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A Marketplace eCommerce Business or an eCommerce Store of Your Own?

Table of Contents
 
  1. Intro
  2. eCommerce Marketplace vs. eCommerce Websites: What’s the difference?
  3. Pros of eCommerce Marketplace for eCommerce Businesses
  4. Cons of eCommerce Marketplace
  5. Pros of eCommerce Websites for eCommerce Businesses
  6. Cons of eCommerce Websites
  7. In Conclusion

 

 

Intro

 

In recent years, there has been a growing debate within eCommerce on whether it's best to sell via online marketplaces or via your own website.

 

Both avenues have benefits, but also costs that result with choosing their given platforms. An online marketplace offers an abundance of opportunities to grow your consumer base and diversify your market. Having your own eCommerce site gives you freedom to sell and market your own way, without needing to adhere to marketplace subscription fees.

 

This blog will discuss the pros and cons of deciding to sell on an online marketplace or via your own eCommerce website.

 

 

eCommerce Marketplace vs. eCommerce Websites: What’s the difference?



Both eCommerce websites and marketplaces serve their usefulness in the realm of eCommerce. An eCommerce website is simply a business’ site from which they market and sell their products. Businesses aim to display the merchandise they offer, and market themselves to encourage consumers to buy. An example of an eCommerce website could be that of Nike, Adidas or Sports Direct. All these sites are owned by their respective businesses, and they sell directly to customers with no middlemen involved.



On the other hand, an eCommerce marketplace is a hub of several platforms that facilitate online commerce from third parties. Platforms that are within the eCommerce marketplace are sites such Amazon and eBay. These platforms allow for several third parties to use their platform for online commerce.



Pros of eCommerce Marketplace for eCommerce Businesses



eCommerce marketplaces have become a lifeline for many businesses in today’s world. Many brands have been able to thrive due to the reach of eCommerce marketplaces. Amazon for instance has over 2 million sellers on it’s platform, showing that most businesses see the platform as a profitable base for commerce.

 

Marketplaces such as Amazon and eBay also offer unlimited potential to increase your profits and sales. Due to the size of these platforms, businesses have the opportunity to reach much wider audiences than they may have using solely their own site.

 

Brands also are able to gain more popularity engagement through eCommerce marketplaces. More often people are likely to buy a product from a seller through Amazon then via the brand’s website.

 

Furthermore, many of these platforms have analytics tools to help measure the traffic your merchandise is getting. Due to the sheer size of platforms such as Amazon, they already have a large and well established consumer base. This allows you easier and quicker access to more customers than would otherwise be reached via solely the brand’s website.

 

What’s also a positive of this is that the customer bases you do develop are more likely to be loyal long term. Businesses selling on these platforms subtly go through a social vetting by customers. If they see that Amazon or eBay allows you to sell on their platform, then that removes concerns about the legitimacy of your business.




Cons of eCommerce Marketplace



Despite the great benefits that selling on an online marketplace can offer, there are some downsides to investing in the platform.

 

Firstly, some marketplaces can have costly subscription fees to sell on their platform. Amazon for example charges commission on your sales, and this doesn’t include fees you may have to pay for advertising on the platform.

 

Moreover, you aren’t able to store the contact details of customers who buy from you or retarget them. This is unfortunate as it means you cannot develop a consistent form of communication with buyers, making it harder to retain customers.

 

It is also the case that for new eCommerce businesses to the marketplace that they will have to start from scratch. Because online marketplaces tend to have different configurations and layout than most stand-alone sites, it can be daunting to start all over again.

 

Pros of eCommerce Websites for eCommerce Businesses



Unlike eCommerce marketplaces, these are solely governed by the business themselves. Having a direct-to-customer eCommerce website allows you to have stronger communication with customers.

 

Since there aren’t any conduct guidelines that you must adhere to, you are able to archive customer info with the prospect of following up with offers and further advertisement. This is a big benefit with choosing to have your own eCommerce website, as it allows you to create quality engagement and retain customers.

 

Additionally, there are no extra fees associated with having your own eCommerce website besides initial costs of setting up. This means you can be assured that there are no hidden costs that may arise down the line when selling on your eCommerce site. As an eCommerce business, it is important that if you choose to go with having your own website that it is well designed. Getshop Today can provide you with a functional eCommerce website at an affordable price.





Cons of eCommerce Websites

 

Regardless of the control that having your own direct-to-customer site and the potential for customer retention brings, it is not without consequences. One of the main disadvantages of solely going with your own website is the limited reach and network you will have. A large network is important for an eCommerce business. As a result, choosing to forgo using an online marketplace will mean you forfeit an instant and large customer pool. There are also many potential opportunities you forfeit by choosing to forgo online marketplaces.

 

This also means you will have to set aside a reasonable budget for marketing purposes as well as learn the basics of eCommerce marketing. Not every business has the capital to effectively market themselves by themselves, which wouldn’t be a concern using an online marketplace.

 

In addition to this, it is very difficult to effectively diversify and expand your market. Because of the limited customer pool you have, you risk losing buyers if you diversify your products. On a platform such as Amazon, you could afford to diversify your goods without much drawback because of the various markets it houses. You don’t have the same liberty by yourself as you risk losing in some cases the limited customers you have. This can result in stagnation and no improvements in sales. In worst cases, this may lead to loss of profit.



 

In Conclusion



Both eCommerce marketplaces and websites can prove beneficial for businesses. The choice of which path to take depends on the goals and priorities of the eCommerce business. If you are keen on expanding your market and reaching more buyers, then selling on an online marketplace may be the choice for you. On the other hand, maybe you want to sell directly to customers without extra processes and costs for using eCommerce platforms.

 

Overall, both can prove successful for eCommerce businesses given the right approaches are used. In many cases, it is through online marketplaces that customers will come to buy directly from your store.  

 

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