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Chris Reddick (President and CEO of Clarity Ventures) and Ron Halversen (Vice-President of Sales and Marketing) continue their discussion about vendor marketplaces.  

Part 2 of a 4-part series (Return to Part 1)

CHRIS: What is a marketplace? This one's really interesting for a lot of our clients that we work with. Ultimately, one of the big challenges with vendor marketplaces is they tend to be selling things that are more complex or require a lot more detail to fulfill. One example is a pool company that has relationships—it's really a buying group or group purchasing organization—but effectively, it is a marketplace eCommerce because we have all of these different vendors that we're collaboratively bringing into this marketplace and enabling the different buyers to access these folks. 

There's a membership that's involved, and, based on the purchases within a certain time period, there are rewards. Generally speaking, the concept of the vendor marketplace tends to be around physical items. But we have a lot of our clients that we work with who offer some form of membership to enhance that—think about Amazon Prime, it's a similar concept—to enhance the offer. Maybe offer more rewards or a bigger discount, these things for a bigger commitment that they might make.

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CHRIS: In addition, you also see a lot of actual services that can be offered with some of the different eCommerce marketplaces that we've done. So it's not just restricted to physical items, it can be digital items, digital products, or even services as well; it can really span the gamut.  

Another example is we work with a lot of groups that supply physical items for franchises. This is a pretty classic example where a franchise needs equipment. Maybe they need all the different logo-branded apparel for their location when they spin up a new store for all their team members. You know, these are the types of things that you typically are going to see in these types of marketplaces. And they can be highly customized, they can be highly catered to that exact vendor's sort of customization for their end user. 

RON: The thing that's unique about these vendor and buying groups marketplaces is the shipping, right? Because when I go to Amazon and, if I don't buy via Prime—typically prime means that that's one of the few items that FBA Amazon (fulfillment by Amazon) is actually stocking on behalf of the sellers. So Amazon can guarantee to ship it quickly, although they just announced in the news that Prime doesn't guarantee two-day shipping anymore. So I'm not really sure what we get with our Prime memberships.  

If I go to Amazon and I buy six items, there's a likelihood that those six items could be coming from six different vendors, and it has to be drop shipped from each of those locations. So when you're looking for a eCommerce platform, ensure that the platform can handle either split or targeted shipping. 
 

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RON: What that typically means is, when they go to place an order, the platform is smart enough to know where each item is being fulfilled from. And if three items are coming from one vendor and the other three items are three different vendors, split shipping literally splits it into four separate orders so that it can send those orders to those four different vendors for fulfillment. 
 
Then those four vendors have a separate suborder that when they reissue back their tracking status and/or delayed status or whatever the status might be, they can contact those sellers directly, independent of each other. There's a lot of complexity there that vendors and buying group marketplaces need. So make sure when you're researching the platform to ask those types of questions, especially about the vendor and buying groups. 
 
Buying groups are very similar to vendors, almost wholly buying group marketplaces or vendor marketplaces. But as you just talked about, they usually have additional membership, rewards points, different levels, things like that.  

Continue to Part 3 to learn about online auction marketplaces.

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