Marketplaces vs Own Ecommerce Website, which one is better?
In the world of overcapacity, you have a laundry list of suppliers and as well as your warehouses are intelligently stacked with inventories. But the moot question is what medium you have to choose to sell products and services. In other words, where to sell is the point where you struggle.
In the maze where there are numerous permutation & combinations, to find one is always not an easy choice. The decision to choose between a marketplace and a website has been debated since the time these options were invented. The budget is not the only factor, there are a host of others that needs to be analysed before deciding to choose.
Relax! Let’s try and find out a solution to it. Here is a comprehensive guide that will enable you to decide where to maximize the returns- selling on a marketplace or selling on your own website.
Marketplace is a third-party e-commerce site where different sellers list numerous categories of products and services for consumers to buy from. The commercial transaction is processed by the marketplace and so is the fulfillment done by it. While doing so, marketplaces charge a certain amount of fees.
So, when buyers visit any marketplaces like Amazon, Flipkart they find a product and purchase irrespective of the name of the seller. But, they analyze various factors like price, reviews and reputation. But largely, buyers depend on the image of the marketplace
Pros of selling on a marketplace
Low investment Selling on a marketplace is a low cost affair in comparison to the individual website. Making and maintaining a website needs a certain amount of cost. Even when you use an e-commerce platform that allows making and managing online stores, there is a cost albeit a slight one. However, this is not required while using a marketplace. The entire Infrastructure and IT support are taken care of by the marketplace.
Play on the reliability of your marketplace Any prominent marketplace has a huge customer base that’s precisely why people shop here. A reputed site has traffic on it. Even if nobody knows you, that’s ok. Customers will still buy your products as they are concerned with Marketplace’s reputation.
Marketplace takes care of SEO Since marketplaces are into the business, they have a well established SEO & SERP reputation for their product category pages. They certainly score over individual websites when it comes to gathering more eyeballs for your products. In a way, you can say that you, as a seller don’t need to burn resources in generating traffic or eyeballs.
Policy pages aren’t your headache Established marketplaces already have a clearly defined policy for everything, right from shipping to order fulfillment or cancellation.
Marketplaces simplify the shopping transaction as well as the experience, thus, making it much easier for you to start doing business there.
Cons of selling on a marketplace
Marketplace charge selling fee Well, there aren’t any free lunches on a marketplace. After all, they don’t do any charity by selling your product. Let’s be honest, you are on a marketplace because of certain reasons and marketplaces are aware of it.
Hence they charge. Now what you pay is totally their call. They may take fortune. You have to part away. Charges also depend on the type of product and category.
Face the intense Competition You aren’t alone shark there. There are many like you & mind it some may be bigger than you in various aspects. The street is full, and there is fierce competition.
Standing out from the crowd is difficult and takes time before it is achieved. Marketplace also plays the marketing game. Though they have well defined SEO, but to get your site on top ranking, sometimes it becomes a money game.
These days, Marketplaces have ‘Sponsored Category’, ie pay to be on the top. If your products aren’t there, getting business becomes challenging. Even if you pay, there is no guarantee that the consumer will not move on to your competitor.
No branding and customer acquisition Marketplace doesn’t help in enhancing customer loyalty and better recall. You may never be able to create a branding for your website on a marketplace. You just remain one of the companies and your products are just one of the products.
Many brand conscious companies don't prefer selling on Marketplace as there it’s a bit difficult to explain the strengths of their products. You don’t get space to speak about you and this is quite a big issue.
Simply put, E-Commerce Websites are involved in online selling of goods and services, and receiving payments in similar fashion.
E-Commerce websites are made through various sources- Open Source, Customized, and e-commerce platforms. Certain companies are offering E- Commerce Platform as a SaaS product. For our further knowledge, we will discuss here about the E Commerce Websites that are built using E-Commerce Platform.
Pros of selling on an online store
Better control, better authority Your E-Commerce websites are fully controlled by you. Be it the look and feel, design, layout, content or navigation, everything is in your control.
Though your website is made on an E-commerce platform, you run it. The customer is aware of your existence. Your reputation and your products bring the customer on your website. You manage it end to end.
Therefore, the success or failure rests on your shoulder. Hence, make it as good as it can be so that the customer experiences a 'wow' factor when she or he visits.
Accessibility to customer insights The customer’s behaviour on your site is better monitored. You can record the transactions, browsing history, average value of the order, time spent on each page of your website, conversion patterns history and other aspects. In other words, right from the go, you are aware of how customers behave on your website.
Further, you can capture the data of customers that help you in improving the purchase decisions and buying patterns. Overall, you can improve the conversions.
It is the next big thing SaaS based websites are as good as your own. Rather, they are a step ahead as they offer you many services that would cost you fortune were you to make your own customized.
Investing in a website is a one-time investment that is spread over the number of years. You are free from sharing the margins with the marketplace. Hence you pocket more revenue and get multiple features that are laden with safety and security of your website.
Design marketing campaigns It helps in enhanced customer loyalty and better recall, & you can catch the customer interactions. Hence, you can design the campaigns. You can reach out to the customers, you can run referral schemes, you have initiate loyalty programs, cross tie ups and so many other things can be planned
It helps you in targeting your audience in various ways. Google Ads, Facebook ads and even instagram targeting assist you with leads. All these aren’t possible in the marketplace.
Cons of selling on an online store
Making and Managing Cost Needless to say, it’s your website, you have to pay for setting up and keeping it alive and kicking. Moreover, there are some running costs. However, there is a cost in SaaS managed ecommerce portal; but it is less than customized site.
Marketing strategies sucks time Since you are the driver of your website, one can say that it is your responsibility. Finding keywords, devising marketing campaigns, promotions and other things you have to manage the entire show. Also, you require a set of dedicated manpower for it. You are free of this burden on a marketplace.
But, since you have the relevant data, you can share the same with some marketing experts and remain focused on promoting your website. Though it’s a con but it can be turned into strength
So, what’s best for your business?
When you have to pick any one of the two, look what fits best to your priorities and budget. Analyze whether your product is niche or general.
If you’re keen to get as many eyeballs as possible on your product and don’t currently have any budget available for SEO or paid advertising, then consider selling your products on marketplaces.
But if you are brand conscious, want to call the shots, looking to play a long innings, & want to maximize the returns then owning a website on SaaS platform is surely the best solution for you.
But hold on, there is another way too. It’s having both the options work hand in hand. You can host your product on the marketplace and also you can get your website working for you. You have to decide the resource utilization on both the options.
However, in the long run, as discussed above, having a SaaS managed e-commerce website scores over options and it’s always better to be in control.