Is this the best time to start a Multi-vendor marketplace of your own?




Definition– It is a place where buyers and sellers connect and conduct transactions.


The definition holds true in the online setting as well. For example, GrubHub is a marketplace where diners order food from the local restaurant of their choice. Similarly, Airbnb is a marketplace, where the guests select a short-term accommodation for themselves and the owners rent out their properties or spare rooms to guests. The marketplace website acts as a middleman taking care of the payments which makes it convenient for both parties.




For the last decade, the growth in online marketplace businesses does not seem to be slowing down. Business models are constantly evolving. Beyond well-known e-commerce marketplace brands like eBay, Etsy, Amazon, Airbnb, Uber or GrubHub, we saw marketplace models disrupting just about every traditional industry. They are selling everything from diapers to second-hand furniture.

E-commerce on the rise

What if we told you that almost half of U.S. households are now Amazon Prime members? You won’t believe me, will you? Well, it’s true. In fact, if Prime was a country, that would make it the world’s 14th largest by population.

In 2017, retail e-commerce sales worldwide amounted to 2.3 trillion USD. Revenues are projected to grow to 4.88 trillion USD in 2021. The reason is fair enough, consumers now see the couch in their living room as a good-enough replacement for their nearest brick-and-mortar store.

Moreover hassle free return policies have made online shopping easy, and risk-free for consumers. With advantages like these, it’s unlikely that marketplace growth will slow down anytime soon.


The demise of brick-and-mortar shops

Sears, Macy’s, J.C. Penney, RadioShack and Toys R Us- What’s common among these retailers which were once household names in the U.S.? All of them announced the closures of their stores, citing one reason or the other.  While more than 5,000 stores were shut down in 2017, there have been around 2,000 store closures announced over the past few months.

Source: CNBC

What lies in the future

The rapid growth in mobile shopping and burgeoning online sales are likely to result in USD 1.1 trillion in spending in China this year. The future of e-commerce definitely looks promising. Once a company enters this online world, there is no turning back.

Whether you’re a single store owner just getting into the game or an e-marketplace owner with multiple vendors selling on your platform, e-commerce is going to give you more than you expected.

How to make your marketplace stand out

The statistics are impressive, but it certainly does not imply that it is going to be a cake walk for every e-marketplace owner out there. You would not want to be just another store waiting to get noticed by the customers who have umpteen choices in front of them. And if there is no customer at your marketplace, how will you convince vendors to open their store at your marketplace? Yes, we are talking about the famous or rather infamous chicken and egg problem.

To have an impact you need innovation and drive so that you have a unique brand that customers want to find. Tweaking your product to make them different for customers, changing how you interact with customers to generally how you do business- All of these could be considered innovative moves if you figure out how to differentiate from your competitors.


Get your priorities straight

With demands rapidly evolving, customer experience should always be your number one priority. Your customers expect shopping to be easy, convenient and targeted.

Try making it easier for them to locate the products they want. Strengthen your relationship with customers by embracing dynamic content, which differentiates your brand from your competitors.

Listen to customers in every way that you can. Conduct surveys, engage on social media platforms, develop a persona, create a customer journey map, or good old-fashioned phone surveys are the perfect ways to learn more and become better.

Advantages of e-Marketplaces

E-marketplaces reduce your marketing costs when compared with other sales channels. They provide greater transparency in the purchasing process since availability, prices and stock levels are accessible to all.

The key appeal of the marketplaces is that it enables a large number of retailers to take advantage of the growing e-commerce market through an infrastructure that’s already established and that’s well trusted by shoppers. So retailers can leverage foreign marketplaces, brands, and strategies to appeal to local markets while minimizing their investment risks before fully committing to other countries.

For example, China’s online marketplace Tmall which is operated by Alibaba supports international brands by offering local warehouse spaces and even consulting services on local trends and culture.

Marketplaces provide a flexible entrance to businesses that are looking to expand internationally while taking relatively small risks.

How to begin?

No coding experience? No problem! Don’t want any technical hurdles? Sure! Just follow these simple steps, and become a proud owner of a multi-vendor marketplace.

  1. Purchase a domain

  2. Get web hosting

  3. Install WordPress

  4. Install and activate WooCommerce

  5. Choose a theme of your own choice. (Here’s a list of themes that can be an excellent choice for your marketplace)

  6. Install and activate WC Marketplace

  7. Create Vendor registration form

  8. Configure payment settings

  9. Choose your commission for sales

  10. Add vendors and approve their products

  11. Start selling in your marketplace and earn money.

Why WordPress

If you want to have full control over your site and do not want any professional’s help, then WordPress is just the platform you are looking for! As an OPEN-SOURCE content management system, it has the power of hundreds and thousands of minds contributing to the betterment of the platform.

