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Choosing Between a Web Store and a Marketplace- Weighing the Factors

March 17, 2021

The share of retail sales of Amazon, Walmart, Etsy, and a lot of other marketplaces keeps increasing each day. This is coupled with the fact that a ton of new sellers emerge annually. 

Compared to physical stores, online websites tend to have fewer limitations and more advantages. These limitations may include lower outreach, geographical limitations, and fewer metrics. They may help in the measurements of Return on Investment (ROI).

Like a web store, marketplaces such as Etsy, Amazon, and eBay, come with upsides and downsides alike. To be sure of which to choose between a web store and a marketplace, hang on to this read. You’d find out!

Web Store and a Marketplace

Web Store and a Marketplace- What’s the Difference?

Here are some notable differences to note about a web store and a marketplace:

Web Store:

This is a store that can be found online. In most cases, the ownership of a web store is known by the prospective and existing customer. As a customer, you can have direct contact with the owner(s) in a bid to exchange their goods/services.

Marketplace:

This is the direct opposite of a web store. Here, third-party services are contracted to help business owners make their products available online to their prospects. eBay, Amazon, Walmart, and Etsy are clear examples of the marketplaces that dominate the online space today.

Since the Covid-19, many people have been able to adjust to the new normal (social distancing). This development caused the physical stores to embrace innovation as a way of keeping their different businesses afloat. To that effect, “online shopping” which became a recent trend profited and will experience more expansion. 

In the middle of the pandemic, Change in Consumer Behavior Trends has been in occurrence. Further, most physical stores had to limit their sales to their locally based clientele. This is more reason why online stores are regarded well as they help with more outreach. 

If you hope to launch an online store, there are two major ways that you can go about it:

  • You can employ the use of web stores with some of the best SaaS companies like Shopify, BigCommerce, Woo-commerce, and a host of others.
  • Sell on online marketplaces like Etsy, Walmart, Amazon, eBay, etc.

Web Store and a Marketplace

Why You Should Sell in a Marketplace

A lot of new sellers when asked to choose between the two online methods of selling usually go for marketplaces. According to an evaluation done by USPS and ComScore respectively, about 97% of prospective buyers go through products on online marketplaces first before making a final purchase.

In all, a marketplace helps a seller to create an online presence.

webstore

Advantages of Selling in a Marketplace

Easy to get Started:

One of the main reasons why a marketplace should be considered by sellers is because of the ease that accompanies it. The innovative mechanisms and features put in place on these platforms help for the easy tracking of a product’s performance. Also, there isn’t a need for investing a huge amount in hosting, domain names. This allows you to focus on the other complexities involved in setting up a standard website.

In-Built Audience:

Hubspot’s State of inbound in 2018 mentioned that up to 61% of marketers confirmed the difficulties involved in attracting the right audience to their products. But in a marketplace, this issue is solved. Loyal customers are ever willing to jump on product purchase(s). Besides, a higher number of people who also revisit frequently repeat purchases.

In other words, as a seller in a marketplace, generating traffic won’t be much of an issue as that is already fixed.

Mobile Apps and Their Effect:

In recent times, mobile phones have taken a larger share of e-commerce product searches as opposed to desktops. Since most marketplaces are buoyant with resources, they came up with mobile phone apps. This helps customers navigate through their preferences. 

These apps also deliver regular messages that help to keep customers updated and informed on any new change regarding the products.

webstore

Therefore, if you’re an online seller registered on any marketplace, your listed products will be shown to your prospects on their mobile apps. This is one of the quick ways to improve your product viewership. This, in turn, results in massive sales and an increase in revenues.

Wider Payments Options:

Marketplaces are known to present customers with a variety of payment options. These payment systems are unified with the marketplace for easier transactions. Doing this helps to prevent cart abandonment.

