Vendors play a major role in the success of your marketplace, by contributing to the quality and variety of your range, the competitiveness of prices, and customer satisfaction, especially by ensuring that products are delivered in the best conditions. However, recruiting them can often prove to be a serious challenge.

There are two strategies you can use to attract sellers: automatic or “inbound” recruiting, when the seller reaches out to the marketplace, and proactive or “outbound” recruiting, when the marketplace contacts the seller. In the first instance, sellers spontaneously gravitate to your marketplace, thanks to your reputation or partnerships with other sites (blogs, flow aggregators, etc.) that recommend your platform. Most often, they sign up autonomously through a fluid onboarding process, using a specific interface. However, though you may save money and time, you have little control over the quantity and quality of registered vendors. If you wish to better control these criteria, opt for proactive recruiting, where it is up to you to identify and prospect the sellers yourself. On the other hand, this method is more time-consuming and costly.

Are you wondering which strategy you should use to source qualified vendors that match your brand image? Follow our advice in this article to tackle each stage in proactive recruiting: identifying, recruiting and registering sellers.

Stage 1: Identifying vendors

Define your need

Before looking for new sellers, ask yourself what your marketplace needs in terms of:

  • Product categories
  • Quality
  • Brands
  • Price level
  • Etc.

To do this, start with your customers’ needs and your brand positioning. For example, what products are the most sought after by your customers? Are some of them missing from your catalog? In this way, you can identify sellers that are likely to respond to these needs and define your strategy. Are you looking for high-performing vendors in terms of gross merchandise volume or consumer sales units? Vendors with extremely competitive pricing? Vendors with fast delivery times? Vendors with top products on other sites?

Then, establish your seller selection criteria:

  • Direct brands or resellers
  • Location
  • Customer ratings and reviews
  • Number of product references
  • Etc.

Be attentive to the capabilities of your vendors so as not to damage your quality of service. They must be able to easily absorb the incoming flow of new orders from your marketplace, respect delivery times, offer order tracking, answer customer questions and provide good customer service.

Find vendors

Once you have defined your selection criteria, you can search for sellers that meet your needs.

Gather all relevant information (vendor name, country of origin, ranges and products, price positioning, etc.). You will need to devote tools and human resources to this. You can also prospect at professional trade fairs, dedicated to your sector of activity or profession, where you may be able to meet retailers. Regularly monitor the competition in vendor segments that correspond to your marketplace.

Out of all your identified prospects, compare the vendors in this data base to those in your existing data base to filter them and keep only new vendors.

It is essential to then rate and rank vendors by applying scoring rules according to the criteria defined earlier. The aim of this stage is to be able to determine which are more valuable to you and therefore should be contacted as a priority.

Establish priority vendors

As soon as you know which sellers to approach, find a way to contact them. To do so, you will need to gather all the basic information needed such as email address and phone number, as well as potentially additional information about the range of products sold, turnover, etc. To collect this data, consult the vendor’s website and social media, especially LinkedIn, to find out who to contact in their teams. You can also call on external service providers to help you.

Add this information to your CRM platform

To track your vendor recruitment, add all the information gathered to your customer relationship management (CRM) platform. You will pitch many vendors who are not all at the same stage of your recruitment funnel. You will therefore need to manage separate different issues, languages and conversations. The CRM will allow you to track all exchanges and actions performed, and make this information available to all.

Insertion of vendor information in the CRM platform

The CRM (Customer Relationship Management) platform

Write down information from calls, draw up minutes and plan future actions, like sending follow-up messages. Creating records for each vendor will allow you to precisely follow up and therefore facilitate the management of your vendors once they have joined your marketplace.

Stage 2: Recruiting vendors

Contact vendors

Once you have gathered this information, it is time to contact the vendors. Your teams will need to speak multiple languages. You may sometimes need to establish a team dedicated to a country or language, such as Chinese vendors who have specific challenges. The aim is to present your marketplace and customers to them. Prepare a presentation document with clear answers to their questions to convince them.

  • What categories of products do you sell? Which perform the best?
  • To which customers?
  • Via which pathway?

Vendors may also wish to know if your marketplace will offer them more visibility. Here are the questions that they might ask on this topic.

