A multi-vendor marketplace is considered one of the most versatile business models, regardless of the niche or the industry. There are multiple examples of how this business works and how it can be applied with Spree Commerce.
According to data gathered by McFayden Digital, global ecommerce will be worth up to $4 trillion by 2020. The growth is driven by the increasingly important position of online marketplaces among all digital companies. In fact, many unicorns are marketplaces that operate in areas where there was previously no marketplace available.
It’s a compelling option for a new business but can seem daunting. However, building your own marketplace is much easier with the proper tech stack. Spree Commerce is a versatile and modern tool to fulfill these needs.
Vendo frees you from the burden of self-hosting and maintenance. Contact us now for a demo and launch an eCommerce platform at a fraction of a typical cost and within weeks instead of months.
What is Spree Commerce?
Spree Commerce is an open-source ecommerce platform built on Ruby on Rails and based on the latest paradigms that fuel modern solutions. It is already designed to deliver a Progressive Web App and power a headless solution by delivering the API to connect and integrate various components.
This flexibility-based philosophy makes the Spree Commerce software suitable for various applications be that a webshop, a side business for an existing platform, or a multi-vendor marketplace. Unlike other popular solutions, the Spree Commerce platform is equally effective in each of these functions. Focusing on the latter, we’ll explain the different types of multi-vendor marketplace and give you just a few examples which are built using Spree.
Types of multi-vendor marketplaces
There are multiple versions of the multi-vendor marketplace and this type of website can support various needs. Depending on the client base and the purpose, the most popular types of marketplace are:
- Multi-vendor B2C marketplace – The most iconic and common type of the marketplace. It is usually a website or app where end customers find vendors for services or goods. The target base is end-users of the goods, so the marketplace business model usually relies on a massive amount of transactions while charging relatively low commission fees to vendors.
The key profit comes from the large (sometimes gargantuan) scale. A smart marketplace owner can boost earnings by augmenting the offer with premium accounts for vendors. It is rare to expect customers to pay for using the platform but such a model is possible.
- Multi-vendor B2B marketplace – A common platform where companies and businesses can find supplies and materials. Also, it is popular to offer B2B services like logistics in a marketplace model. In this model, it is common to make the system less open and premium accounts are more common.
Business users also expect some functionalities that are rarely seen in the B2C sector like automated cyclical purchases, API integration with ERP software, and delivering the billing straight to the accounting department. In fact, building a B2B marketplace can be more programming-heavy than delivering a B2C one, despite the lower traffic and smaller client base.
- Multi-vendor horizontal marketplace – A horizontal marketplace aims to provide a wide offering of goods and is comparable to an online supermarket where the customer can choose a variety of goods to fulfill multiple needs.
Horizontal marketplaces can be seen both in the B2B and B2C sectors. The key is in delivering as wide an offer as possible to cover as many needs as possible. A horizontal marketplace is the closest thing to a historical market square in a town center. Customers can buy everything from food to home appliances and beyond.
- Multi-vendor vertical marketplace – The opposite of a horizontal marketplace; the offering is focused on a particular industry or niche, which can sometimes be extremely narrow. Having a strict focus on a business or service delivers highly profiled traffic and enables the company to forge specific added services.
The vertical marketplace can be both B2B and B2C, and the key is in understanding the need that is served and tailoring the offer. By delivering rare goods that clients are looking for, as well as driving highly profiled traffic to vendors, this type of marketplace can work with much higher commissions and entry fees. There are also several other ways to monetize the business that are rarely seen in other types of multi-vendor marketplaces.
Examples of multi-vendor marketplaces built with Spree Commerce
Spree commerce supports all types of marketplaces shown above.
Farmdrop
Farmdrop is a peer to peer grocery marketplace that connects farmers and eco-food producers with their customers. The key benefit from the platform is cutting the fees of middlemen that usually increase the prices of organic food.
With Farmdrop, London-based buyers can find a supplier nearby and get fresh and healthy food for a fair price. That means fair both for the buyer and the seller. It is basically a B2C horizontal marketplace with organic food.
Farmdrop proved to be successful and received a 3 million GBP investment. The platform was also shortlisted for the Bloomberg 2016 innovation award for changing the environment.
