Why a Retail Marketplace is
a Great Business
Okay, you’re planning to launch a retail online marketplace. It’s a perfect time to do it now. A marketplace business model has a great forecast for the upcoming years and many niches are still not occupied by the big players.
Look at how fast the popular retail marketplaces grow quarter by quarter. Take Amazon: in the past two years, Amazon’s net income has grown by more than 50% and sales increased by 39% compared to 2017. The number of sellers and buyers also grows every year: now 1,000,000 small and mid-size businesses sell their products on Amazon and the number of Prime customers reached 100,000,000. This is happening to all the popular retail marketplaces now: for example, Etsy’s revenue has grown twice in the past two years.
Small and mid-size retailers, designers, and artisans love marketplaces because it is very easy to obtain an online storefront on a marketplace without developing an online store from scratch. Marketplaces offer huge traffic and tons of new customers.
Physical Products E-Commerce Marketplace
This is classic. Amazon, eBay, Etsy, dozens of Chinese retail marketplaces, and thousands of smaller players worldwide offer physical products. Brick-and-mortar giants are also going online with marketplaces—Walmart did, and it’s developing its online marketplace intensively.
A consumer’s product search behavior has already changed. Consumers don’t google for products. They go straight to retail marketplaces and search for goods there. 54% of consumers already start their product search on Amazon avoiding Google search.
You can divide physical products into two big categories: non-food goods and food. Both are great and have great potential, especially in specific niches where the competition isn’t strong yet. For which one are you going?
Whether you are going to sell electronics, clothes, furniture, or artisan products, the scenarios are similar. On your marketplace, you create categories and invite companies and individuals to sell their products in certain categories. Amazon, eBay, and AliExpress use this scenario.
A marketplace of handmade products also has a great potential—starting from 2011 the handmade products industry has grown up to 45% and still actively grows. Although there are a lot of artisan marketplaces including the top player Etsy, all of them are unique, with unique products and crafters.
There are thousands of types of non-food products but here are the most popular according to our data:
The most popular scenario. Consumer electronics will always be in demand. Electronic devices continuously evolve, new technologies, models, and devices are regularly released. Take a look at any top Chinese electronics marketplace such as AliExpress or JD.com. They set sales and income records every quarter.
Apparel and Shoes
Another super popular scenario according to our research. More people prefer to buy clothes in online marketplaces because of the greater range and lower prices than brick and mortar boutiques offer. For example, the British apparel and shoes marketplace Asos reported 26% sales and 19% customer engagement growth during 2018.
Home and Garden
People strive to live with comfort and always looking for things to make their living space more beautiful and convenient. This is a great marketplace scenario promising bigger revenue and loyal customers. For example, a marketplace of home remodeling and design Houzz.com has intensively grown in the past 4 years, raised $400,000,000 in funding in 2017, and by 2019 it has a website in 14 countries, 10,000,000 products from 20,000 vendors, and ranks #10 in Internet Retailer’s 2018 Online Marketplaces ranking. Impressive.
Health and Beauty
A promising industry that shows stable growth. In the UK, the health and beauty industry is predicted to grow up to 21% in five years. In the US, the industry has grown twice since 2012 and continues growing. It’s definitely high time to start a health and beauty online marketplace.
Buying fresh food products online becomes popular. It’s convenient and hassle-free: no parking problems, no queues, no dozens of heavy bags. Amazon is the current leader in selling groceries online but other big players such as Walmart has been offering groceries online for a while now and growing fast.
Forecasts predict that online grocery sales will reach 20% of all retail grocery sales by 2025 and will count $100 billion. Time to jump in!
Of course, there are many smaller online marketplaces that sell food products: sweets and cakes, fresh meat, and artisan food. You can even find super small farm marketplaces that help farmers sell their produce to local customers.
Digital Products E-Commerce Marketplace
When selling digital products, you save a huge amount of money on warehouses and delivery. You can sell digital goods worldwide and they will never run out of stock. Digital products don’t need to be transported and stored in special conditions. These are advantages that attract online entrepreneurs. Here are the four most popular digital product categories to sell in an online marketplace. Which one do you choose?
Software aggregators are the best and easiest way to distribute software. You can make a software aggregator out of your marketplace and give indie developers an opportunity to sell their software and games globally on profitable conditions. For example, Epic Games has recently created its own game marketplace with better conditions than Steam and other video game selling platforms offer. This attracted indie developers and drew them away from other platforms.
The E-book marketplace is a very promising niche: today people prefer to read on the go using their e-readers, tablets, and smartphones. This stimulates indie writers to self-publish their books. Indie writers usually don’t rely only on big e-book distributors like Amazon—they look for other publishing platforms with better conditions. And this can be your e-book marketplace.
In 2015, only 29% of music income came from CD sales and the number is declining. Digital music distribution has become the primary form of selling music. Your music distribution marketplace can become a great platform for independent musicians: you can both sell music and—what’s more popular—stream it as Spotify does. It’s a perfect time to catch this train.
