How Can Multi Vendor Marketplace App Development Redefines Your E-commerce Business

In times when 58% of market revenue comes from online marketplaces, developing a multi-vendor app can be a step in the right direction for e-commerce businesses around the globe. The e-commerce industry is one of the fastest-growing and dynamically moving industries in today’s time. Every day new innovations take place with a common goal of […]

Updated 10 November 2023

Ajay Kumar
Ajay Kumar

CEO at Appventurez

Today, consumers can easily access millions of different products in a one-stop digital marketplace with a few taps. The popularity of multivendor marketplace apps is on the high rise, especially after leading companies like Amazon, eBay, and Etsy showed tremendous results. 

This is one of the key reasons why a large section of e-commerce enterprises is switching to multi vendor marketplace app development. But the question is, how and where to get started?

What Is a Multivendor Marketplace and How Is It Different From Traditional E-commerce Models?

A multi-vendor marketplace is a one-stop online platform where consumers can purchase products and services from different vendors. Typically, the marketplace does not manufacture products itself. Instead, it acts as a mediator between the consumers and sellers, forming a connection between them.

The traditional e-commerce models are used to focus on facilitating transactions between consumers and a single seller. Although there might be involvement of logistics partners, their role is just to fulfill specific requirements, such as shipment delivery, payment gateways, etc.

On the contrary, a multivendor marketplace app or platform can consist of a plethora of sellers dealing with the same product or service. The marketplace is responsible for all other aspects regarding the purchase for all the sellers associated with it.

For instance, if a buyer wants to buy a smartphone from Amazon, there could be multiple sellers selling the same handset. Depending on the delivery location, price, and availability of the product, customers can choose the seller best suited for their needs. For each seller, Amazon needs to ensure the logistics standards are strategically managed for timely deliveries.

How Does a Multivendor Marketplace App Work?

An online marketplace application offers a feasible platform to all parties – marketplace owners, vendors, and consumers. Vendors from different verticals sign into the app and register themselves along with the products and services they provide.

Consumers check out these online marketplaces and add their preferred products to their carts. Once they decide to buy a particular product and pay for it, the seller receives the payment.

However, vendors need to pay a commission to the marketplace owner for every sale. It’s not the responsibility of the marketplace to care about product inventory and shipping. Similarly, the vendor need not worry about the maintenance and marketing of the platform. It’s the marketplace owner who needs to consider all these aspects and maintain the performance of the app for a better experience.

What Are the Key Factors That Boost the Growth of the Online Multi Vendor Marketplace?

Of all the factors that lead to the popularity of the online multivendor e-commerce sector, digital transformation and its trends played a key role. Here are the major reasons why online marketplaces witnessed a significant rise in growth:


Affordable Internet Services with the Introduction of 5G

The emergence of the 5G Internet has unlocked the doors for businesses worldwide. This low-cost internet access significantly contributed to the growth of smartphones, making it easier for consumers to leverage e-commerce services. Consequently, the smartphone retail m-commerce revenue also increased, with projected growth to surpass the $400 billion mark by the next year.

Expansion in the Logistics and Supply Chain Market

The logistics and supply chain industries are expected to boom rapidly in the coming time. In fact, in the last few years, the funding for startups in the logistics market is almost doubled. Besides this, the global supply chain market is also projected to reach the $22 billion mark in 2023. This encourages online retailers to invest in e-commerce development as with an expanded logistics network, products could be delivered even to the remotest locations.

Rise in the Usage of Cashless Transactions

A large-scale acceptance of cashless payments and digital wallet trends helped e-commerce companies in the expansion of their business. As per recent studies, it is also forecasted that the revenue in the non-cash payments market will reach $1.1 trillion in 2023. Moreover, the adoption of BNPL solutions has also transformed the digital payment industry to a large extent.

What Are the Benefits of Multi Vendor Marketplace App Development?

When you build a marketplace app, you provide your customers with the convenience to purchase different kinds of products under a single roof. Due to this, businesses can easily attract a large segment of consumers and gain huge profit margins.

For instance, Amazon collaborated with thousands of vendors from different verticals and locations. Consequently, it observed around a 22% increase in its net sales even during the time of the pandemic – thanks to the online marketplace solutions.

