Maintaining a unique, profitable product line is really hard. Pricing those products, managing an eCommerce store, and dealing with administrative tasks like shipping or website hosting can add to the burden of many entrepreneurs, which is why eCommerce marketplaces have become so popular.

Merchants can sell via Amazon, Etsy, Shapeways, and other marketplaces to avoid the hassle of creating their own store. For example, if you’re an EU merchant, the new VAT regulations that were imposed on January 1st may have made it difficult for you to sell digital products, as the administrative burden of doing so significantly increased. You may have been looking for such a marketplace to sell in 😉 .

Managing a marketplace can be a great way to start an eCommerce business without the need to create your own product line — instead, you can manage the site and sales community. Merchants benefit from a reduced administrative burden and the traffic or audience that comes with a marketplace, and in return the marketplace takes a commission for each product sold to cover the costs of that administration (such as time, shipping costs if you’ll ship products, etc). While managing a marketplace requires the level of dedication of running your own store (and can very well take more!), it can provide a source of revenue that doesn’t require the up-front investment in products.

If you already manage your own store and have a thriving community, it can also be a way to diversify your revenue, as you can invite other merchants to sell via your site. This provides a commission for you in exchange for administration, which you’re probably already doing anyway if you’re running your own store.

You’ll need to decide how much administration you’ll take on: will you just manage incoming orders? Will you handle customer pre-sales questions or issues? Will you ship products or simply forward orders to the vendor? Adjust the commission accordingly to account for the administration you’ll take on.

WooCommerce Marketplace: Overview

If you’re only planning to allow digital goods in your marketplace, then you should also check out our article on creating a marketplace with Easy Digital Downloads, as it provides another great option for creating vendors and tracking commissions.

If you’re creating a marketplace to sell shippable goods, then WooCommerce in conjunction with the WooCommerce Product Vendors extension could be the solution you’re looking for. We’ll walk through how to create a marketplace with WooCommerce using this extension, and what marketplace owners and vendors can do in this setup.

WooCommerce Marketplace: Setup

Creating your marketplace with WooCommerce will require the $79 Product Vendors extension, but any other setup costs will be optional. Product Vendors will cover adding vendor information and tracking commissions.

If you sell your own products, you can allow vendor products to be displayed alongside of them within your catalog, or you can hide vendor products and manually display them elsewhere. You’ll also determine the base commission rate for your marketplace — how much do vendors make from each sale? This can be overridden for a particular vendor or for a product as well.

WooCommerce Product Vendors Settings

Product Vendors Settings

WooCommerce Marketplace: Creating a Vendor

Once you’ve determined your basic configuration, you can add vendors. Vendor products can be managed exclusively by shop administrators and managers, or vendors can be given the ability to manage their own products. If the vendor admin is set, then that user will be able to log into the site and manage his/her products (but not others). If not, only the shop employees can manage products.

WooCommerce Product Vendor

Add Vendors

Making a user a vendor admin will give them some additional capabilities that will let them manage their own products and submit them to you for approval (or publish them if you’ve allowed this).

WooCommerce Product Vendor capabilities

Vendor Capabilities

WooCommerce Marketplace: Assign Vendors

When vendors have been created, they’ll be able to add their own products, or you can manually assign vendors to a particular product. This can be done while editing a product by checking one or more vendors for a product.

WooCommerce Assign vendors

Assign Vendor

If more than one vendor is selected, then the commission will be split evenly, though you may want to adjust the per-product commission rate. For example, if vendors typically get 40% commission, but there are two vendors for a product, you may want to change the rate to 20% each.

WooCommerce Marketplace: Vendor Capabilities

If you’ve set a user as a vendor admin, they’ll be able to manage any products associated with them, or any product they add. They’ll see a pared-down version of your shop’s admin dashboard to edit and add their own products.

WooCommerce Marketplace: product management

Vendors: Product Management

If you require approval, vendors won’t be able to publish products. Instead, they can submit them for approval:

WooCommerce Marketplace: add product

Vendors: Add Products

Vendors also can’t assign other vendors to the product, nor can they adjust commission rates for a product. They’ll have access to the information needed to manage the product and that’s it.

Once a vendor submits a product, you’ll be able to see it in “pending” status, and can then choose to edit or publish it as needed.

