Key points to consider when building Multi-Vendor Marketplace on Shopify

Key points to consider when building Multi-Vendor Marketplace on Shopify

Wednesday, March 2, 2022 - 4 min read

Shopify is a marketplace platform; however, it lacks multi-vendor capabilities out of the box. If you want to use the Shopify e-commerce platform to establish a multi-vendor marketplace, you'll need to either use a Shopify app with subscription plans or work with a development partner to build unique marketplace features on your Shopify website.

Important Pain Points to Consider for Marketplace Owners

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Shopify Market Multi-Vendor

Supporting various seller profile pages, providing excellent customer support, and assuring accurate and fast order fulfillment are just a few of the challenges marketplaces face when compared to e-commerce websites. In order to properly manage a Shopify marketplace, marketplace owners must address the following important points:

  • Payment

  • Commissions

  • Customer service

These crucial areas don't have to be a source of frustration, but when you have several suppliers on a Shopify marketplace, problems might arise.

Payment

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Decide the payment method

Payment must be shared between the seller and the marketplace on marketplace websites. In most cases, the marketplace will accept payment and then distribute the funds to the sellers after deducting any costs and commissions. 

Marketplace administrators may use add-on programs like Stripe Connect to manage payments, seller revenues, and commission fees. You should also think about payment options. You can conduct more business if you allow a variety of payment options. When you add more suppliers and acceptable payment methods, however, keeping track of payments becomes more difficult. The first step in setting up your Shopify marketplace should be deciding on your payment method.

Commissions

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Figure out commission rate

The majority of the money that marketplace websites generate comes from commissions on things sold on their platform. If you're going to start a Shopify marketplace, you'll need to figure out what your commission rate is going to be. You must also determine whether or not purchases including items from various sellers will affect your commission rate. When regulations are not well disclosed and implemented, commissions can become a source of frustration on marketplace platforms. Sellers should be aware of their commission rate and when it will be applied. You must also make certain that your commissions are distributed properly and equitably across your marketplace. Vendors may become angry if they learn that you charge certain sellers more or less than others, and your business relationship with them may suffer as a result. Customers and merchants must be satisfied on marketplace websites, which is a unique problem.

Shipping

One of the best things about having a marketplace is that you don't have to worry about stocking up on items or sending them to buyers. However, so that you don't offend or anger your clients, your marketplace's shipping charges and policies must be clear and consistent. While you won't be delivering or completing purchases, you may make sure that your marketplace's delivery procedures are consistent.

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Unify shipping method

Customers will most likely purchase things from numerous sellers in one order. Having consistent shipping methods across your marketplace can help you prevent consumer misunderstanding and keep shipping costs and rules consistent across sellers. Uniform shipping techniques also make it easy to trace purchases and ensure timely delivery.

Customer Service

When you encounter a problem in a typical retail environment, you can seek help and support from the business or vendor. In a marketplace, who do you contact for customer service? The most difficult problem that marketplace administrators have is coordinating customer support efforts with their vendors.

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Figure out the customer support procedures

It makes the most sense for marketplace administrators to handle customer support concerns in a consolidated way, yet administrators may not have access to critical vendor product information. If you're building a Shopify marketplace, you'll need to figure out your customer care procedures and make sure they're followed across the board so you can provide a good client experience. When client problems and complaints are sent back and forth between vendor and admin, it's easy to lose track of them.

Although Shopify does not provide e-commerce companies with default marketplace solutions, it is still a strong e-commerce platform that can be utilized to establish a slick, professional online marketplace. Marketplaces have a variety of drawbacks that single-vendor e-commerce companies do not have to deal with. Although Shopify provides tools to help alleviate these issues, it may be more cost-effective to collaborate with a development partner to create unique solutions that are tailored to your specific requirements.