What is a single vendor e-commerce website?

HomeE-CommerceWhat is a single vendor e-commerce website?

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Key Takeaways

Direct Customer Relationships: Single-vendor e-commerce websites foster direct interactions between vendors and buyers, ensuring personalized customer service and strong customer retention.

Cost-Effective Marketing: With a focus on the vendor’s own products, single-vendor platforms save on marketing and advertising costs, allowing more efficient resource allocation.

Simplified Market Entry: Vendors with an existing offline presence face minimal barriers transitioning to an online platform, streamlining the process of market entry and expansion.

Specialization and Brand Development: Specializing in a specific product range helps vendors build expertise and brand value, setting them apart from competitors and promoting long-term business growth.

Efficient Operations: Single-vendor e-commerce websites benefit from streamlined operations, reduced complexity, and lower training and maintenance costs, enhancing overall business efficiency and sustainability.

A single vendor e-commerce website is a marketplace platform. Only one seller can sell their product through it. A single vendor e-commerce website facilitates exchange between only one seller, i.e. the owner and multiple buyers. It’s better suited for entrepreneurs who deal in a small range of products and offer it to a limited customer base. 

Now, if you are a vendor who wants to develop an e-commerce website, there must be some questions in your mind. What are the features of single-vendor e-commerce websites? Do they suit my needs? 

Features of single vendor e-commerce websites

  • Relationship with customers: The owner himself is the producer. Thus, there is a direct relationship between vendor and buyer, as no intermediaries are involved. This ensures customer retention and a core customer base. There is no need for a third party to engage with customers or for their grievance redressal.
  • Marketing and advertising: They are different for multi-vendor and single-vendor e-commerce websites. The platforms advertise to both vendors and buyers. But, in a single-vendor platform, the focus is on customers. This is because the owner/vendor is the proprietor. No third-party products are offered. Thus, there is no cost to attract other sellers. This reduces marketing costs a lot..
  • Market access: As the vendor herself is the producer and already exists offline, the only challenge is to develop an optimum online presence via an e-commerce website. Thus there are virtually no market barriers to entry. The vendor is essentially trying to sell his products through a digital means, i.e. a website.
  • Negotiable terms and conditions: The buyer is in direct contact with the seller. Thus the scope of personalised terms and conditions is high. The owner can customise her product offers based on individual customer demand. There are no intermediaries.
  • Income sources: The primary source of income is the sale of products via the marketplace. Advertisement revenue by marketing a 3rd party product or service is based on the preference of the platform owner.

Advantages/scope of single vendor e-commerce website

  • Specialization: It goes without saying that if you deal in only a small range of products, you gain expertise in it. You can develop your niche and stay ahead of the competition. This expertise can ensure business growth and long-term survival.
  • Brand development: As your e-commerce website is under your brand’s name, it leads to the development of your brand value. An attractive and customer-friendly website ensures free marketing and attracts prospective customers.
  • Less complicated: From pricing to negotiation with customers, from web designing to bringing changes in various website modules, everything is streamlined as you are the sole owner. There is a low range of products offered. Hence very few tabs and modules are required on the website.
  • More potential for survival: Due to your expertise and product niche, you are more likely to survive in a recessionary environment. Almost no cost is incurred to attract more vendors to the platform, which enhances operating profit margins considerably. These costs can be incurred on innovation and new product development.
  • Training of staff: The training costs are less as single vendor e-commerce websites have standardized modules which are less complicated to operate. Further, the development and maintenance of the website can be outsourced to a third party.

If those features meet your needs, a single-vendor e-commerce website may be best for your business. 

Now, whenever you are thinking about online commerce or looking to buy anything online, you are probably thinking about Amazon, Flipkart, Snapdeal or other similar e-commerce marketplaces. These platforms are nothing but Multi-vendor eCommerce websites. 

Multi-vendor eCommerce websites

These websites, as the name suggests, facilitate interaction between multiple buyers and sellers. Here the owner doesn’t produce any goods but charges a commission on the facilitation of trade. The vendors can oversee the price, and stock level, whereas the buyers can choose from different sellers. The multi-vendor e-commerce websites provide numerous advantages like economies of scale, but they may or may not be suitable for your business.

Challenges of multi-vendor e-commerce websites

  • Saturated market: Big players like Amazon, Flipkart, and Ajio are already running successful multi-vendor marketplaces. Thus there are immense entry barriers. Due to a lack of pricing power, you are unlikely to survive in a multi-vendor e-commerce marketplace for a long.
  • Complicated web design: A link between multiple vendors, suppliers and customers needs to be established. Additionally, customer support, price details, and payment merchant facilities too are supposed to be provided. All this requires technical prowess, which is not only difficult to attain but is very costly.
  • Lack of specialization: The owner of the website has no niche and thus gets impacted adversely at the time of economic recession. Lack of specialization prevents core competence, without which survival in a globalized economy is very difficult.
  • High cost: An aggressive marketing strategy accompanied by huge price discounts and innovative schemes is indispensable for the success of multi-vendor platforms, as competition is very high. Additionally, both the development and maintenance cost of multi-vendor websites is considerable.
  • Little customer interaction: The vendors are unable to develop any personal relations with customers due to 3rd party involvement. This prevents goodwill development and may not be sustainable in the long term.

