E-commerce Marketplaces Vs. Online Store: Where to Start Selling
E-Commerce Seller Financing • June 10, 2019
nline selling offers plenty of possibilities. Yet, if you are completely new to it, you may be wondering where to start your e-commerce business: on e-commerce marketplaces or your own website. Making the choice that is best for you can determine how fast your business develops and how soon you will start seeing progress.
Let’s take a look at the advantages and disadvantages of both so that you can make an informed decision.
Advantages of E-commerce Marketplaces
E-commerce marketplaces are platforms that allow different vendors to sell on them. Amazon is by far the most popular and profitable one. However, eBay, Etsy, and Wal-mart can be suitable alternatives too.
1. Established Audience
The most popular e-commerce marketplaces have already established themselves internationally. Therefore, a large number of consumers chose them when purchasing online. Therefore, after setting up a seller account, one can theoretically start selling right away.
2. Simplified Process of Selling Online
Setting up an online seller account on e-commerce marketplaces is usually straightforward and relatively easy. You do not require much technical knowledge set up your account, list your products, and start selling.
3. Less Initial Investment Needed
Since the platform is already established, you will require less initial financial investment to get started. Therefore, this can be a great option if you are starting off with a limited budget
Buyers are more likely to purchase from Amazon and other e-commerce marketplaces because they trust these platforms.
Disadvantages of E-commerce Marketplaces
1. Large Competition
Despite it being easy to get started, as a new online vendor, you face large competition. There can be hundreds of other vendors with established profiles selling exactly the same product. Combined with a lack of knowledge and experience in e-commerce, continuously making sales can prove to be a challenging experience.
Most e-commerce marketplaces charge fees for listing your products. Therefore, you may need to pay before you have even made any sales. In addition to that, the marketplace may also charge you a fee for any transaction you perform.
3. No or Limited Personalization Options
Most e-commerce platforms offer little to no option to personalize your listings and establish your brand. Marketplaces like Etsy allow you to list your social media channels and personalize your packaging. Thus, you can make a memorable impression through the way your product is packed. This also allows you to add a personalized note.
With marketplaces like Amazon, this is impossible. Thus, you cannot rely on your buyers to become your loyal customers and you cannot expect them to become return customers.
4. Limited Possibility to Communicate with Customers
While marketplaces allow some communication, it’s usually restricted to answering questions about products and resolving issues. You have no possibility of communicating with your potential buyers directly and notify them about discounts, special offers, new products you may have in stock, and similar.
Advantages of Your Own E-commerce Store
1. Personalized Branding
If you establish your own e-commerce store, you can design and personalize it in any way you wish. You can choose a logo and colors that best suit your brand. You can personalize product images and descriptions to make them more unique and memorable without needing to adhere to any marketplace guidelines. If you’d like your e-commerce store to stand out, then establishing your own would allow you to do just that.
2. Build Personal Relationships with Your Clients
There are numerous ways in which you can connect with your potential and existing buyers. You can develop a blog about your industry, regularly post on and converse with your audience on social media.
3. Work on Retaining Your Customers
Having your own e-commerce platform allows you to work on developing a relationship with them and turning them into return customers. Selling from your own platform allows you to collect e-mails from your buyers and use them to notify about promotions, special offers, and more.
4. Greater Control over Reviews
Reviews can make a massive impact on whether your business succeeds or not. Word of mouth is the most effective form of marketing and a great number of online customers base their shopping decisions on online reviews. You have very little control over that on e-commerce marketplaces.
If your customers have a negative experience with your store on platforms like Amazon, the only way to ensure you don’t get a terrible review is to go above and beyond to satisfy your customers. And even then you may not get a good review. On your own store, however, you can have more control over what goes up and what does not.
You still should focus on delivering the best possible value to your customers, but one negative review can be far more damaging on e-commerce marketplaces than on your own platform.
Disadvantages of Your Own E-commerce Store
1. Larger Initial Investment Needed
Setting up your own e-commerce store will require more resources from you. You will need to pay for a domain name and server. You will also need to purchase a website template or contract a web developer to set up your store for you. Since time is a resource too, you will need to invest more time into setting up your own store too.
2. You Need to Invest in Marketing Your Business
Customers won’t be able to buy from you if they don’t know about your e-commerce store. You will need to reach out to them and let them know that you have a product that they may be interested in. That’s possible through advertising.
However, it can be a challenge and your marketing efforts may not pay off right away. You may need to do some experimenting or hire a professional marketing specialist to help you.
Which Is the Right Way for You?
Well, that depends entirely on you, your needs, and your current situation. However, you may want to look into establishing both. If not right away, then over time. Thus, you will be able to reap the benefits of both and have greater control over your store and your brand.
So, which option are you going to start with and why?
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