Owned E-commerce v Marketplace

You have a product, you know it can sell, you know your audience. Congratulations! The question now is how to go about it.

Will you sell through an online marketplace or create an e-commerce website to promote and sell your wares?

Online Marketplace Benefits and Drawbacks

There are several global marketplaces now operating, from Amazon to eBay to Etsy.

Any one of these will deliver a massive reach for your brand and products. Amazon’s shopping app has over 150 million users[1], while Etsy has almost 82 million active buyers[2]. These are huge numbers. If you can cope with the potential interest, then this is a much quicker way to scale up sales from the start.

Selling on an online marketplace means you also can reach more new customers on an ongoing basis, as the search function is not by brand but by product type. Depending on your product, this could really work in your favour. Etsy is known as the world’s largest flea market for a reason: it has lots of niche categories and communities driving people to your store.

Of course, being on a marketplace does mean you are literally sitting side by side with your competitors - and this could impact on your sales. Etsy has made this a positive feature with Etsy Teams - groups of sellers working in the same industries, assisting and recommending each other.

Selling this way takes away a lot of the hassle: the site owner handles the maintenance, costs and management of the site, keeping product listings live and accessible, ensuring security, managing marketing and providing seller and customer support.

All of this does come with a fee, of course. This depends on the type of contract you set up: you could opt for a professional account or an FBA, for example (Fulfilled by Amazon). Either way, you will need to factor in the fees as part of your outgoings.

Selling on Your Own E-commerce Website

With a range of e-commerce platforms like Shopify and WooCommerce, the creation of an e-commerce site is quite smooth.

The first advantage here is that you have complete control - over your brand, the messaging, everything. Your customers will not be distracted by ads or other sellers. 

This ownership means you can control your social media links, update your own blog posts, manage specific SEO and marketing to target certain customer demographics and, if needed, grow a little more steadily, at your own pace.

It also works well for recommendations from users: selling on a marketplace means the consumer is technically buying from Amazon or eBay. Your brand is diluted and less memorable, therefore less likely to be passed on through word of mouth. Using your site means you can get to know your customers: you have their data, and if they have opted in, you can build a relationship with them for the future.

There are no surprises: while it’s your responsibility to keep up with Google’s algorithm changes and image copyright rules, you are not likely to be hit by a marketplace owner’s changes. However small they might be, they could have a massive impact on a seller, and this is something that is completely out of your control.

This route means you don’t have to pay marketplace fees. However, there are other costs to consider. You will need to factor in the cost of marketing and SEO. You may also need to consider fulfilment software such as Shipbob, which delivers a seamless logistics solution for e-commerce but does come with a cost.

Ultimately, the route you choose will be led by your products, your audience, your budget and your time. There are an estimated 24million e-commerce[3] websites around the world, with more created every day, so it clearly works for a lot of companies. It’s estimated that 95% of all purchases[4] will be made through e-commerce within the next 20 years, so if you are looking at selling a range of products, the internet is definitely your friend.

The key will be to find the right process and platform that works for you in the long term.

^{[1] https://www.statista.com/statistics/579718/most-popular-us-shopping-apps-ranked-by-audience/}

^{[2] https://www.statista.com/topics/2501/etsy/}

^{[3] https://wpforms.com/ecommerce-statistics/}

^{[4] https://www.nasdaq.com/articles/uk-online-shopping-and-e-commerce-statistics-2017-2017-03-14}