Tackling Multi-Vendor eCommerce Solutions
Those of you who have taken the plunge and dug deep into eCommerce platform research have probably noticed a few mentions of “multi-vendor” solutions (often tucked into the corner of the “Pricing” webpage with a little one-paragraph-description and a four digit price tag).
If so, you might be wondering what exactly are these multi-vendor solutions? Do I need one? Why are they so expensive?
Fear not, ponderous merchant, I have done the Googling for you, and I’ve got your answers.
Multi-vendor solutions are essentially software programs that let you build a marketplace where multiple vendors can sell on one site: Create-Your-Own-Etsy, in other words. You, as the owner of the site, are not required to own any inventory yourself (unless you decide to sell on your own site). Instead, your revenue comes in as a cut of your vendor’s profits.
I know what you’re thinking. Sounds like some great passive income, right? And, yeah, it sort of is, but setting up and maintaining a successful marketplace isn’t easy, not by a long shot, not with competition like Amazon, eBay, and Etsy.
There are a few things to keep in mind when considering your own marketplace. First and foremost, you’ll have to decide on a niche market in order to avoid competing with Amazon; no one battles that giant and wins. Decide on an audience for your marketplace (i.e. knitters, Corgi owners, or college students who want to exchange their old textbooks) and stick with it.
You’ll also need to consider the type of software you should use to develop your platform. With a multivendor solution, there’s a lot to consider, beyond just price. You’ll need to factor in ease of use for two different admin panels: the one that you, the site owner uses, and the one that your vendors use. You’ll also have to consider how the software handles payment processing, as well as the overall design of the store. It’s also a good idea to look into the customer support offered by each software company.
I have compiled a short list of three different multivendor solutions. There are lots more solutions out there than just these three, naturally. The reason I selected these vendors specifically is because they do not require add-ons to get off the ground. All three of the solutions listed below have out-of-the-box multivendor functionality. So, while I cannot assure that they are the best solutions, they should be among the easiest to set up.
Yo!Kart is the only solution I’ve found so far that deals exclusively in multivendor solutions. They are a part of FATbit Technologies, and have a specific focus on helping startups find the technology they need to begin. Yo!Kart’s platform comes in three packages, which makes it possible for even startups to afford the platform.
Yo!Kart arranges their pricing in three tiers, which you can view below or on this webpage.
I’m particularly excited about their cheapest plan. $250/year is incredibly cheap for any sort of eCommerce solution, and especially for a multivendor program (with the added bonus of included web hosting!). After that one year is up, you’ll have the option to pay for another year on the platform or to purchase the license outright.
The only downfall with the single year license is that you aren’t permitted to do any customization on your site, which can certainly be limiting.
Who can benefit?
Many merchants can benefit from Yo!Kart, but they market themselves specifically to startups. Their plans are significantly cheaper than a lot of alternatives.
In my opinion, Yo!Kart’s most compelling aspect is that it was designed with multivendor selling in mind. That is its one and only purpose; is not just a shopping cart platform that evolved into a multivendor solution. Here are a few of Yo!Kart’s best features.
- Customer service. Every plan on Yo!Kart comes with one year of free tech support. You won’t find that on most other solutions.
- Customizable. Yo!Kart reports that their platform is completely customizable (except on their lowest plan).
- Payment solutions. Yo!Kart integrates with all the major payment gateways and uses Adaptive PayPal to handle funds management.
This is a very brief sampling of Yo!Kart’s features. For a better idea of what they offer, try this page.
Yo!Kart only offers one theme. In order to make it fit your brand and style, you’ll have to customize that theme. And, from what I’ve seen online, customization is not the easiest. Yo!Kart makes most of its features fairly accessible for the layman, but customization does not follow this trend.
Yo!Kart provides four separate demos on their site (and you can test all of them without entering any information at all). You see what Yo!Kart looks like to buyers, vendors, and the site owner. You can also demo a sample storefront. Click this link to access those demos.
As a fully-licensed software, both of CS-Cart’s solutions are available as one-time downloads. The multivendor solution costs $1450.
Although you only purchase the software once, in order to receive software updates beyond your first year, you’ll have to spring for an annual upgrade subscription. If you purchase your subscription within one month of the end of your first year, you’ll pay the reduced rate of $245. After that, your subscription will cost $385 for the year.
Click here for a more in-depth breakdown of price.
Who can benefit?
CS-Cart is not as user-friendly as Yo!Kart. It takes a bit more than your everyday web knowledge to operate your store (especially since you might have to work through some bugs). If you don’t have a solid understanding of code, you’ll need to hire someone who does.