It comes with thousands of plugins, tools, themes, and integrations with plenty of modern online services. Need any particular functionality for our site? You name it, and there will be a plugin for it! Not satisfied with ready-made themes? You can edit and modify any theme in WordPress to your heart’s content.

An added advantage, WordPress is compatible with almost everything present on the world wide web. All these features make it the most preferred ecommerce platform. More than 30% of the top million sites (by traffic), that use a content management system, are powered by WordPress.

Why WooCommerce


WooCommerce today leads the ecommerce market, powering 42% of all Ecommerce sites worldwide. Isn’t that impressive? With that number, it’s way-way ahead of its competitors, the closest being Shopify which powers 7% of all Ecommerce sites.

WooCommerce provides great services, powerful features and it’s easily manageable. It comes with a large variety of customization options that are easy to use.

Why WC-Marketplace


While WooCommerce adds e-commerce functionality to your WordPress site, this amazing WooCommerce plugin called WC Marketplace allows you to set up a site like Amazon or eBay as it allows vendors to create individual stores, manage their inventories and shipping while you can earn commission on their sales.

Unlimited number of vendors can be managed at your store using this plugin. New vendor registration can be approved manually or automatically and can be managed with ease multiple aspects using bulk actions. In addition, you can set commission specific to a product, vendor or globally through the entire site. Payments can be done instantly with the click of a button, or schedule it automatically for a later time. Moreover, the plugin provides a form builder where admins can easily customize forms for the vendors.

The best part about WC Marketplace- It has several features (Eg. ‘Single product Multiple vendors’) in its FREE version, which the other multi-vendor plugins offer only in their premium versions. With over 180 five star rating and 9000+ active installs, it is one of the most popular marketplace plugins in the WordPress community.

In a nutshell

This is the best time to start an online Marketplace if you have picked your niche and have a clear vision on how to proceed further. When the CEO of one of the biggest sportswear brand says that “Our website is the most important store we have in the world”, you know that the time for starting a marketplace is here! Begin carefully, don’t promise or showcase what you can not deliver. Besides the combination of WordPress, WooCommerce, and WC Marketplace, all you need is the correct idea and right motivation. Think of a robust & smart plan & start enlisting vendors!

So what are you waiting for?


What is the best revenue model for your online Marketplace? Part-one

Marketplaces are earning huge revenues across the globe.

With 300 million active users and 2 million-plus third-party sellers in the pocket, Amazon is the big daddy of all. Ebay is not far behind with net revenue amounted close to 8.98 billion U.S. dollars. In June 2015 the room-rent marketplace Airbnb was valued at 25.5 billion U.S. dollars. The Uber app is available in 77 countries and 527 cities worldwide and has over 8 million users worldwide.

Four different marketplace success. One common thread.  They have all figured out their revenue path.

Many of the marketplace owners fail here. Why? Because they do not wait to research on-

  • Different marketplace platforms
  • Industry-best practices
  • The pros and cons of each revenue model

Let’s overcome them step by step-

Different platforms of marketplace :

Marketplace has six business model based on platforms-

  • B2B-Transaction between companies
  • B2C: Transaction between companies and individual
  • C2B: Transaction between customer and company
  • C2C: Transaction between customer and customer
  • B2E: Transaction between business to employee
  • Others: Transaction where the Government plays an active role. G2G (Government to Government), G2E (Government to Employee), B2G (Business to Government), G2B (Government to Business), G2C (Government to Citizen)

What does these marketplace offer?

All these six marketplaces use different platforms to connect their audience and vendors but their offerings are not widely polarized. They can easily be categorized under-

  • Product based marketplace (Amazon, Ebay, Etsy)
  • Service-based marketplace (Uber, Airbnb)

What are the available revenue options for the marketplaces?

There are three primary options-

  • Commission
  • Subscription/membership
  • Listing fees

All these three options have their shares of benefits and shortcomings. Which will be best for the product marketplace and service marketplace?

In our three blogs series, we have taken a shot at this question. Each one of our blogs will provide insights, data, and technical know-how to decide and set up the most fertile revenue model for your next marketplace.

