search functionality

Search is more significant for multi-seller marketplaces than eCommerce. Consumers have to find what they require in a sea of third-party products.

  • Simple reviews

Due to the abundant presence of sellers, customers have to assess vendors and products fast so that retail shops and stores can build their trust amid the customers.

  • Digital vs. Physical

A few multi-vendor marketplaces are restricted to digital or physical goods. You have to choose the right option for your goals.

  • Ability to collect the commission fee

As the owner of that marketplace, your income comes from the commission fee of the items sold through your platform. This is why your platform should make it simple for you to manage payments, so you don’t get confused. Neglecting this can cause a lot of economic damage to your business.

  • Development Cost

The last point isn’t a feature but needs to be addressed. You will see a notable difference in price for the multi-vendor marketplace development in different IT companies and that is because they use different kinds of coding languages to build the platform like Magento, WordPress, .Net and others), so you have to measure the cost of the platform and its features with care when selecting one.

Also, read the article Points to Consider Before Starting a Startup. It might help you in clearing out your perspectives from the point of view of a startup if you are one.

It would be unfair of me to not talk about the eCommerce industry right now because the post-pandemic scenario is being speculated as an unforeseeable area and people are probably scared of investing in marketplace platforms now.

What can B2B and B2C marketplace platforms do during COVID-19

  • Move more and more businesses and customers online because now is the time to provide them with safety and convenience
  • Engage with your existing customers and their communities. It is important to let them know that you care (without bombarding their devices with promotions). 
  • Ensure your e-commerce platform meets the needs of both B2B and B2C customers
  • Streamline your return process according to the rules and regulations imposed geographically
  • Roll out online stores to new regions and markets because people need it now more than ever
  • Take care of any messy demand and supply chain disruptions and prevent them from happening over and over again
  • Most importantly, put in all the safety measures needed to protect your employees and customers


The famous dramatist Shakespeare once said, “This too shall pass.” So will the pandemic! 

The question you should be seriously asking is are you prepping for the business during the pandemic in order to be ready for the post-pandemic eCommerce scenario? 

Remember, only companies who are striving to evolve out of the situation to provide their customers with value shall be trusted later on as well. New companies with same business model will only be looked down upon since they weren’t there when people were in need.

By effectively strategizing and working now in order to provide the best service for your customers, you instill in them a sense of loyalty that is the backbone of brand building.

Do not worry about the COVID situation right now. Let us know what your problems are and we will help you create one of the best multi-vendor marketplace platforms best suited for your eCommerce industry.

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