Providing an online marketplace to consumers—both B2B and B2C—means bringing the best sellers into your platform that meet the needs of your client demographics, whether that means product, location, or specificity. But the very best online marketplaces don’t just offer current AI innovations to provide top of the line UX, they also maintain strong, long-term engagements with their retailers.
What is a marketplace company?
E-commerce has been around for decades; even as far back as the early 1980s, one could argue, when the first transactions were made via a telephone line connecting a TV and a data-processing computer. Today, the Top 10 Online Marketplaces in the US include highly recognizable names and brands like Etsy, Overstock, and eBay. This convenience was made essential to daily life during 2020 where global economies saw surges in online shopping. Indeed, projections show the growth rate of e-commerce will surpass $6 trillion by 2023.
From a consumer facing perspective: Online marketplaces offer the experience of being at a local creator expo, while enjoying the support of a personal shopper whose sole responsibility is securing items of your personal interest, with the assurance that once it is time to purchase, the process is fast, efficient, and informative—all from the comfort of bubble bath, glass of rosé in hand.
On the backend of the consumer’s shopping experience, however, is a carefully curated catalog of retailers, vendors and artists who want to be seen by consumers, paid in a timely manner, and feel supported by the marketplace customer service teams when needed.
In other words, an online marketplace company is an opportunity for independent producers to access large and diverse demographics that would otherwise not be available to them. Marketplaces bring together suppliers, in a digital landscape, much like a physical shopping center. However, on a digital landscape, the marketplace company functions as a payment gateway, as well as a purchasing platform, providing the security of processing electronic payments and taking on complex compliance responsibilities.
Three unique challenges for marketplace companies
1. Manual payments
Manually navigating payments includes tedious data entry for numerous purchases made with various payment types. Unfortunately, the introduction of errors and duplications into an ERP or financial data system is inevitable with manual data entry. Further, manual processes are susceptible to inefficiencies and fraud throughout AP cycles as well as vulnerabilities to missed or lost documentation.
2. Keeping vendors happy
Vendors, retailers, artists—they desire assurance that the platforms they are using are consistent, a fine balance between being compensated for their work and feeling heard should issues arise. Strong vendor relationships start with successful onboarding. Gaps in vendor information can have a domino effect on communication the longer the relationship persists. Add to that ineffective communication channels and both the marketplace company and the vendor can be left in the dark on task management and follow-through.
3. Volume of payments
For each vendor that a marketplace company supports, there are multiple payments that need to be processed; a volume that compounds with every new seller that joins the marketplace. Processing those payments requires collecting taxes, staying in compliance with data security regulations, as well as tracking and follow-up communications with both consumers and retailers. Overwhelmed AP teams are more susceptible to data entry errors and missed documentation resulting in unsatisfied consumers and ultimately seller attrition.
Address challenges early and scale faster
Marketplace companies benefit from expanding their catalog but find themselves in a singular bottleneck if a payment system does not scale. Foreseeing these issues and establishing best practices provides a strategic advantage that both encourages catalog growth as well as sets your teams up for success.
Vendor payouts become increasingly difficult as you add more vendors
You should never have to delay or stall onboarding additional retailers, vendors, or artists as a result of ineffective payment systems. Yet, the complexity of being able to successfully pay myriad vendors—each on time, each with their unique needs—can feel like an insurmountable barrier, especially once a marketplace reaches 1000 vendors.
With the right payment automation, AP teams are able to onboard, track, and update vendors—and their payments—within the confines of a secure, reliable, and consistent platform. In this way, new vendors are met with the same enthusiasm as the very first sellers rather than being a frustration to a distracted accounting department. The system itself is designed to accommodate larger volumes of data processing, leaving AP teams to more vital tasks that require a personal touch.
Prioritize your payout experience sooner rather than later
Vendors and people care deeply about being paid quickly, without issues. Having the right system in place before vendor payment processing reaches an unmanageable volume makes a difference in seller retention and consumer satisfaction.
