What are the benefits of the multi-vendor marketpalce model?
The atmosphere in the eCommerce arena is witnessing a change in face of shifting of its working model. The multi-vendor model also known as marketplace or virtual marketplace model is taking the center stage when it comes to the operation of an eCommerce website. Before we look at the benefits of the model and how you can adopt to it, we shall first understand how exactly the model works. How the Multi-vendor model works? A multi-vendor model of operation refers to a system where the eCommerce entity allows various vendors/sellers to utilize its platform (marketplace site) to connect with a wider base of customer and enhance their profit margins. It marks a shift from the traditional inventory based model where only the eCommerce website is involved in the entire chain of process, and they maintain an inventory of the goods in lieu with the market demand. The model stands on the base of mutual benefit sharing between the vendors and the eCommerce website, thus making it a win-win situation for both the marketplace site and the sellers on the marketplace. Perks of the multi-vendor marketplace model After giving you a brief idea about what exactly the multi-vendor model of eCommerce is, we will now discuss about what are the benefits that the model carries.
1. Extensive range: The multi-vendor model provides you with a wide variety of product range on your platform. This means that the customer has a wider range to choose from. It will automatically improve the chances of finding the products on your site for the customers. 2. Reduction of burden: The multi-vendor model drastically reduces the burden associated with inventory management, logistic management, product addition and update, and shifts these necessary evils to the multiple vendors. The feature can also be seen as a perk to the sellers, as they get the full freedom to upload and manage their products like their own eCommerce sites. So, sharing the burden is good for both the parties. 3. Cost cut: By shifting the burden associated with product management and processing to the vendors it cuts the relative cost associated with them and distributes it among the wide base of vendors. The cost of website management is cut from the sellers’ share and cost of inventory management is cuts from the site owner’s share. Win-win for both the parties. 4. Set up cost: The start-up cost for multi- vendor based eCommerce web store is fairly low as compared to the inventory based model as the various cost associated and burdens are distributed. Thus, startups are more encouraged in a marketplace model. 5. Traffic: Studies have shown that multi vendor model based websites generally drive more traffic as compared to other websites. The reason behind this could be sighted from the fact that the multi vendor set up provides a wide range to choose from thus capturing a larger base. How you can adopt the marketplace model?
If you are planning to shift your eCommerce store to a multi-vendor setup then you can take the help of various plugins and modules based on the CMS platform you are using for your website. Magento multi-vendor marketplace
module is one such extension which can help you in making a smooth transmission to the multi-vendor model if you are working with a Magento based site. Similarly, PrestaShop is not behind Magento in this regards. The PrestaShop marketplace module is a solution for the PrestaShop sites. Conclusion With most of the big power houses of eCommerce like amazon and Flipkart moving towards the multi-vendor model, and with increase in the percentage of profit for the model, the effectiveness of the tool in optimizing your conversion rates can’t be bogged down. Thus it would not be a surprise if in future major portion of eCommerce is captured by this model itself.