Gasido
A narrow B2B vertical marketplace, Gasido provides businesses with industrial gases which they need to operate. Industrial gases are challenging to transport and need to be strictly tailored to the needs of the business. Gases are also a part of strategic supplies so taxation is usually complicated, especially when ordering from abroad.
Considering all the above, there was a great need for a platform that simplifies looking for a vendor and Gasido filled the previously unoccupied niche. Spree Commerce proved to be versatile and flexible enough to provide search options supporting the needs of the industrial customer base. Also, the platform was enriched with tools to manage the vendors and their supplies, as the industrial solution needs to be reliable. Any unexpected shortage results in a halt in production and consequent losses.
Last but not least, the platform enriched the usually sturdy B2B shopping experience with exceptional UX that is the very foundation of Spree Commerce.
Garmentory
A marketplace is also a great way to sell luxury products. Garmentory is a platform that connects independent designers with customers who are looking for unique clothes, unseen in the retail chains.
The marketplace enables the small teams behind handcrafted luxury clothing and accessories to access a wide client base without the need to establish their own tech platform. On the other hand, Garmentory filters out the noise of larger fashion marketplaces that provide buyers with all types of clothing, making it difficult or nearly to spot something unique.
Today, Garmentory gathers over 400 boutiques that offer multiple types of clothes and accessories, enabling the customer to buy an ensemble outfit from numerous vendors in one place without hassle.
Scout & Nimble
Scout & Nimble follows a pattern comparable with Garmentory, yet the company offers a place to buy unique furniture and accessories for the home. Scout & Nimble delivers a unique UX that shows the true power in delivering a narrow vertical marketplace. The customer can basically “buy a room” previously designed by the designers who work as vendors of the marketplace.
A room can also serve as a base for building your own vision; everything is customizable and one can add or remove products. The platform is augmented with e-design tools to further enhance the shopping experience.
Stylemyle
Yet more proof that Spree Commerce is a great pick for the fashion industry. Stylemyle is based on the “discovery shopping” concept that emphasizes the fun in looking for new clothing or fashion accessories. Stylemyle focuses on delivering emerging fashion designers to an audience that is looking for something fresh and rarely seen on the streets.
The key advantage of Spree Commerce was speed, as the performance was a key element in delivering outstanding customer experience. To earn the trust of a wealthy target group, the platform had to deliver top-notch experiences, from graphic design to performance to reliability.
Milan Style
Initially, a men’s designer fashion marketplace, Milan Style struggled to deliver customer experience and processes smooth enough to boost the conversion rate. When the aging platform got replaced with Spree Commerce, the company could grow without worrying about keeping the lights on.
The replacement delivered clear advantages: a 45% conversion boost and smooth operation of a marketplace offering over 725,000 luxury products.
Maisonette
The Brooklyn-based platform delivers a way to dress children from head to toe in one shop, without the need to browse through a fragmented offering of merchants and vendors. Since its launch, the company has got $4.3 million in seed capital funding. With the growing potential of the children’s luxury fashion market, that’s no surprise. The stories of Milan Style, Stylemyle, and Garmentory show that Spree Commerce is a great pick for companies willing to deliver outstanding luxury fashion shopping experiences.
Surfdome
An example of a vertical, narrow B2C marketplace focused on delivering board sports accessories and fashion. The lifestyle-blended ecommerce platform offers over 10,500 products that are delivered to 60 countries.
The offer is curated by snow, surf, and skate experts that ensure the products are top-notch and the platform is a reliable source of high-end accessories for every board sports enthusiast.
The key challenge for Surfdome was to keep the dynamic growth while effectively scaling up the business. The company was looking for something reliable, scalable, and flexible – and that’s where Spree Commerce came in handy.
Summary
As the examples above clearly show, Spree Commerce supports various ways to build a marketplace. The solution is also flexible enough to be enriched with sometimes surprising features like “buy the room” seen in Scout & Nimble or extensive product customization seen in Gasido.
The possibilities are endless. So what is stopping you from building your own unicorn?
Vendo frees you from the burden of self-hosting and maintenance. Contact us now for a demo and launch an eCommerce platform at a fraction of a typical cost and within weeks instead of months.