WooCommerce Marketplace: pending products

Products awaiting approval

If you don’t want to allow vendors to edit their own products, you could require them to submit products via a form. We have a tutorial on doing so with Formidable Pro and WooCommerce.

WooCommerce Marketplace: Customer Experience

You can display vendor products alongside with the rest of your catalog if desired. For any product that has a vendor associated with it, the vendor information will be displayed in a product tab (and could optionally be show with a widget instead or in addition to this).

WooCommerce Marketplace:  vendor product

Vendor Product

Customers can also view all products by a vendor by visiting the vendor page:

WooCommerce Marketplace: vendor page

Vendor page

If a product has multiple vendors, then each vendor’s information will be displayed to the customer on the product page.

WooCommerce Marketplace: multiple vendors

Product with Multiple Vendors

Other than the vendor information, customers won’t see any other inner-workings of your marketplace, as the rest of the commissions process takes place behind the scenes.

WooCommerce Marketplace: Managing Vendors and Commissions

When vendors sell a product, they won’t be assigned a commission until the order is completed. Once the order reaches this status, commissions will be assigned using the vendor’s rate (or your default if not set). If a product rate was set, it will override this.

WooCommerce Marketplace: Vendor Product Sold

Vendor Products Sold

All commissions that have been generated will be visible in the new “Commissions” menu. You can view commissions, edit them, or manually add new ones. The commission will also link to the appropriate order so you can view full purchasing information for that commission.

WooCommerce Marketplace: vendor commissions

Vendor Commissions

Product Vendors includes reports as well so you can get an overall view of vendor sales and commissions. These reports will show a graph of vendor sales and commissions, as well as earnings per month by vendor.

Vendors won’t have access to any of their commission information, including these reports, unless you choose to share it. You can do so using a couple of shortcodes to optionally display commissions to vendors. These shortcodes will display nothing unless the logged in user is a vendor. If so, the user can see month-to-date sales totals or a complete earnings table:

WooCommerce Marketplace: vendor earnings

Vendor Earnings display

WooCommerce Marketplace: Paying Vendors

Paying vendors will be up to you. The easiest way to do so is via PayPal, as you can export all commissions to a CSV then upload them to PayPal Mass Payments.

Commissions will typically have an “Unpaid” status. Once you’ve exported commissions to a CSV and paid them out, you can then mark all commissions as “paid” with a bulk action.

Depending on the products in your marketplace, you may want to delay commission payments in case of returns. Many marketplaces hold commissions for a month and then pay them out monthly to account for refunds or returns.

WooCommerce Marketplace: Pros and Cons

That covers most of marketplace creation and management. While Product Vendors provides a simple, all-in-one solution for setting up your marketplace and commissions, there are upsides and downsides to using it.

Pros Cons
Vendors can manage own products No automatic vendor payment
Commissions can be exported / status bulk-changed No default page to display all vendors
Adds a “Vendor” tab and info to products No vendor application
Can assign multiple vendors Vendor earnings not automatically displayed (needs shortcode)
all-in-one solution

Extra: Creating a Vendor Application

You could have vendors register for an account using your WooCommerce customer registration form (typically on the Checkout and My Account pages). Vendors could then get in touch with you to ‘upgrade’ to a vendor account via another form on your site. However, I wasn’t a fan of this and would prefer a “Vendor” application form instead.

You can use any form generator to gather more information about your vendors in your application, and you’d then manually create users. However, I created users automatically with my form builder instead to cut out a step — the way I did this in my test shop was to use Gravity Forms (developer license needed) + the User Registration Add-on (hence the developer license).

I created a customized “Vendor Application” form that created a new user account (with a role of “customer”) when the application was submitted. This let me review the information I wanted, such as why the vendor is a good fit for the marketplace, and creates a user so the vendor doesn’t need a customer account. You can delete the user if you reject the application, or you can edit the user and set him/her as a vendor admin when you approve the vendor.

This certainly isn’t a necessary step, but if you want an “Application” process that can help to automate things a bit, this is one option. Without it, you’ll simply have to manually add user accounts for vendors and assign them as admins, or require a customer account to be created, then upgrade it.

