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Selling on eCommerce Websites or Online Marketplaces? Which one is better for your business?

By: Sahil Mittal | Date : 04 Apr 2020 | Category : Business

Date : 2 years ago

Over these years, technology has totally modified the old and clumsy style of selling. Gone are the days when sellers have to allocate the entire day to sell items in flea markets. With the onset of online marketplaces like Amazon and Etsy, the market has totally adopted the art of selling online. This has created enough ease for sellers to enjoy a great selling experience.

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On the other side, selling online is even possible through personalized Ecommerce Websites which can be easily made using some online tools and sites. To name a few we have Wix, Squarespace, Shopify, WordPress to top the board. Getting a personalized store doesn’t need to share any profit earned with the third-party platforms. But when it comes to the maintenance and investment, it might cost much more than your expectations. So, which one to choose?

Today we are going to talk about the Pros and Cons of selling either through Online Marketplaces or Ecommerce Websites. But before we start, let us understand what is the basic difference between both forms of selling online.

What is an Ecommerce Website?

An E-commerce website is an online store where merchant enjoys the flexibility of selling his own items to the customers. It includes two parties in the process- the merchant who is selling his items and the customers- who is buying his items.

                                                     person-doing-online-shopping           

What is an Online Marketplace?

An Online Marketplace involves a third-party site that aggregates the exchange of products & services between customers and sellers. There are three parties involved in the process- seller, buyer, and the aggregator. A list of examples includes Amazon, Flipkart, Walmart, UEPAKI. Swiggy, Zomato, etc.

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Difference Between an Online Marketplace & Ecommerce Website:

 Talking about the very basic difference between both forms, an online marketplace has n number of sellers, selling items across different categories on the platform. The online marketplace manages the flow of information between sellers and customers.

On the other hand, an Ecommerce Website is a vendor's own property and he is the only one who sells items through his channel to his target audience. It doesn’t involve any third-party intervention.

Now that we have a basic understanding of the two, let's talk about the benefits of selling on online marketplaces.

Pros of Selling on Online Marketplaces

1. Ease to start with:

With the online marketplace, the biggest flexibility is the ease of starting your business. You don’t need to set up a team, invest in a website domain name & servers, bear any maintenance charges, set up any warehouse or inventory system, and customer support channel for your customers. All you need to do with an online marketplace is fill some basic details and you are good to go.

2. Fewer Maintenance Charges

Yes, exactly with online marketplaces all you have to bear is some basic yearly maintenance charges if any, and some listing the fee which is way smaller as compared to your own website servers space cost.

3. Large Audience

Selling with online marketplaces provide you access to sell to potentially large audiences without investing any penny in marketing your business and account. On the other hand, with own websites, you have to invest in marketing your business overall social channels, content creation, customer care management systems to build a large audience for your business. This costs much more than any profit you earn with your account on an online marketplace.

4. 24*7 Customer Care Services

With the online marketplace, the headache of providing 24*7 customer care services also blows up. Every online marketplace has a customer care service that efficiently provides solutions to every customer problem.

5. Less Inventory Cost

Selling couldn’t have been that easy without online marketplaces. The warehouse and inventory management system provided by the online marketplaces make the whole process very smooth and make delivery faster and reliable.

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Cons of Selling on Online Marketplaces:

1. Paid Promotions & Sponsored Ads

Almost every online marketplace today has incorporated the rule of Paid Promotions & Sponsorships. This not only creates partiality but manipulate the visibility of other sellers on its platform. Online marketplaces make hefty money in the name of providing more visibility to the sellers.

2. No Personal Branding

With online marketplaces, it is only them who are adding up to their branding. Customers assume that the product belongs to the marketplace and forgets the seller part. Customers remember the marketplace every time they shop for products.

3. Enough Competition

Since there are thousands of sellers, selling on the marketplace, this creates a vast competition between sellers. It decreases the chance of getting noticed by customers across the platform. This then makes operability very difficult on the marketplace.

4. Large Fee Structure

There are a series of fee which selling on these marketplaces, which then makes it extremely difficult for businesses to scale anyhow.