  • How many visitors come to your site each month?
  • How many active customers do you have?
  • What is the average cart value?
  • What is your site’s growth?
  • What are the visibility solutions?

Prepare a presentation with key figures to show vendors the potential gross merchandise volume (GMV) that your marketplace could offer them: quantities of merchandise, sale prices, etc.

Also, anticipate any technological prerequisites. For example, if you are connected to a flow aggregator, emphasize how easily the flows from the vendor and your marketplace will be synchronized.

If you offer additional services, talk about them too. It may interest vendors to simplify the management of their operations:

  • Management of currencies, VAT and other taxes
  • Management of customer relations
  • Storage and/or delivery thanks to a fulfillment service
  • Etc.

Lastly, prepare yourself to answer questions about the rate of commission, how well-known the marketplace is, the time needed to become active, the onboarding process, and KYC support. How do you support vendors? For how long? Only during sign-up or to develop sales as well?

Decide on terms and conditions

While a model of commission based on sales is attractive to vendors, as they only pay for what they sell, on the other hand, a paid subscription model may be an impediment, as may be a very high rate of commission. Offer a promotional welcome package and potentially discounted rates on commission, subscription, logistics services or marketing monetization. Of course, you are under no obligation, particularly for vendors who sign up automatically. However, it is strongly advised for your top target vendors that you wish to recruit at any cost. Once the vendor agrees to the terms and conditions, indicate the next steps for registration.

Stage 3: Registering vendors

Fill out the sign-up form

To start the registration process, sellers must fill out a form to sign up to your marketplace. Create a clear, explicit form, and provide information about the registration process.

Registration on the cdiscount marketplace

First page of the registration form for the Cdiscount marketplace

You can potentially add an FAQ section to respond to common questions, so that vendors can register autonomously. Offer a way to contact you in the event of issues and ensure you remain available to solve any problems and guarantee that the form is filled out correctly.

Manage the KYC procedure

Before the vendor can post its products on your marketplace, it must provide documents to verify its identity and the legal existence of its company: this is known as KYC (Know Your Customer). KYC is a regulatory obligation and makes it possible to secure the collaboration between vendor and marketplace operator. Sellers must provide the necessary administrative and bank information for its company and send them to the payment body (approval issued by the French Prudential Supervision and Resolution Authority [ACPR]). It will verify the validity and veracity of the information before taking payment from the buyer (cash-in), blocking the funds and remunerating the vendor (cash-out). Do not underestimate this crucial stage!

Try to make it as fast as possible by explaining the process and prerequisites in detail, and provide an exhaustive list of the documents required. Keep in mind that the complex administrative processes required to join a new channel is often the main reason given by e-retailers who do not join a new marketplace. Stay in regular contact with the seller all throughout the process and give them visibility on the next stages of uploading their catalog and ranges.

Octopia registration space

Octopia vendor registration space

Create the store, products and ranges

While the KYC process is being finalized, you can start to prepare for launch by creating the vendor’s store, but blocking the products on your site so there are no sales. The vendor can prepare their store page (settings and display) and import their catalog, then create their products. They can then define their offerings for each product. Be clear and explain your prerequisites to help them define their pricing. It is important to accompany sellers, for instance with a help center including an FAQ section, tutorials, videos or articles. You must also offer dedicated teams to help in the event of difficulties.

Octopia Help Center

Help center dedicated to Octopia sellers

Remember that the faster and shorter the onboarding, the lower the risk of losing a recruited vendor. Your role throughout this entire process is to check that the catalog of products and ranges is successfully uploaded. Monitor that flows are being processed correctly, ensure that data between the vendor and your marketplace is compatible and check that data transfer for sending orders is operational and efficient.

You are now ready to activate your vendors and help them make their first sales.

Vendor account management

Vendor account management on the CRM platform

Once sellers are registered and active on your platform, you then enter the account management phase. You will have to keep them active and coordinate promotional activities and special events throughout the year. Optimize their products and ranges in the aim of developing their sales potential. It is crucial to take particular care when a new vendor store is being created, as they will need to be advised to make their first sales. If they have no one to support them to improve their performance, you will very likely see a drop in motivation, leading to the departure of your vendors (vendor churn).

Don’t hesitate to read our article on retaining third-party sellers to better understand the challenges of account management.

Find sellers!