Benefits of Marketplace App

Easy and Quick Launch of Products

With a multivendor marketplace app, sellers can easily register themselves and include their products in the marketplace for a larger section of the audience. They can easily focus on launching and selling their products and services without worrying about managing the platform, making it a favorable place to do business.

A Massive Range of Products

Generally, the business model of multi-vendor marketplace apps focuses on including sellers from different industries showcasing their products. It helps the consumers get so many options to choose from in different product categories.

Ease of Market Expansion

Multivendor marketplace app development ensures fast and convenient expansion of the market. You can easily bring in new products and services into the marketplace and expand it. Since you are providing multiple products in different categories, it becomes effortless to find and attract more customers.

No Issues Associated with Inventory

As a marketplace owner, you do not need to hold any inventory for the products showcased on your platform. Therefore, you don’t need to worry about the issues regarding inventory losses and management. Also, there is no requirement of investing your funds in stocking any product. It’s the seller’s call to stock up on their products if they want to carry on showing them on your multivendor marketplace app.

High Customer Engagement

No customer wants to scour multiple e-commerce websites for different products and services. In such a case, a multivendor marketplace app can be no less than a boon for consumers. With everything assembled in a single place makes things convenient for them, consequently increasing customer engagement.

Improved Brand Awareness

In an online multivendor marketplace, both sellers and platform owners complement each other and help in strong brand building. When the marketplace is a renowned name, such as Amazon, many vendors get recognized under its brand name and image. Similarly, when sellers having franchises of companies like Apple, Samsung, etc. are selling their products on an online marketplace, the latter gets significantly more popular.

High Profit Margins

Once an online marketplace becomes popular, there is a strong chance that customers and sellers will stay connected to it. It will be extremely challenging for a competitor to make their place – developing a similar-sized network with better and affordable offerings is possibly the only option. Also, when a marketplace is scaled up, the owner does not have to invest more in marketing campaigns; the marketplace speaks for itself. Subsequently, the profit margin increases to a large extent.

Enormous Data Generation

Since a huge community of customers access and engage with products and services, the marketplace generates an enormous amount of user data. This information can be analyzed to understand user behavior, preferences, and purchasing patterns to provide customers with better on-demand services. In fact, in many cases, the marketplace operators themselves use this data to step right into a new industry. For instance, Amazon has developed and launched several products in different categories under its own brand name ‘AmazonBasics’.

on demand app development services

How to Develop a Multi-Vendor Marketplace App?

Like any other application, multi vendor app development needs a specific set of requirements and processes. You need the right business architecture, monetization model, and technologies to build a marketplace app that attracts customers. Here are the critical steps of the multi-vendor marketplace app development process:

Pick a Suitable Business Model

The first and foremost step is to choose the types of products and services to be included in the marketplace. Based on them you can also pick the multi-vendor marketplace app development architecture and business model for your platform.

Mainly, there are four business models from which you can choose one for your marketplace platform:

  • B2B Marketplace: This model focuses on transactions between two businesses. Simply put, one business sells products and services to other businesses.
  • B2C Marketplace: This model focuses on transactions between a business and consumers. In other words, a business sells its products and services directly to customers.
  • C2B Marketplace: In this model, consumers offer their services to businesses. Promotional activities through influencers can be placed in this category of business model.
  • P2P Marketplace: In this business model, consumers connect with other fellow consumers and offer them products and services to buy or rent. For example, Airbnb is a P2P marketplace, where people can rent their property to a tourist for a stay.

There are a few other models that are less popular compared to the aforementioned business models. They are

  • G2B Marketplace: This model focuses on transactions between government bodies and businesses.
  • G2C Marketplace: In this model, there is direct business between government bodies and customers.

Choose an Appropriate Revenue Model

Having the right mobile app monetization model is extremely important to regulate and manage revenue generated by your business. Here are a few revenue models to pick one from:

Cost to Create a Multi-Vendor Marketplace App

Subscription-based Model

Being a marketplace operator, you can impose a subscription fee depending on the types of features you deliver to both customers and sellers. It could be like a membership where users can avail of extra benefits while selling or buying products through your platform.

For instance, Amazon introduced ‘Amazon Prime’ as its subscription-based model, offering additional features to the customers. Prime users can get free and faster deliveries on certain orders, avail of extra discounts, and access exclusive products available in the sale.