Now, if indeed a single vendor e-Commerce website is a boon for your business, the next question naturally is the cost of development of a single vendor e-commerce website.

The following are the factors that influence e-Commerce website prices:

  1. Website platform hosting costs– As the name suggests, it is the service to make a website available on the World Wide Web. It is similar to renting space to house a website.
  2. Development and design – This includes deciding the layout and template of the website. A lot of firms provide readymade solutions that cost less. But a customized template may also be developed based on the needs of the e-Commerce platforms. The design needs of a website grow as the business grows.
  3. Add-ons and extensions– These are the non-standardized features to make your website customer friendly and to differentiate you from other online stores. The add-ons constitute the principal variable costs of an e-commerce website as the product range may grow continuously, and different modules/ tabs may be required. Add-ons are essential in keeping your website state of the art.
  4. Maintenance costs– These are the day-to-day costs of running an online store which must be incurred by all online platforms. These costs are essential for keeping your website bug free and robust.

In actual money terms, it’s difficult to estimate how much website development may cost. The hosting costs may be standard. But, the add-ons and extensions vary. This is due to the different needs of each business. Moreover, the maintenance cost too varies from website to website. 

An estimate can be made based on the deals provided by industry leaders like Shopify, which offers its basic Single-Vendor services starting from rupees 1499/month. Thus an annual amount of rupees 15 to 20 thousand may be incurred to host a single vendor e-Commerce website with 3-5 pages in an online store.

Lenskart: An Indian single vendor e-commerce behemonth

If you look into eCommerce, you’ll probably find examples of multi-vendor e-commerce platforms like Amazon and Flipkart. Success stories of single-vendor e-commerce are rare. But, ones like Lenskart’s set a precedent for the industry. 

Lenskart provides eyewear accessories. It manufactures and sells a wide range of glasses and lenses. It started as a digital portal for lenses. But today, the Lenskart website uses advanced AI to analyze face shapes and suggest ideal glasses designs. Lenskart has alone changed how we see glasses. They went from a medical need to a fashion choice. In this way, Lenskart has truly revolutionised the eyewear industry of India.

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Lenskart specialized in eyewear. This is the key feature of all single-vendor e-commerce websites. Similarly, its website grew with time to host more than 5000 designs and a 3D digital module which allows AI-based trials for sunglasses. Due to continuous innovation in its web design and products, it gained brand value which was difficult to copy by others. The success of the online website led Lenskart to establish brick-and-mortar stores. It currently has around 550+ stores across 30 cities in India.

Lenskart acquired the status of a unicorn in 2019 and there is no reason why your single vendor e-Commerce website will not attain the same status. Any business can start with a basic website. It would only list products. Over time, it can add features like payment gateways, SMS alerts, and AI chatboxes.

Conclusion

It is almost impossible in today’s day and age to grow your business exponentially whiteout the help of websites. Most of us make and sell fancy products. But, we are limited by our small area and high costs.

Not anymore. You can grow your business beyond your area and even globally. Do this through a single-vendor e-commerce website. In the digital realm, the sky is the limit. Reach out to us at Expand My Business and let us help you in developing your single vendor e-Commerce website.

FAQs

Q1. What is a single vendor e-commerce website?

A single vendor e-commerce website is an online store that is owned and operated by a single business or seller. It allows the seller to list and sell their own products directly to customers without the involvement of third-party vendors or suppliers.

Q2. What are the benefits of a single vendor e-commerce website?

The benefits of a single vendor e-commerce website include greater control over product listings, branding, and customer experience. It allows businesses to have complete control over their sales process, inventory management, and customer data. This can result in improved efficiency, better customer service, and higher profits.

Q3. What are the limitations of a single vendor e-commerce website?

The limitations of a single vendor e-commerce website include limited product selection and potential customer reach. Since the website only offers products from a single seller, customers may have fewer options to choose from compared to a multi-vendor marketplace. Additionally, single vendor websites may have limited visibility and reach, which can make it harder to attract new customers.

Q4. How do I set up a single vendor e-commerce website?

To set up a single vendor e-commerce website, you will need to choose a platform or software that supports single vendor functionality, such as Shopify or WooCommerce. You will also need to create product listings, set up payment and shipping options, and configure your website design and layout. It is important to ensure that your website is secure, mobile-friendly, and optimised for search engines.

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