Single vs Multi-Vendor Marketplace

    Single vs Multi-Vendor Marketplace: All You Need to Know

    • November 18, 2021
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    A few decades ago, online shopping was not that popular. But today, online shopping is slowly becoming an integral part of the purchase process. It works as a powerful tool that helps the brand grow economically and capture the attention of a wider audience. Any brand that uses the right strategy for the product and supplements it with decent knowledge can well-establish an eCommerce model by generating huge revenues. 

    If you planned to shift to the online model, then a big problem would be deciding whether you want to sell products with your online store or become a part of a well-established model. If you’re a brand that wants to have your store, then it is classified as a single vendor, and one who wants to join an established marketplace is called a multi-vendor marketplace. If you feel you’re new to this market, let’s understand each marketplace in brief and allow you to choose which is a better fit for your business.

    Single Vendor Model

    The single model generally works for the brand that needs to sell its products on its website. The customer only comes to your website if they want to buy products from your site. The model includes two parties like one being the seller and the other being the buyer. The single-vendor model is prevalent and sells its stock exclusively to the audience without any mediator. The company is responsible for product manufacturing, sourcing, storing, and distributing the items when sales require.

    Single Vendor Model Advantages

    • It is simpler and easier to understand while maintaining professional relationships.
    • It helps to scale up development by getting more attractive rates.
    • Administrative and other underlying expenses can be reduced.
    • It’s easy to optimize and integrate with other systems as a single team owns it.

    Drawbacks of the single-vendor model

    • Difficulty in finding the right contractor

    For a single vendor, it’s challenging to find the right agency and expertise in your niche. At the same time, you’ll need to satisfy all your needs. The more complicated the project is, the more probability you need to execute your goals.

    • Dependency risk

    The company ties itself to one vendor, and any problem from one side turns out you lose your only customer. The vendor may lack the expertise, and you find serious obstacles coming your way. In this case, one vendor takes over another, and later you need to expect complete dependency on that additional project.

    Multi-Vendor Marketplace Model

    By comparing it with a single vendor, a multi-vendor is an online store that sells products from different sellers. In this multi-model, several sellers come together and sell goods using the standard store. Hence, the system uses multiple sellers that come together, and you earn higher profit margins. The multiple-vendor model offers customers a chance to buy products from different sellers under the same roof, saving their time and energy. For example, if you need to buy a pair of shoes, instead of going to 4 different shops looking for another brand, why not visit one store and get the same level of choices. The marketplace provides clients with industries like grocery, food industry, service industry, and more.

    Multi-Vendor Model Advantages

    • Risk diversifying and decreasing the risk of dependency, as you don’t need to rely on a single team.
    • It offers a broader scope of expertise with segmented specialists providing a higher level of qualification in specific niches.
    • Multi-workflow offers performance with organized development with significantly accelerating product creation.

    Drawbacks of Multi-Vendor Model

    1. Higher cost: You need to negotiate the prices of services in each project with the contractor, for which they need to agree upon the potential discount.
    2. Administration resources: Ask the contractor to coordinate and coordinate with them to get a considerable amount of time and resources. Chances are, you may end up having issues with task approval.
    3. Integration difficulties: When multiple teams develop different product components, you’re more likely to get issues related to integration. This problem can be solved with additional money and time. 

    A clear summary of the single vendor vs multi-vendor marketplace model

      FactorsSingle Vendor ModelMulti-Vendor Model
      Implementation ChallengeLower Higher
      ComplexityLowerHigher
      Cost
    Lower, because of low volumeHigher, because of high volume
      Staff TrainingOffer more per vendorOffer less per vendor
      Procurement EffortsLowerHigher
      Vendor SurvivalLargely vendor surviveSmaller vendor survives
      Product UpgradesSlowerFaster
      Breed ChoiceNot possiblePossible

    FAQs

    1) What are the platforms that follow a single vendor marketplace?

    A few of the platforms are Veromoda, Kaekoo, cloth face mask, and more.

    2) How to know which platform model is best for me?

    Understand which model to follow based on various factors by looking at the budget, competitor research, and your requirements. Determine these factors and get to know which model is best suitable for your business. 

    3) What platforms follow the multi-vendor marketplace model?

    The companies like Amazon, Airbnb, eBay, Uber, Fiver, and Grofers, etc., use some of these models to increase their business. 

    Conclusion

    Single vendor vs multi-vendor marketplace models both possess equal importance. Additionally, it comes with potential traits and drawbacks that make them unique. In a single vendor seller store, there are times when you get more profit than the multi-vendor model. However, in multi-vendor, it comes with significant dominating single vendor stores at times.

    The bottom line says you’ll find many benefits in the eCommerce business where sellers and buyers gather to buy and sell goods. This chain would help companies to reach a lot of potential by maximizing revenue. Go for choosing the strategies based on specific projects and features as it helps solve complex tasks that need a high level of experts in different areas. If you’re looking for a reliable technology partner to implement the project, connect with us and develop a high-quality product model.

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