Commission-based Model

This is one of the most common and widely used monetization models in the case of online marketplaces. The owner of a marketplace charges a significant percentage of the transaction as a commission from the sellers. They only have to pay this amount when a real and successful transaction takes place.

The reason for the popularity of this business model is that it is highly lucrative for marketplace owners, getting revenue on every single transaction. The more transactions take place, the higher the revenue will be.

Listing Fee

The marketplace owners can also charge vendors for listing their products or services on the platform for sales. The listing fee is generally calculated according to the value of products and the number of days they are listed. Based on the type of visibility, a marketplace owner can distinguish and set specific amounts to be charged. 

Advertising Fee

It’s natural to have high competition when there are multiple vendors contending in a specific category for the same audience. That’s why online marketplaces provide vendors with an opportunity to promote their products with a minimal advertising fee.

Payment Processing and Logistics Charges

Whenever it’s the marketplace that processes a payment, a specific amount is charged as a flat fee. Also, if the vendors request logistics and shipping services from the marketplace owner, additional charges are levied on the transaction.

Consider the Must-have Features to be Incorporated

The next important step is focusing on the core multivendor marketplace app features to be integrated into your application. Here is the list of the essential functionalities you can consider for your platform:

Responsive Design

The UI design of your marketplace app must be consistent across multiple devices with different screen sizes and orientations. This increases the app’s response rates, improves conversions, and enhances user engagement.

Promotional Carousels and Product Banners

With this feature, one can easily display the best offers and deals on a variety of products and highlight them with the help of promotional banners.

User Profiles

This is a crucial feature that enables all users, be they, sellers or buyers, to store and manage the information regarding their interaction with the marketplace. The vendor dashboard consists of details like product listings, shipping information, personalized reports, payment methods used, etc. On the other hand, a buyer’s profile contains their personal information, order history, recently viewed items, wishlist, etc.

Admin Panel

With an admin panel, the marketplace owner can manage and operate the entire platform. It allows them to configure settings for suppliers, such as payment methods, shipping options, and product listings. Besides this, the operator can also make regular improvements in the marketplace as per user preferences and behavior for better engagement.

Strategic Data Management with High Security

A multivendor marketplace holds a massive amount of high-value transactional data. If breached, it could impose serious risks. Hence, it becomes crucial to use robust frameworks and implement technologies that secure users’ data and store it in a confidential manner.

Inventory Tracking System

This feature helps the vendors to keep a tab on their product availability, ensuring they don’t run out of stock for demanding products. The sellers can get low-limit alerts, automated options to restock inventory, and get insights into the products in high demand.

Order Notifications and Management

With this functionality, the vendors get a real-time update through emails or in-app notifications regarding new orders, canceled orders, or returned orders. Besides this, it also offers admin information about order status and processing time. Ultimately, these details could help the app share updates regarding the orders with the customers.

Moreover, with efficient order management, the admin can easily manage transactions, share delivery drivers, accept refund requests, etc.

Favorites and Wish Lists

This feature allows customers to save their favorite products for later. When a product is put into the wishlist, the marketplace can notify the customers when it is on sale or going out of stock to increase the purchase chances.

Search with Advanced Filter Options

In order to enhance the shopping experience, marketplace owners can provide customers with options to quickly search for desired products by filtering out the content. They can use specific keywords or sort the products based on price, size, color, type, or ratings.

Ratings and Feedback Portal

It is important to stay updated about what your customers think and say about your marketplace. That’s why it is critical to have a well-organized review and feedback system in-built into your app. This helps understand what your customers expect from the products and services you are offering.

Moreover, their feedback can also assist other customers in making informed decisions. In fact, it is reported that 99.9% of customers prefer reading reviews and feedback when they shop online. They also believe that the more reviews a platform has, the better its reputation.

Payment Gateways

Customers always like an online marketplace that offers them multiple options to transact for their purchased products or services. Therefore, make sure you integrate different payment methods, such as credit/debit cards, digital wallets, net banking, and pay-on-delivery options into your platform.

Loyalty Programs

You can offer exceptional deals and exclusive offers to your loyal customers or members for better engagement. Moreover, reward points-based loyalty programs can also be leveraged to encourage customers to shop more frequently.

