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Why Choose a Multi-seller Marketplace Over an eCommerce Store

Aren’t both the same? Yes, this might be the thought you had soon after reading the title. Well, it’s not just you there are others who think the same that an eCommerce store and multi-seller marketplace are one and the same. It’s nobody’s fault because both are online selling business but in a different manner.

Online selling can benefit you more than a traditional brick and mortar shop but, the success also lies behind the path you choose, whether you want to run a marketplace or your own website.

We know you might be eager to learn which one is beneficial, but before that, let’s understand first what makes the marketplace and an eCommerce store different from each other.

Multi-seller Marketplace

A multi-seller or a multivendor marketplace is a vast online platform that allows multiple third-party merchants to sell their products online. The marketplace owner does not own the inventory, and the sellers invoice the customers directly.

Means, various sellers can market their products to a broad audience, and customers can purchase a diversity of products from multiple vendors at one place. Examples include Amazon, eBay, Walmart, and Etsy.

E-Commerce Store

An independent eCommerce website is a single or multi-brand online store where only a specific brand sells and runs the site. The owner of the website owns the inventory and even invoices the customers.

In short, a market place is an e-commerce platform, but not all e-commerce sites are marketplaces.

Difference between E-Commerce Website and Marketplace

Both have their pros and cons, and the selection between them depends upon what you’re selling to whom. A marketplace gives broad exposure but even more extensive work while eCommerce is less clutter, but everything will fall on your shoulders. They differ in terms of investment, functionality, maintenance, personalization, and scalability.

Why preferring multivendor marketplace over an eCommerce website sounds to be a good idea?

1) Cost

First of all, it’s the cost. A marketplace is a big platform that you can get with a small investment while an eCommerce store requires the right amount of money to attract buyers.

2) Less complexity, minimum effort

The management in a marketplace can be organized by making the merchants’ signup to your store and providing them an individual dashboard to manage their orders for which they pay a fraction of their sales proceeds as a commission to the owner for every successful payment transaction.

While in eCommerce all you have to do by yourself. Moreover, the burden of filling up all the product details like description, price details, feature enhancements and so on is passed on to the sellers in marketplace unlike in eCommerce where you have to maintain it all.

3) More visitors, more sales

A Magento multi-vendor e-commerce marketplace solution brings in full traffic without any much effort. Due to a wide choice of products, customers flock on its own. While in eCommerce, you have to put efforts and invest in to attract customers and generate traffic.

4) Guaranteed and positive cash flow

Since eCommerce websites are made with huge investments, it takes time to gain more than one has invested, while with online Magento multi-vendor marketplace eCommerce solution, the revenue generation won’t take time at all as it is dependent on the percentage of transactions.

5) Inventory management

Inventory management is no easy task. You would always be required to keep an eye on inventory if running an eCommerce store, while in the marketplace, inventory management becomes the responsibility of merchants.

6) Marketing Approach

In eCommerce, due to the sale of a specific product, you will be required to apply different marketing approach to target particular customers.

In the marketplace, you don’t have to worry about this at all as the merchants will market their product on their own luring customers to your marketplace to make the purchase.

7) Customer Engagement

Keeping customers engaged is difficult in eCommerce compared to that in a marketplace because it is time-consuming and expensive. You might not necessarily be able to target the right set of people.

While a marketplace regularly focuses entirely on moving buyers towards purchases and sellers towards listing more products or services, audience engagement is not an issue in it at all. With attractive offers and sales, people will always check out your marketplace and make a purchase all the time.