Here’s a sample form you can download from Dropbox (and import to Gravity Forms) and the setup I had in the User Registration Add-on to get you started if you choose to go this route:

Gravity Forms User Registration

User Registration Plugin

WooCommerce Marketplace: Summary

You can create you own eCommerce marketplace using WooCommerce and the Product Vendors extension. While it may not have all of the features on my wishlist, it does provide a complete solution for adding and managing vendors, allowing vendors to manage their own products, and tracking commissions for vendors. My favorite feature is that vendor admins can manage and add their own products, which reduces the amount of management you need to do, and lets vendors take control of their products.

Regardless of whether you’re simply managing a marketplace or allowing vendors to sell products alongside of your own, Product Vendors will support your setup to help you create your marketplace with WooCommerce.

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Posted by Beka Rice

Beka Rice manages the direction of Sell with WP content and writes or edits most of our articles to share her interests in eCommerce. Or she just writes as an excuse to spend more time jamming out to anything from The Clash to Lady Gaga. Who knows.

43 Comments

  1. Can the Product Vendors plugin be used to create downloadable products or variable products, or only simple products?

    1. Yep, Product Vendors can create any type of product that’s available in your store.

      1. Does that include subscriptions? In otherwords, do I need to use the WooCommerce Subscriptions extension first and does WooCommerce Product Vendors “play well” with the Subscriptions extension?

  2. Can you create a service market place with woocommerce product vendors plugin and the booking plugin where users can post their services online and get paid from the website?

    1. Hey Enrico, you can indeed use it with WooCommerce Bookings. Bookings can have vendors and commissions attached, and vendors can create their own bookable products. You’d have to pay out commissions to vendors, or use something like PayPal Adaptive Payments to split payments automatically.

  3. Marketplace_builder July 4, 2015 at 12:59 pm

    What most authors / users forget are the seller review / rating functions. Many of the marketplace plugins either don’t have this function or is not fully functional. There really isn’t any rating / review plugins that works with marketplace plugins, at least not that I know of.

  4. Can I limit the number of products a vendor can create? Is there a way to do that?

    1. Never tried this myself, but this plugin might work for it, or you could do so with custom code.

  5. I agree with you the cons for this Product Vendor. I want to make separate checkouts for each vendor. What’s the custom coding I can use?

  6. Do you have to run all payment through PayPal for marketplace to work? I want to accept card payments through my Barclays merchant services account aswell as PayPal

  7. Will let WooCommerce product suppliers to manage their orders, how can do

  8. Is product vendor compatible with woocommerce booking?

    1. Hey Carine, I think it’s got limited compatibility right now, I know version 2.0 of Product Vendors is being beta tested right now, which should have full compatibility.

  9. Thanks for your reply Beka. When you say limited compatibility what do you mean?

    There is a case study in woocommerce of a marketplace build with product vendor and bookings – it seems to work . However as the booking plugins is expensive i prefer to be sure of the compatibility before buying it.

    1. I think right now it includes the base booking price in vendor commissions, but I haven’t really tried these together myself in some time. I’d recommend pinging the Woo team with this question to be sure 🙂

  10. will the plugin work in a way that only list all one vendor product in a time and send the vendor email or other notice when the order is done. But only one vendor check out at a time? it will become a separate order if the customer ship a product with different order?
    Thanks.

    1. Hey Tony, I don’t believe orders will be broken up by vendor since all items are sold through your site as the marketplace, but this is something I would check with the WooThemes team.

  11. I’m having a hard time understanding the difference between the WC Marketplace plugin and the Product Vendors plugin. Is one a subset of the other? Do I need both to have a multi-vendor marketplace?

    1. Hey Ryan, it’s more one or the other, they’re two ways of solving the same problem: how to create a multi-seller marketplace. I’m not very familiar with WC Marketplace myself, so afraid I don’t really have insights for that, sorry!

  12. Can this work with the Woocommerce Bookings plugin, specifically with its booking confirmation option. In other words, can a vendor receive a booking request, confirms it, before the customer gets an email/invoice for payment?

    The scenario is that vendors set up products, admin set up a commission for site owner, customer request availability, vendor confirms availability, customer gets notified for payment.

    Is this possible?

    Thanks

    1. Hello, is this possible? Thanks.

    2. Hi, looks like Bookings integration was just added. I’m not sure about the finer points, I’d get in touch with the WooThemes sales team.

