What Prevents Your Multi-Vendor Marketplace From Growing?

Maksim Komonov
What Prevents Your Multi-Vendor Marketplace From Growing?

You have already started your marketplace business, but it doesn’t grow as fast as you expect? Vendors are interested, but don’t take action, or maybe even dissatisfied? Visitors come, but do not purchase? It is necessary to change something urgently. What? Let’s sort out what prevents your business from developing.

Multichannel commerce support

Vendors are busy. They have things to do. Their time is their resource. If they spend it inefficiently, they lose money. Perhaps startups are willing to spend time launching a sales channel using your marketer, but existing businesses that already have other active channels – the sites, social networks, mailing lists, will not waste their time on creating products, uploading pictures and writing descriptions, updating prices and stock information.
The businesses that are ready to pay for listing on your marketplace need automation.

What can be automated on your Multi-Vendor marketplace


Product import

If you can provide vendors with the ability to quickly add a large number of products by loading feeds, this will speed up their entry into the marketplace by many times, which means they will start selling and making you a profit sooner.

Feed synchronization

It doesn’t matter whether the feed is on a hard disk or in an online service, the ability to automatically update the list of products and stock balances, prices, and images, makes the work of the vendor more convenient and easy.

Cross-channel synchronization

A very important point for the existing eCommerce businesses. If you can synchronize the product lists correctly with the store without creating feeds, this will be your huge advantage. Vendors won’t have to take additional steps to start selling on your marketplace.

Monetization options

No marketplace monetization strategy is universally applicable and frequently unexpected combinations work well. Here is a list of 7 most popular and successful monetization strategies we have seen.

1. Commissions

A percentage taken of a transaction is the most straight-forward and popular way to monetize online marketplace. Some of the most successful marketplace companies in the world, like Booking, eBay, Etsy, or Uber make extensive use of this business model. An advantage of a commission-based approach is that it can work already at a relatively low level of activity and scales very well.

2. Listing Fees

A listing fee is a simple fee for making your product/service available on the marketplace. To be able to successfully charge listing fees, a marketplace needs to have a size that is significant enough to make suppliers have a hard time ignoring it.

3. Premium listings

Some marketplaces charge fees for making vendors’ offerings more visible, most often through ranking them higher in search results. This is the main monetization strategy behind most classifieds platforms. Craigslist makes money out of this. In general, premium listings (and listing fees) are effective for marketplaces on which no transactions happen on the platform.

4. Charging the demand side

Fees on marketplaces are typically applied to the vendors (merchants). However, sometimes the opposite strategy can make sense too. Basically, it is the same commission but charged by the marketplace from the buyer for access or as an additional fee for buying at the platform. This works for the professional communities of high value within sensitive industries, like health, parenting, relationships, etc.

5. Pay-per-lead

If transactions happen outside of the platform, the pay-per-lead model might sometimes be the right one. This will feel like a referral program for the marketplace owner who’ll be generating leads to the vendor’s landing page and get a reward for that. The leads may be the clicks, emails or phone calls. It might make sense for the platform to offer a credits system to its users in which they pre-pay usage and then spend the credits on specific services within the platform.

6. Advertising

Selling ads targeted at your users can also be a successful way to monetize, but it requires big scale to be meaningful. Large social platforms, like Facebook, LinkedIn, Snap and Twitter monetize with ads exclusively.

7. Selling marketplace data

Listing on your marketplace may require to provide much data – address, contact information, company size, and revenue, etc. This information being relevant and regularly renewed may have high value for other businesses who target your users with their offers.
The greatest thing about online marketplace monetization options is that they work well in different combinations. You only need to find the combination that works best for you and generates you the most profit.

Vendor Micro-Store customization

One more effective tool to attract vendors and grow the business is allowing them to modify the look and feel of their micro-stores for the sake of uniqueness. Every business is looking for a way to stand out along with providing the shopping experience with is relevant to their products and works better.
Provide vendors with an ability to change storefront colors, fonts, and backgrounds with a built-in visual theme editor. Enable vendors to rearrange content on the micro-store pages without coding.
Another thing about personalization of the vendors’ storefronts is individual promotions and their schedules. Reinforced by marketplace listing of those promotions this option can boost the sales and raise the profit for the marketplace owner.


Surely there are many more aspects that have a negative impact on the development of your Multi-Vendor business, but the above stated are more common. Want to learn how to accelerate the development of your online business and increase its profitability? Consult the Growth Team.


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