Marketplace Best Practices
June 7, 2024
Marketplace Best Practices
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June 7, 2024
How to Find Vendors for Your Multi-Vendor Marketplace
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Some eCommerce companies fall into the trap of focusing too much on increasing demand for their products without considering the supply side. A marketplace that generates a lot of good buzz can only cash in on that traction if it has enough products to fill the orders coming in — and enough of the right products, at that.
So what’s the first step in keeping your supply in line with realistic customer demand?
The short answer is to find the right sellers for your marketplace.
First, what is a marketplace vendor?
Marketplace vendors are third-party sellers or businesses that offer products or services on a marketplace platform. They directly impact the marketplace's reputation, customer satisfaction, and daily operations.
Finding and retaining high-quality vendors can be more challenging than acquiring customers, but vendors who align well with a marketplace’s standards can help build an efficient and trusted platform that customers turn to.
Customers are drawn to marketplaces that consistently meet their needs, which platforms can only do with a healthy supply of vendors. So: ensuring that your platform is an attractive option for the right vendors will, in turn, create a compelling destination for customers seeking reliable, high-quality experiences.
Effective strategies for how to attract vendors and retain them include providing clear benefits and competitive commissions, streamlining the vendor onboarding processes, and giving ongoing support to keep up with their needs.
But before you can provide them with an enticing offer, you need to know how to find them.
How to find vendors for your marketplace
In order to build a top-tier vendor target list that aligns with your customer needs, you'll need to know who you're looking for and where to find them.
Below are 6 ways to find marketplace sellers.
1. Leverage your existing network
Tapping into your existing network to find vendors can significantly speed up the acquisition process.
Do you have any suppliers currently in your network? This is a great place to start. This can look like reaching out to individual people on LinkedIn or sending an email to friends and family to ask for potential introductions.
Leveraging your network can create a domino effect. Even if they're not the right fit for your marketplace, they can likely introduce you to other potential sellers in their network. And a personal introduction goes a long way. You never know who someone might have in their list of contacts!
2. Build partnerships
Building a partnership to find new vendors can often allow you to find many vendors at once, rather than one at a time.
Like any partnership, this means there's a value exchange taking place between two parties. When you build up your relationships with key industry players, like industry associations or other non-competitive businesses, you can benefit from the networks they’ve already established. In exchange, you need to get creative about what you're offering them.
Olivia Mihaljevic, co-founder and CEO of LIVD, a marketplace that sells benefits for employees, leverages partnerships as a major strategy for finding new vendors. She partnered with local universities and colleges so they could find more vendors, quickly. Olivia explains:
“We'd get in front of students as they were graduating,” says Mihaljevic. “We would pitch LIVD. From there, we were able to go from one-on-one to rooms with 50-plus potential suppliers and get them signed up on the spot to our platform.”
In Olivia’s case, she offers universities a way for their students to get exposure to new customers right after graduating, and they offer her a room full of potential vendors. Like all the best partnerships, it’s a win-win.
3. Contact vendors selling on other marketplaces
Some of the biggest marketplace sites, like Amazon, eBay, and Etsy, have top-seller lists you can use for inspiration.
Check out the vendor lists from top-selling marketplaces and note any sellers that would be a good fit for your marketplace.
Online directories can also be an excellent resource for finding potential vendors.
For example, you can use sites like Crunchbase to discover local startups or small businesses in your area that might be interested in joining your marketplace.
4. Go online and search for brands that fit your marketplace
You can always rely on a good Google search to help you find target vendors. Search for things like "best brands for X" or "fasting growing X brand."
Try Google's "People Also Ask" and "Searches related to" tools. These can give you ideas for potential vendors that may be a good fit for your marketplace.
Social media sites like X, Instagram, YouTube, TikTok, and LinkedIn can also help you with finding brands.
Search for relevant hashtags on X and Instagram to see what's trending. Use LinkedIn's "Companies" search function to find companies that match your marketplace niche. YouTube also has a “Trending” tab that shows all the most popular videos in your country, updating every 15 minutes.
5. Join social media groups and community forums
There are likely a plethora of relevant online communities that you can tap into to source new vendors.
Joining social media groups and forums and following influencers related to your marketplace niche can help you reveal potential vendors.
For example, if you have a marketplace for selling handmade goods, join relevant Facebook groups and forums like Handmade Artists Forum or Etsy Teams.
6. Look offline
Your multi-vendor marketplace can be an opportunity for offline vendors to scale up their business and reach a larger audience.
Visit conventions and tradeshows in your area and ask vendors if they sell online and how they find new customers. Stop by local farmer's markets and festivals to speak with vendors selling through this form of offline marketplace. Consider hosting meetups to connect with local offline vendors.
How to source the right vendors
Define your goals
Before you start reaching out to potential marketplace vendors, you need to clearly define what you aim to achieve with your marketplace. Your end goals will guide who you reach out to and help you communicate effectively with potential partners.
For instance, are you focusing on a niche market or aiming for a broader audience? Your goals might include becoming a leader in a specific sector, providing unique products not available elsewhere, or offering a superior customer service experience.
Consider the needs of your target market
Your marketplace must cater to the needs of your target market if you want to find success. This means understanding what those needs are and then ensuring that the vendors you onboard meet those expectations.
Market research can be done in a variety of ways, including building surveys, hosting focus groups, investigating the demographics of similar marketplaces, and reaching out to industry groups.
Nick Pinkston, founder and CEO at Volition, a marketplace that sells industrial components, began this research process by sending out surveys to hundreds of potential buyers to find out what their exact supply needs were.
“Our specific cold start was thatI had a few hundred account relationships and so I had them all fill out surveys of what supply they wanted. So I know that they would actually buy it. And then I went to those suppliers and got them on the system,” Nick explains.
Fill the gaps
Marketplace operators always need to be looking for any gaps in their supply where customers’ needs aren’t being met. The sooner an operator identifies a gap, the sooner a new vendor can be brought in to fill it.
For Katy Carrigan, CEO of Goody, a large consideration when finding new vendors is how to fill in th gaps. She explains:
“We have some individuals who are fully dedicated to sourcing and finding the right partners to come on the platform. Some of the things they look for when they’re going out to find those partners is’ is there a gap currently in our market that we don’t have any sort of items that interest or hobby? Now what are the highest quality? What are the coolest brands that fill that gap?’”
Finding the right vendors is no easy task
Knowing how to find vendors that are a good fit for your marketplace is a challenge, but it's possible when you know what you're looking for and where to find it. Understand the importance of curating your marketplace catalog, and search for resources to help you find the right vendors for your marketplace.
With the right strategy in place and vendor management best practices, you'll be able to build a strong network of vendors for your multi-vendor marketplace to delight your customers and boost your bottom line.
More resources on vendor acquisition and retention:
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