  13. Our products have multiple vendors for a single product. We would like the users to be able to choose the vendor from a drop down menu while buying the product. In the backend the vendor get notified automatically of the order recieved

    1. Hey Divya, I’m afraid that products can’t be associated with multiple vendors. My recommended way of approaching this would be: (1) set up all vendor products, and make them hidden from the catalog. (2) make a “master” product, and use something like Product Retailers for it to sell via retailers and not your site. (3) For each vendor, list them as a “retailer” on your master product. For the retailer link, use the “add to cart” link for the vendor’s hidden product.

      This would let you hide each vendor’s version of the product, but then sell it via the “master” product, giving the customer the choice in vendor, while keeping the purchase within your site. Definitely an abstracted process, but the only other choice is a fair bit of custom code to set your system up.

  14. how can we make woocommerce marketplace for virtual only like sell services only, no shipping, no products and buyer can also message to seller

  15. Shikari Haseena June 2, 2016 at 9:59 am

    How to display list of all vendors? Please help me

  16. Kristian Fennessy June 4, 2016 at 2:49 pm

    Hi Beka,

    I am currently looking to create a bookable professional services marketplace using WordPress. Would you recommend this method in combination with WC Bookings? Please let me know.

    Thanks,
    Kristian

    1. Yep, Product Vendors 2.0+ added much better support for WC Bookings to let vendors manage their own bookings.

      1. Kristian Fennessy June 5, 2016 at 11:57 pm

        I appreciate your reply! Thank you for all of your very helpful content and expertise!

  17. Hey, I need a multi-vendor setup allows files to be uploaded and then sent to end user. Is this an appropriate plugin to do that? I notice you have to use product enquiry to communicate with customers, or order notes, but do either of these support image attachments.

    1. This plugin would let you set up and manage vendors, but sharing files with customers isn’t an easy thing to do via WooCommerce. I’d check this tutorial out and use it in conjunction with Product Vendors.

  18. Nikesh Shrestha October 7, 2016 at 1:44 am

    Hello Beka,
    I have one question
    As a Site Owner can i earn commission when vendor in my site sells their product.

    1. Sure thing! The commission that Product Vendors sets up is the amount that goes to the vendor, so if you wanted to keep a commission for managing the marketplace, you could set that to something other than 100%.

  19. Your article was very usefull to me. About taxonomy, i dont understand, which one is gets the commision, because i understand that the store owner,me, is the one tha gets the commission from the sales, the money of the byers are coming first to me and then its me that im going to pay the vendors, or the opossite, the money goes to their account and then the amount of 5% of the sale to my account? Thank you for your time. Iam going to have very soon an e marketplace in Greece and i need that answer. regards

    1. Hey Tasos, in this kind of set up, you’d be responsible for processing payments and paying out to the vendors. You could also use something like PayPal Adaptive payments to automatically distribute the commissions for you at the time of purchase.

      1. Hello Beka,

        Great article, very interesting.

        I have a question,

        Let’s suppose I have a digital products marketplace, and at the end of the month I send payments for their commissions to the different vendors in this marketplace. The question is: do they have to send me invoices previous I send the money? Or does this plugin make self invoices for each one of the vendors? . In this case how the plugin deals with different tax and laws of invoicing of different vendors countries?

        Thank you

        1. Hey Antonio, if you wanted to pay vendors monthly, you could set up recurring payouts with PayPal, or you can export unpaid commissions manually each month (see details here). If you need invoices from your vendors, they’ll have to generate them and send them to you manually, but invoices are not required to make payouts.

          As for taxes, I believe the tax is always assessed on the marketplace’s location rather than the vendors, but that’s not something I’m too familiar with myself, so I’d recommend consulting with your attorney or accountant on that point.

  20. Thanks. I love your articles.

  21. Hi! I’m using the Vendors plugin but the vendors info is not showing under the product. Is there a way to hide it that I don’t know about? Thanks!

    1. Hey Francisco, afraid this one doesn’t sound familiar to me, I don’t think this is automatically hidden. I’d recommend opening a help thread to get some troubleshooting here.

  22. Hi,

    Bulk product upload feature is available?

    Pradap

    1. Not by default — to upload products you’d need the Product CSV Import Suite to create products via CSV.

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