Digital Marketing, eCommerce

What’s better: Selling on an online marketplace? Or selling from your own ecommerce website?

Established online marketplace such as Ebay and Amazon attract millions of potential customers each year. However, they also attract large numbers of sellers, each competing for a slice of their traffic.

A dedicated ecommerce website allows a seller to set themselves apart from the competition. However, they will also be responsible for driving traffic to that website and converting them into customers.

So which option is better? And is there a third option? Let’s find out.

Key benefits of selling on an online marketplace

  • Easy to get started and maintain

Marketplaces are easy to get to grips with. You can set up a store within minutes and add your products with ease. The existing infrastructure will also handle payments and transactions for you.

  • Access to an existing customer base

Well established marketplaces such as Etsy will already have millions of visitors and thousands of customers. This means you can concentrate on providing unique products and compelling sales copy.

  • Customers trust marketplaces

Many marketplaces are household names, which means people trust them and feel comfortable making purchases. This trust will extend to your store by virtue of being listed on their website.

What are the downsides of selling on a marketplace?

  • Competition between brands is high

Like an offline marketplace, you will be competing with lots of sellers. This makes it harder for your products to stand out. Customers can also be overwhelmed by choice and miss the unique offerings of your products.

  • Lower margins

Marketplaces will usually charge sellers a fee for using their service. This fee is generally charged per sale or monthly.

  • You lose your brand identity

It’s far too easy for buyers to focus on the products rather than the sellers. So even though you may be making great sales, the buyer is more likely to remember the marketplace rather than the store they bought from. This leads to the next point.

  • No remarketing

You can’t communicate with previous customers outside of the marketplace. This means you are forced to focus on gaining new customers rather than the preferable option of retaining and nurturing existing customers.

  • A lack of customisation

Most marketplaces offer little in the way of customisation for your store. This can make it difficult for you to differentiate your business and build brand awareness.

  • Ads from competitors

Competitors can pay to display their advertisements directly on your store. This means that you can never guarantee that your products are getting full exposure.

Why should you use an ecommerce website to sell online?

  • Better margins

Selling products directly from your website means no monthly / per sale fees. Aside from your regular overheads, such as hosting and domain renewal fees, you get to keep the lion’s share of the profits.

  • Control over your brand

You are in full control of the look, feel, messaging and inner workings of your website. This means you can adapt and make changes when necessary. You can also create conversion optimised user journeys and show off the personality of your brand.

  • Retarget shoppers to become repeat buyers

With an ecommerce website, you can remarket to your customers in many different ways. This could include email marketing to upsell or promote new products to previous customers. You also have the option to target customers with personalised advertising based on their browsing history and habits.

  • Zero competition on your website

Your competitors no longer have the option to advertise their products on your store. With your own website, you are in full control over which advertisements get shown to customers.

The downsides of selling on an ecommerce website

  • Setting up a website requires time and money

Depending on your technical knowhow, it can take a significant amount of time to learn how to set up a website. This is because it can be much more complicated than settling on a design. You’ll need to take payment processing into account as well as ensuring your website is secure against cybercriminals. The easier option is to use an off the shelf ecommerce platform, such as Magento or Shopify. Or if you prefer something more bespoke you can hire an ecommerce web development agency.

  • You need to drive traffic to your store

Even with the best website in the world, you will still need to put work into gaining traffic. This includes search engine optimisation (SEO) for organic traffic, or paid traffic sources, such as Google PPC or social media advertising. Depending on your knowledge, you may need to either learn or hire someone to help you with these tasks.

  • You need to know how to convert traffic into customers

Getting visitors to your website is only one half of the equation. You also need to convert those visitors into customers by providing them with a great user experience. This means you will need to work on your site speed, mobile experience, sales copy, button placements and more.

The Hybrid approach – integrate a marketplace into your ecommerce website

If you are having difficulty choosing between a marketplace or ecommerce website then you’ll be pleased to know that you can do both. However, the potential of doubling your returns comes at the cost of doubling your workload!

Hybrid options include:

  1. Using an ecommerce CMS platform such as Magento or Shopify. You can integrate a marketplace into your website using a plugin – such Advanced Magento Marketplace. This will allow you to manage your marketplace products directly from your admin dashboard. 
  2. For a standard ecommerce website (without a CMS) you can achieve similar results using API integrations. However, this can be quite a complicated process and will most likely require the services of a developer. 
  3. The simplest option is to avoid integration altogether and run a marketplace store and ecommerce website store in conjunction with each other. 

The main benefit of the hybrid approach is that you get the best of both worlds – access to an established traffic source via the marketplace and independence with your own website. Additionally, if you have a strong brand on the marketplace, you can funnel traffic directly to your ecommerce website.

The downside of the hybrid approach is that you need to maintain both stores for users and search engines. In the latter case, this means creating two unique descriptions of each product and category to avoid duplicate content issues. This is what we meant when we mentioned doubling your workload!

In summary

Selling on a marketplace is a quick and easy route to selling online. You gain access to a pre-existing customer base and can build up brand awareness and customer loyalty. However, the marketplace will take a cut of your profits.

Creating your own ecommerce store secures your independence and allows you to retain all the profits. However, you will be responsible for driving traffic to your store and converting them into customers.

The route you take depends on what’s important to you right now. If you need to make fast sales then a marketplace is probably your best option. However, if you are in this for the long haul, nothing beats the potential returns of securing long term traffic sources to your website.