For this reason, I wouldn’t recommend CS-Cart to startups; however, it might fit mid-size businesses and up.
The biggest benefit of CS-Cart is that it’s open source. That means it’s easier for developers to make changes–they have full access to the information they need. Here are a few other features you can find with CS-Cart.
- Vendor-Specific Shipping Methods. Your vendors can lists their own shipping methods to make fulfillment a little easier.
- Buyers can Purchase from Multiple Vendors in One Order. They will choose from the shipping methods listed by each individual vendor, but they can purchase products all at once.
- Unlimited Vendor Accounts. Allow as many vendors as you’d like. CS-Cart has no caps.
Click here for CS-Cart Multivendor’s features list.
The biggest problem with CS-Cart is its pricing. The software is expensive up front, and you have to keep paying in order to keep up with downloads. I’ve also seen a lot of reports on system bugs for CS-Cart’s eCommerce platform in general; I suspect you might encounter some similar bugs in the multivendor solution.
CS-Cart offers a free 15 day trial of their multivendor platform. You just need to provide your email address. Click here.
Like CS-Cart, X-Cart (see our review) is primarily an eCommerce solution for merchants looking to set up an online store. However, they also offer a multi-vendor solution. All X-Cart plans are one-time downloads of open source software. X-Cart is based on PHP/MySQL, so the ideal user will have a good understanding of those specific languages.
X-Cart has a fairly confusing pricing scale, mostly because they’re currently selling two different editions of their products. The multivendor solutions of the most recent version (X-Cart Version 5 a.k.a. X-Cart) costs $1495. The older multivendor (“Platinum”) solution of X-Cart Version 4.x (a.k.a. X-Cart Classic) is priced at $1795.
As with CS-Cart, after your first year on the platform, you won’t be able to receive any updates or upgrades unless you subscribe to an annual upgrade plan. If you purchase the plan within one month of the end of your first year (with X-Cart Version 5), you’ll pay $299.95. After that, the price increases to $747.50. There’s one flat rate for annual upgrade subscription plans on Classic: $299.95.
Who can benefit?
While even smaller merchants can use X-Cart for their platform, it’s probably best for mid-size to larger businesses. X-Cart requires some technical ability (especially in the PHP department). If you can’t supply that experience yourself, you’ll need to hire someone who can.
For the sake of concision, we’ll be focusing specifically on the top features that are available under the more recent product (X-Cart Version 5).
X-Cart Multivendor is unique from other solutions in that it allows you to run your marketplace in two different ways. You can set up shop under either of the two following functions:
If you plan on storing and shipping your vendors’ goods for them, warehouse is the way to go. Warehouse assumes that all goods will be shipped from one place, and only allows vendors to read their orders; they cannot edit.
2. Vendors as Separate Shops
This is the more typical multivendor model. Vendors all manage their own corners of your site, and they can list their own addresses and shipping methods. Your vendors are in charge of processing their own orders.
Here are a few additional features you’ll find on X-Cart.
- Buyers can Purchase from Multiple Vendors. They’ll have to select different shipping methods from each vendor, but they’ll only pay once.
- Payment Management with PayPal Adaptive Payments. Adaptive payments divides up the buyer’s payment automatically and distributes the portions to both the vendor and the site owner at the same time.
- Customizable. If you’ve got the tech know-how I’ve been talking about, you can alter your X-Cart site to look and work how you’d like.
You can find more features listed here.
X-Cart comes at a hefty price for a merchant who’s just starting out. And with the costs of maintenance (upgrade subscriptions, web-hosting, SSL certificates), X-Cart can get even more expensive.
Customer support is also limited and expensive. If you’re looking for personalized support, you’ll have to pay for their services.
X-Cart offers a free 14 day trial of their multivendor software. You just need to provide your email address.
Making a Decision on Multivendor
I’d like to conclude by reiterating that multi-vendor selling is not for everyone. It takes a lot of blood, sweat, and tears to set up a marketplace and to convince vendors to sell with you. It’s even more work to draw customers in (especially when you’re up against the biggest names in eCommerce).
However, if you’ve decided that marketplace selling is the way to go (and you’ve got that niche market already in mind), I recommend trying out each of the solutions above. All of their demos are free and easy to access, and it’ll give you a better idea of which approach you’d like to take.
If you’re a startup, I recommend you pay specific attention to Yo!Kart’s platform (as they have lots of features at a lower price), while those with technical ability might be more interested in an open source solution like CS-Cart or X-Cart.
Best of luck, and happy marketplace building.