Consumers want access to products, vendors want their products seen and acquired. Marketplace companies that offer multiple payment options to consumers, and are then able to turn those purchases into vendor payments in a timely manner, have a market advantage over slow, restrictive systems. Payment automation bridges the gap between high conversion rates and keeping the vendors on your platform confident and satisfied.
Why Routable is the best solution for marketplace payouts
Routable understands the challenges that marketplace companies face. With AP automation, marketplace companies gain critical leverage in vendor support and payout, providing a consistent and reliable experience to all vendors while keeping consumers returning to their platform again and again.
Easy ACH payments
Simplify ACH payments with one-time, encrypted financial data sharing through Routable. Vendors personally input sensitive banking information while onboarding—without having to send documents through email—and enjoy the benefit of payments directly into their account, including same-day and next-day.
Mass payouts to save time
Paying multiple vendors, retailers, and artists is time consuming. But with CSV upload, Routable processes hundreds of payments at once while identifying duplicates or potential errors. And with up-to-date API, Routable users enjoy worry-free scaling, meeting your needs right where you are.
Routable is the right solution for your AP teams to successfully take care of all of your vendors in a timely manner. Live the benefit of increased team productivity with 70% reduction in tedious, manual labor through automation.
Vendor turnover leads to gaps in your customer satisfaction. Anticipate and prevent interruptions in marketplace transactions by implementing a sustainable vendor management process. Routable makes it easy to invite your retailers into the payment system. Vendors enjoy the privacy of entering their own contact and tax information and selecting their preferred payment methods. Routable supports as many contacts as are needed for each vendor or customer. Routable also gives users the ability to identify who needs to be involved with approvals so that the right person is included on each invoice or payment, allowing for quick payment processing.
A tale of two marketplaces
“I love Routable’s modern intuitive UI and responsive support team. The API was very straightforward and barely took a day. If you’re thinking about using Routable for your payables and receivables, just do it!” - Sunil, Co-founder and CEO of Garmentory
Garmentory is committed to sustainable, quality purchases provided by independent fashion creators and curators, showcasing clothing (including vintage), shoes, bags, home goods, accessories, and more. Truly a unique platform for the fashion curious and global conscious.
Sunil with Garmentory understands the glaring pain point of mass payouts. A payment system that does not scale—one that is manual and tedious— with his international indie-boutique is not a viable solution to the marketplace with nearly a decade of consumer satisfaction and eco-friendly footprint.
With Routable's API, Sunil was able to revolutionize his payment system in less than a day. Garmentory is now able to send out mass payments to their vendors, as well as contractor payments and one-off receivables. Vendors can manage their own onboarding process and easily select their preferred payment method.
"Routable's API has saved our team countless hours by automating thousands of outgoing payments every year. Our partners couldn't be happier with the quality of service we're now able to provide - and it's only possible because of Routable." - David McKay, CEO and Co-Founder of Seated
Recognizing that when it comes to entertainment, artists are an essential investment, Seated has made it their priority to put control of ticketing back into the hands of creators and artists. Even during one of the most unexpected years in live entertainment, Seated helped support artists with over 150K ticket buyers.
David McKay, CEO and co-founder of Seated, knew that additional tasks for his AP team meant delayed payments to artists who live on ticket sales. Before finding Routable, Seated’s payment processing company required the arduous creation of documents and pdfs, forcing Seated into a rhythm that didn’t jive with their otherwise frictionless consumer experience.
With Routable, Seated’s AP team vibe on their own percussion: A developer-friendly API, vendor self-onboarding process, and control over email communications. David says of his switch to Routable in 2018 that he’s “never looked back.”
Online Marketplace companies are the leaders of improvised shopping and sourcing solutions for both business and consumers alike. And while increased vendor catalogs can leave AP teams feeling overwhelmed, there are automation solutions that meet your needs and eliminate these pain points. Establish an exceptional experience for both consumers and vendors alike today by optimizing your payment methods, giving both your vendors of today the experience they deserve while creating a scalable system for catalog growth.
Request a demo
Don’t leave your vendors, retailers, creators, and artists in bottlenecked payment processes. Schedule a demo with Routable today to make simple, fast payments and enjoy the loyalty of long-term vendor commitment.