Faster Shipments:

Aside from Fulfilment by Amazon (FBA), most marketplaces use other shipment services such as ShipBob, eFulfillment Service, ShipMonk, etc. As an online seller, these services help to relieve you of order managing and shipping responsibilities.

Pitfalls of Selling on Marketplaces

As much as it has pros, marketplaces also come with certain cons. While you can get new buyers on marketplaces, it is almost impossible to resell products to them through promotions and offers. Because of this, you may experience loss when it comes to customer retention. Asides from these, there are other disadvantages of using a marketplace as a seller. Let’s see them below:

The Marketplace Fee:

Generally, no marketplace would let you sell your products if they won’t be getting their monetary share off your sales. To them, it’s a business, and everyone who’s in a business expects to gain from it.

All marketplaces on the internet usually have a fee or a levy that sellers are required to pay. These can come in the form of a percentage of a seller’s revenue or a fixed amount. After they are done paying the fees attached to selling on these marketplaces, sellers may have little returns to take home at the end of the day.

The Pressure of Being Affordable:

Many marketplaces make use of the Buy Box system. In this case, if a seller is giving out a deal or service that’s better than yours, it means that you won’t be making as many sales as you should. With the Buy Box feature available on all marketplaces, a seller with an inferior product might make more sales. This is because of better prices. This can be entirely discouraging.

The Competitor, Just by the Neck:

Unlike a web store where you can make brand moves that are aimed at putting you high above your competitors, a marketplace limits you. It lets you sit just beside your competitor. Here, your competitor knows your every move. This further pressurizes into creating a great listing. 

If you’re not able to do that, it may be impossible to prove how great your services are. This, in turn, allows your customers to choose from the various options available.

Not Generating a Loyal Customer Base:

Many customers who buy from these marketplaces may not know the real names of the businesses they buy from. As a result, each time they need to make a purchase, the first thing that comes to their mind is the name of the marketplace. Simply put, marketplaces obstruct your chances of creating brand awareness amongst your customers.

There are also cases of malpractices by competitors. This can cause your business a lot of harm.

Selling on a Web Store

One reason why sellers would choose a web store over a marketplace is the idea of being in total control of your business.

In a web store, you’re expected to set up a website and provide a web address. It acts like a retail store where you can put up any product of your choice and then have customers come and make purchases. The customers who visit a web store are virtual.

Before getting your preferred web store, ensure that your time and resources are put in place.  In all, getting a web store saves you from stress and other issues that can be likened to a marketplace.

Open Source or SaaS-Based Platforms for a Web Store:

webstore

In creating web stores, there are two main platforms that you can use – SaaS and Open Source. While the owner handled Open source, the supplier handled SaaS. If you’re looking to launch your web store, then you must understand how to select the Best eCommerce Platform for your Online Store.

Why Do You Need a Web Store?

You need a web store because the products and services you offer need to be of relevance. Setting up a website will help you to distinguish yourself from your competitors. 

To further make your business stand out, a tagline, logo, and a clear brand voice are required. These will help to project your brand message. This isn’t possible if you’re selling in a marketplace.

Benefits of Opening an Online Store

User Interface:

Whether you’re launching your business on a web store or marketplace, there are things you should know. First, you must know that a lot of features accompany these platforms based on SaaS. 

These features include language selection, customizable themes, shipment, pricing, order management, etc. All are built to help for easy management of your store. There’s more.

People who come to purchase your products also get to have a wonderful experience while shopping. In other words, using the excellent system of a web store is one of the quickest ways to make a great first impression with your new customers.

Create Your Customer Base:

One other reason why web stores are recommended is that you as a seller can easily obtain the data of your website users. With web stores, you can actively engage in email marketing! You can also create a sales funnel that allows you to reach out to customers who are interested in your product. Loyal customer base is increased, and marketing cost decreases when you sell on your webstore.

Take-Home what you earn:

Unlike a marketplace, websites don’t involve you paying for either sales or listing fees. Whatever you earn, you save and take home with you. The only fee that you will most likely worry about is the store maintenance fee. This depends on the SaaS platform it was built with.