Digital art includes photos, illustrations, vector graphics, and so on. There are millions of talented photographers, artists, and designers who want to share their work with the world and make a buck. And there are thousands of companies and individuals who are ready to purchase unique photos, illustrations, and graphics. You can become a middleman connecting them on your marketplace.
Why CS-Cart Multi-Vendor is a Perfect Solution for a Retail Marketplace
CS-Cart Multi-Vendor has all the functionality you’ll ever need to sell physical and digital products. And it has it all out of the box—no need for custom development and third-party add-ons. But not only functionality matter. Here are 4 reasons why you should open your retail marketplace on CS-Cart Multi-Vendor.
1. Full Set of Functions for Selling Physical and Digital Products
CS-Cart Multi-Vendor has over 500 eCommerce functions on board: SEO tools, promotions, reward points, and other marketing tools, functions for vendors, reports and analytics, and more. We’d like to focus here only on the specific functions for selling physical and digital products. CS-Cart Multi-Vendor has them all:
|✅ Powerful catalog management|
Fill the catalog manually or use a flexible mass product import, configure products by tweaking over 45 product properties, create an unlimited number of product features, filters, options, product variations, and product categories. Your vendors can do all this as well.
|✅ Bulk product editing|
Edit 45 product parameters in bulk for hundreds or thousands of products listed in your marketplace in a few mouse clicks.
|✅ Stock control and low stock notifications|
Vendors can track product inventory with options to track the exact number of items in stock. They can also change their stock control settings to “Track without options”. Besides, it is possible to disable inventory tracking if a vendor doesn’t need it. To restock in time, vendors receive low stock notifications.
Get extra customers from shopping directories such as Google Shopping and ShopZilla by uploading custom product feeds from your marketplace.
|✅ Shipping methods|
CS-Cart Multi-Vendor integrates with 8 major shipping carriers with dozens of shipping options for each. You can easily add more shipping methods and functions via third-party add-ons.
|✅ Downloadable products|
Multi-Vendor supports digital products distribution out of the box. You can upload files to sell, set the availability period and activation mode. Just mark the product as “downloadable” when you create it.
|✅ Cross-selling and upselling|
These are built-in tools to increase the average bill. You can display product suggestions on any page of your marketplace.
|✅ Common products for vendors|
You can forbid your vendors from creating new products. Enable them to only use listings created and designed by you. In such listings, vendors can only set their prices and quantity. Of course, you are free to allow your vendors to add their products as well. This function adds a comparison table to a product page. If a product is sold by several vendors, a customer can compare prices and choose the best listing.
2. Minimum Viable Product
Launching an online marketplace can cost you thousands of dollars. If you’re not sure that you will 100% succeed with your marketplace project, you won’t be ready to spend that amount of money for sure. We wouldn’t.
As our customers say, CS-Cart Multi-Vendor has a perfect price/functionality ratio, which means you can quickly launch a fully functioning eCommerce marketplace without spending a lot of money. Our Multi-Vendor software is a perfect solution to test MVP.
So, you’ve tested MVP and looks like your marketplace has great potential (of course it does!). Eventually, it will grow and you will probably need to adapt it to your changing business strategy.
Thanks to open source code and tons of ready-made add-ons, you can scale your Multi-Vendor marketplace vertically, horizontally, or how you need it. CS-Cart Multi-Vendor is very flexible and extremely scalable, which is confirmed by our customers.
You won’t be left behind after you buy CS-Cart Multi-Vendor. Our support team of professionals will always be at your disposal at the launch and after it. You will get 90 days of free technical support and you’ll be able to get assistance any time after these initial 90 days. Our support team will help you set up your marketplace, maintain, and upgrade it
Of course, this is just a small part of all the default functionality that Multi-Vendor can offer for your retail marketplace. Request the demo to explore all the functions.
Some Successful Retail Marketplaces Built on CS-Cart Multi-Vendor
Retail is the most popular business model and there are hundreds of awesome marketplaces out there. We picked these three to show you.
The biggest known retail marketplace built on CS-Cart Multi-Vendor. It counts 28,000,000 SKUs, withstands huge traffic, and it still works pretty fast. This marketplace offers a wide range of electronics, apparel, jewelry, accessories, car products, kid’s products, hobby and travel goods, and much more. Literally speaking, this is eBay for India.
Wikifarmer has been established as the Wikipedia of farming worldwide, according to the United Nations. Their knowledge base has been accessed by 4 million people worldwide, Wikifarmer is becoming a platform where people can search for anything related to agricultural production (agricultural products, availability, prices) and safely purchase online anything they want. Their mission is to empower and educate farmers across the world.
Yumbles offers yummy hand-made food directly from top independent UK producers. Each vendor here is an indie food maker. The marketplace unites over 1,200 small-batch food and drinks makers all across the United Kingdom. When buying from Yumbles, customers order directly from food producers.
- Yan Anderson is the Social Relations and Content Manager at CS-Cart. He's passionate about creating content that explains complicated things in simple terms. Yan loves writing and making videos about the ecommerce industry and technology trends. He manages this blog as an editor.