Select the Right Technology Stack

The next stage is crucial, especially in terms of the development phase. Picking up the right tech stack is crucial as it profoundly impacts the app’s performance, responsiveness, and stability. All these aspects, in turn, influence user engagement, experience, and retention. 

For starters, you need to pick suitable frontend technologies to display content in an organized manner on the app interface. To build the underlying logic of your multivendor marketplace app, you have to choose one of the top programming languages recommended for app development.

Besides this, you will need automated frameworks with quick testing features. Also, one of the most crucial components of any e-commerce platform is a powerful and secure database having cloud capabilities. Lastly, you can look for the best cross-platform framework options in case you want to have a hybrid app. 

Develop a Minimum Viable Marketplace

One thing that you should always remember before building your online multivendor marketplace is that its first version is not going to be the last one. You can always keep updating your marketplace for better performance and functioning.

Therefore, investing everything in your first version of the app might not be a well-calculated move. Instead, the best option would be developing an MVP of your marketplace – a Minimum Viable Marketplace.

The primary objective of an MVM is similar to that of an MVP – getting to the market, building a network, and understanding the customers’ psychology. Once you feel that you are getting productive results and feedback, you can start working on the full-fledged marketplace.

How Much Does It Cost to Build a Marketplace App?

Determining the cost of app development depends on several factors and it is crucial to have an idea about all of them beforehand. Here are a few significant factors that impact the marketplace app development cost:

Type of App Development Company

The primary factor that impacts the cost of building a marketplace app is the type of development company you hire for your project. Depending on your business requirements and budget, you can either hire a professional agency or outsource your app development project.

App Complexity and Number of Features

Your app can be simple or complex based on the design and number of functionalities you integrate into it. The more complex your marketplace application is, the greater will be the cost of development. Therefore, make sure to pick only the essential and limited features.

Type of Platform

The overall marketplace app development cost can also vary depending on the platform for which you want to build a marketplace platform. For instance, you can either choose between a native app or a cross-platform application based on your business needs and target audience. Since native functionalities offer better performance than hybrid ones, the former are costlier to develop compared to the latter.

Typically speaking, the average marketplace app development cost can range anywhere between $15,000 and $250,000.

How Can Appventurez Help You with Multi Vendor Marketplace App Development?

Today, on average, 79% of US citizens make purchases online through multivendor marketplaces. This ever-growing popularity of e-commerce and online shopping encourages even brick-and-mortar store owners to develop a multivendor marketplace app.

However, building a marketplace app like Amazon or eBay might not be an easy task. You need to get clear about your business model and choose the right tools and techniques for robust multi vendor marketplace app development. But you need a professional on-demand app development company to prepare yourself for all these requirements.

Having years of experience in developing on-demand solutions, Appventurez can be your perfect marketplace app development partner. With robust and result-oriented on demand app development services, Appventurez makes it super easy to efficiently develop and launch your multivendor marketplace project.

marketplace app development


Q. How to create a multivendor marketplace app?

Ans. Identify your target audience and choose the business model of the multi-vendor marketplace app. Pick your product categories and consider a monetization strategy suitable for your business. Lastly, select a suitable tech stack for your application and develop an MVM followed by a full-fledged app once the former shows successful outcomes.

Q. Can Shopify be the right choice for multi vendor marketplace app development?

Ans. Shopify can be an effective tool for developing a marketplace app. However, it does not have multi-vendor functionality by default. Therefore, you need to pick a higher subscription plan or use third-party tools to make it work.

Q. What are the primary challenges that you might face while building a marketplace app?

Ans. In the beginning, there can be low-profit margins. Besides that, poor-quality products can ruin the brand image of your marketplace. Also, there is already high competition in this market, and grabbing your share in it could be immensely challenging.

Ajay Kumar
Ajay Kumar

CEO at Appventurez

Ajay Kumar has 15+ years of experience in entrepreneurship, project management, and team handling. He has technical expertise in software development and database management. He currently directs the company’s day-to-day functioning and administration.

Fill in the Details and Let Us Get Back to You

Our team looks forward to hearing from you and
these details will help us to get back

Join the global innovators

Global innovators

    Do you need an NDA first?

    5 + 9