The Commission Model 

All leading marketplaces (Amazon, eBay, Uber, Airbnb, Etsy) have selected the commission model for revenues. Why have they so much trust in a model where an admin has to split the earning with vendors? Let’s introspect-

Benefits of Commission Model:

1. First and foremost, admins get a share of every transaction and each value that take place at their platform. Same benefits are not available with the subscription and listing model.

2. In the commission model vendors do not need to pay an additional cost to list and showcase their product.  If the provider is not earning any value, the marketplace run by the commission model will not ask for a single buck.  The commission model is a big bet to win the trust of the vendors.

How are the marketplace leaders playing?

First, we will discuss product-marketplaces.


Amazon has two different commission models for small vendors (individual seller) who have limited number of products (less than 40) and pro-merchants. Have a look-

amazon commission model

As far as commission plans are concerned, Amazon has multiple breakdowns-

amazon commission model- revenue model for marketplace

Image Source

Sellers pay a referral fee for each item sold.

Amazon also charges for shipping and product delivery if sellers are using those services. The charges also get varied if someone is using the subscription services of Amazon. For example, Pro Merchant will not be charged the per-item fee.

An example of how much a seller makes money in Amazon.


Ebay also follows the commission model. They are charging a flat final value fee of 10% of the sale price. It varies as per product category.


Alibaba, on the other hand, has an interesting stance on their commission model.

Their largest website Taobao operates as a fee-free marketplace where neither sellers nor buyers are assessed a fee for completing transactions. However, Tmall which is Alibaba’s B2B marketplace platform for larger retailers charges the commission fee based on the category of the product sold.

Alibaba commission model

Image Source


Unique handmade and vintage art product marketplace Etsy follows the commission model along with listing fee model. Etsy charges sellers a commission for every sale which is 3.5%.

Let’s turn the table to the service-marketplaces.

Service-driven marketplaces have also opted for commission model.  As there is no product for a transaction, the marketplace provides a platform for “service fee”.

service-marketplace commission model


C2C marketplace Airbnb has followed the model and charges from both the hosts and guests.

1st) Commission from Property Owners (Hosts): Airbnb charges flat 10% commission from hosts upon every booking done through the platform.

2nd) Transaction fee from Travellers (Guests):. Airbnb charges 3% of the booking amount as transaction charges from travelers upon every confirmed booking.

Has it gone in their favor? Well, a report says, “With a total funding of $2.3 billion till date, the unique business model of Airbnb has even become stronger as people prefer staying at an Airbnb inn rather than a hotel.”

Lessons that we have learned:

The best revenue model for any product-marketplace:

Ebay and Etsy have listing fee. Alibaba (Sellers at Taobao pay to rank higher on the site’s internal search engine and generating advertising revenue.) follows advertising model. Amazon has additional subscription services for vendors.

But none of them have skipped the commission model which profited both the vendors and marketplace owner after every transaction.

Best revenue path for marketplaces in its initial phase:

Subscription model success depends on the additional services provided by the marketplace owner. On the other hand, vendors will reject the marketplace which has no strong audience base but run by the listing fee. Whereas commission model is hassle-free. Once vendor and admin come to a mutual consideration on the commission split-up, the cash-flow of the trigger will be autonomous.

Melltoo, a rising marketplace in Dubai has made the Commission model their strength and currently growing big.

Challenges of setting up a flexible commission model: 

Frequency to split commission:

Marketplace owner has to figure out the best possible frequency or time to split the commission with vendors. Will it be weekly or monthly?

Amazon disburses the commission by periodic bank transfers to the sellers’ account.

Flat fee or percentage on the transaction:

Marketplace owner must figure out the best possible options to disburse the commission. Will it be a percentage fee or a fixed amount or a model combining both?

Amazon charges sellers a percentage of each sale they make on the marketplace.

Global fee or different on product categories:

Will it be an equal fee for all vendors or there will be a different commission on per products?

Amazon charges referral fee which is different as per product categories. Plus, professional merchants who pay a monthly subscription fee of $39.99, they do not have to pay the $0.99 per item fee.

WC Marketplace, a complete marketplace solution helps to integrate these features. 

First, admin can select the frequency at which you wish to disburse the payable amount

commission model wc marketplace

Second, WC Marketplace allows multiple disbursal models to disburse commission as per their favorable option-

  • Percentage of transaction/sale value.
  • Fixed amount per unit.
  • Percentage of the transaction/sale value + a fixed amount per transaction.
  • Percentage of the transaction/sale value + a fixed amount per unit.