But all online marketplaces don’t work the same way. For instance, “UEPAKI” is the world’s first no Paid promotion Online Marketplace, which provides personalized branding support too. Also, for sellers operating on the platform, it has the limited competition between sellers with the same proficiency level. This means you don’t have to worry about big players in the market.

Now let’s understand the Pros & Cons of operating thoroughly eCommerce Websites.

Pros of selling on eCommerce Websites

1. Personal Branding

Selling through your personalized websites give you an extraordinary chance to add up to your branding. Your customers will only remember you for your services & products and not ant third-party platform.

2. Retarget Buyers

With your personalized database of your customers saved in your data servers, you get the full flexibility to retarget those customers again. You can add your customers to the mailing list and help them make repeat purchases and better purchase decisions.

3. Better Customer Insights

With your personalized website, you even get better control over your business insights. You can analyze your customer conversion rates, buying pattern & preferences, purchase history and accordingly can plan your marketing strategies.

4. Futuristic Approach

Setting up a personalized website is a one-time investment and will undoubtedly pay you in the long run. You can save marketplaces fees and commission over the long run.

5. Marketing Flexibility

With your personalized Ecommerce website, you can plan your own marketing funnel and strategies. You can install Google Ads, Facebook Ads, LinkedIn Marketing to get unconditional leads.

With the exciting thoughts, you have already proceeded to buy a catchy domain name, create your own selling platform. Some of us even go one step further and hire SEO professionals to ensure that our websites are the first ones to pop up on Google. And yet, has this led to a jump in your sales? Platforms like Shopify and Go daddy are earning revenues by selling hosting and website building services. However, even after spending so much money buying a domain name, creating a website, you are unable to reach your customers.

Most online sellers who are maintaining selling platforms pay a hefty amount of money to SEO experts in order to appear on the top pages on Google. Even after spending all this money, this is not an easy task to achieve. The reason behind this? All search engines take into account multiple factors like the right selection of keywords, choosing the right audience, running proper campaigns, etc. when they produce results- something that E-Commerce Websites use heavily to their advantage.  E-Commerce Marketplaces & Well Renowned Professionals will be always listed on Google first as they bid and allot major of their earnings to get ranked at the very first, and due to this reason, it will never be easy for you to get listed/suggested on top pages.

As per google's latest stats, 93% of online experiences begin with a search engine and 75% of people never scroll past the first page of search engines.

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Cons of selling on eCommerce Websites

1. Set-up Costs

To start with your personal website, you need to set up a team, invest in a website domain name & servers, bear any maintenance charges, set up any warehouse or inventory system and customer support channel for your customers.

2. Tie-ups & Integrations

While setting website seams easy, but you need to manage all basic integrations for your website like a delivery partner, payment gateways, customer care, IVR, etc. This makes the entire process a burdensome.

3. Maintenance Costs

With your personal websites, you have to bear monthly maintenance charges and employees’ salary which is way larger as compared to online marketplaces fee.

4. Customer Care Services

You have to manage customer care services on your own. This then builds a need to either tie-up with customer call centers or investing on your own.

Then, What’s best for your business?

So, let us divide the solution as per seller proficiency in the industry. For beginners, we will suggest operating either on the online marketplace of e-commerce websites as operating on both will be way costly. However, if you have born with a silver spoon then you can surely go for both. For professionals who are in the industry for long and are well known, they can surely go for both. By operating on both, online marketplaces and eCommerce sites, you can enhance your branding and earnings together.

Also, if you have your product or service identifiably unique, then you can surely go-ahead for your personalized website. However, if you are looking to sell general category products, then operating on a marketplace can be the best decision ever.

When consumers search for a product, they search by the description of the particular product, not the name of particular brands. By registering on an aggregator platform, you can ensure that you are visible to your consumers. Being able to compare the products of multiple sellers on one single platform is something that appeals to customers as well.

If you enjoy reading this article, feel free to reach us out in the comment section below. I will be happy to hear from you.

 

Tags

  • Ecommerce Websites
  • Online Marketplaces
  • Social Media Marketplaces
  • Sell Online
  • Sell Design Online
  • Sell Art Online
  • Design Portfolio

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