24*7 Product Availability:

The desire of every business person is to have enough products to go around for each customer. This feat is achievable with web stores as you’re free to list all products that you have in stock. 

You can manage your inventory and prevent your store from running out of products. The same can’t be said for Marketplaces as they tend to limit your listing to a specific number of products. A web store allows your buyers to shop at any time and any day they want.

Flexibility:

You don’t need to wait for sale days like in marketplaces before you can announce discounts and offers on your products and services. Managing the activities of your stores becomes an easy nut to crack.

You can retarget shoppers to become repeat buyers:

Having customers who visit your store more than once is good for business. It helps you to restock your products. It’s part of the things a web store guarantees you. It allows you to access your customers directly. This increases your chances of selling to the right audience.

How do you turn the right customers into repeat buyers? This can be done by targeting the people who click on your ads. You can also re-advertise to those who have purchased before and maintain contact with them by building an email list.

Personalizing the Shopping Experience:

When you sell through your web store, you can present and market your products in a way that’s specific and unique to your brand. It’s also a means of letting your customers get in touch with the personalized part of shopping. By doing this, trust and loyalty are built. This, in turn, translates to more sales!

Market places, on the other hand, provides you with already existing customers. The only disadvantage of this is that it may take some time to gather customers. It might take time before they trust you. This is especially if you’re new to the platform. But if you’re selling unique products, you will make faster and better sales.

Problems and the Solution While Operating a Web Store

When you’re choosing between a marketplace and a web store, you must understand that they both come with different issues. As a web store owner, you will most likely have less time and resources in your beginning days. The management of products, orders, and some other areas of running a store may take up a chunk of your time. The “time-consuming” aspect of running a web store makes you pay less attention to other important areas that will be beneficial to your business.

To manage these time issues, some SaaS platforms like Shopify built custom-built app pages. You can also get other wonderful applications from CedCommerce which is a partner with Shopify. It allows store owners to join their web stores and bring in products from marketplaces. If you want to make importing from other marketplaces easier, you can get the Multichannel Importer app.

With the Multichannel Importer app, you can import and list products from multiple marketplaces such as eBay, AliExpress, Amazon, etc. Some Shopify custom-built apps are used to integrate these stores. To make sales on multiple selling platforms easier, products are synced.

Setup can be time-consuming and technical:

Setting up your website can either be easy or complicated. This depends on what you want. In most cases, you can get your site running within a short period using innovative do-it-yourself tools. Nevertheless, you may run into some technical drawbacks or time-restricting issues.

The several steps involved in launching a web store includes:

The several steps involved in launching a web store includes:

  • Purchasing a hosting service and a domain name
  • Setting up a cart (for shopping)
  • Setting up software that will be used for processing credit card
  • Creating content for your store

While there are modern ways to handle tasks, you might need help. One way to solve this problem is by a web design agency to get the work done.

You have to work to get shoppers to your site:

As soon as you’re done setting up your website, the next step is to get people who will buy your products. Usually, exposing your website to your target audience is the best way to go about this. To attract customers, you will need to invest in the right marketing campaigns such as PPC or hiring an SEO agency. This helps to improve your brand’s visibility. 

After attracting visitors to your website, it’s time to move a step further. You can plot strategies on how to make them pay for your products or services. Enhancing the mobile user experience is a great way to achieve this.

Conclusion:

Above all, listing and selling off products are quite easier when done on marketplaces. But as a seller who’s thinking long-term, it may be impossible to achieve your visions with a marketplace. This is why web stores are recommended. Web stores help you to operate better, generate leads, and convert visitors into buyers.

Because marketplaces and web stores both have disadvantages, the best thing to do is to make use of their individual advantages to the best of your ability. You can start by increasing the number of your customers. Then, try to get them to visit your web store through discounts and referral codes.