Admin just has to select their preferred commission type-

commission model wcmp

Third, If you go by the model of Ebay or Amazon where the marketplaces include the shipping charges or any other fee (tax, inventory management), WC Marketplace offer you simple integration. Look below-


comission model wcmp

Is it the best option for the marketplace?

For any new marketplace, starting with a commission model is a safe bet. Share of values. Check. Good bond between admin and vendors. Double Check.

But, you do not need to write off membership and listing fee models right now. They have their shares of exclusive perks and some leading marketplaces have grown in stature with those gems. Want to reveal those perks, keep your eye on our next blog.

Take me to the 2nd Part
I am ready to read the 3rd Part

How To Make Your Marketplace Stand Out In The Crowd

The phenomenal growth of ecommerce over the last half decade means two things, right off the bat – there is great opportunity to exploit and grow, and it’s a crowded street at the Sunday bazaar. Given the scope of ecommerce, it should come as no surprise that selling online is growing progressively more competitive.  With each day, new players are entering the market, pushing prices down and giving customers a wider playing field.



What does Trust Mean for Ecommerce?

Ecommerce penetration is growing progressively and at an ever increasing pace. More than 85% of the world’s population with access to the internet is already shopping online. The average global spending amounts to as much as 22% of disposable income across the board. B2C ecommerce sales in the United States alone totaled a record $304.19 billion in 2014, a year over year increase of 15.4%. Although the figures for 2015 aren’t in yet, there is more than a good chance that the trend has continued and will see us through this year as well.



Tackle Marketplace Challenges With Big Data

Business intelligence and how we understand what we need to deliver has come a long way since the early days of ecommerce. Gone are the days when predicting customer behavior was all about taking random stabs in the dark, trying to figure out the next trend. What we had back then can only be described as a mostly inefficient ecommerce machinery at best. Fast forward half a decade and we are well into an age where data driven decisions are valued above all else. The fundamental tendency of data being more accurate than human intuition in a wide variety of situations is what makes data driven decisions the better option on the table. As far as ecommerce is concerned, big data is not just a buzzword that we need to take a passive glance at. Given how every soul across sectors have been touting it as the ultimate tool to drive growth, we should do well to take a closer look at it and what it can do for ecommerce.


Why Your Marketplace Needs to Appeal to Millennials?

Now we have read enough trade articles, news reports and marketing blogs to know that millennials are THE market segment that any B2C venture should be targeting right now. I have to agree with each and every one of them too. The numbers say it all. They are larger than the Baby Boomer generation – one of the most economically prolific segments in history, and at least three times larger than Generation X. Add to that the fact that the average millennial’s purchasing power which totals to $1.3 trillion annually far exceeds that of the preceding Generation Y which capped out at a nominal $600 billion per annum.


Marketplace Shopping Cart Abandonment: Reversing the Bleed

Setting up an online marketplace requires considerable time and effort. Growth in ecommerce and the wide acceptance of marketplace models across industries have transformed the digital commerce a lucrative goldmine. However, deep underneath the glitter and trumpet of success stories there lies the challenges and setbacks. To start, for every marketplace, the process of converting the marketplace visitors to actual customers pose a massive obstacle. Once you overcome the first challenge, there comes the next juju– “Shopping cart abandonment“.

Isn’t it frustrating when your prospective customers add products to their cart but finally decide against purchasing the product at the very last moment? You have launched your marketplace after sorting out millions of issues- product layout, shipping and more, you realize that your efforts are fruitless as the conversion bucket is zero.

Shopping cart abandonment is a major challenge affecting the e-commerce sectors across industries- 



Statistics Source

Before finding the way out, let’s dig more data on “Shopping Cart Abandonment“.



Drop Shipping – Is it meant for you?

E-commerce is on high. Sales are predicted to top $27 trillion in 2020.  In other words, business is good. If you are looking to break into the scene this year, prospects look promising. On the other hand, if you have already built up a name for yourself in the world of ecommerce, you can always look forward to growing your business, implementing more efficient strategies and pushing down your bottom line some more.


Web Stores Vs. Marketplaces Round – I

The eCommerce landscape is an ever expanding territory in a state of constant flux. With every new piece of technology developed and introduced to assist sellers sell better, there is a significant shift in direction. However, with great opportunity comes a healthy margin of risks. The problem of plenty demands a cautious step. Whichever direction you choose to veer towards, the opportunities are fantastic but the possibility of encountering any numbers of traps coexist.