Table of Contents
Introduction
There was a time when if you wanted to buy something, you’d have to go out to a physical store and get it to where you can still do that today.
But with the internet, we also have E-commerce, which is where companies sell things online.
It makes life so much easier for buyers since they can buy things from their own home. It’s also fantastic for sellers like your small business.
But there’s more than just one way to sell online and today we’re going to look at the difference between an E-commerce platform and a marketplace.
Defining Ecommerce Platform and Online Marketplace
E-commerce platform is an online platform where a business sells its own products directly to consumers. These platforms are usually used for online stores on the company’s website.
So if you go to a retailer like adidas.com and buy an item of clothing there, you basically made a purchase through E-commerce platform.
There is examples of E-commerce platforms include Shopify, Woocommerce, Bigcommerce and Magento. (if you want to check the differnce between Shopify and Wocommerce check our article here.)
Business and E-commerce marketplace works similarly to an E-commerce platform in the sense that users can just visit some type of online store to buy products, but there’s an important difference.
Marketplaces aren’t limited to a single company. They feature products from lots of businesses. Probably the most well known example of this is Amazon but we have also here in Germany Zalando, Douglas, Otto…
Amazon does sell some of its own products, but it also allows other businesses to sell their. For example you want to buy an Adidas sweatshirt on Adidas’s online store, but you could also buy it through Amazon, Zalando or another marketplace.
Now that we’ve established what an E-commerce platform and marketplace are let’s look at the advantages that come with each one.
Benefits of platforms and marketplaces
There are a few major benefits of using an E-commerce platform. The biggest benefit is that it’s entirely controlled by you, not a third party.
That means a few different things:
Firstly, you can set your store up however you want, and allow it to reflect your unique brand.
If you want to use the colors and crazy fonts everywhere you totally can. Although that may not be the best design advice.
Secondly, when you run your online store, you can gather data about the people who visited. This data is 100% owned by your business, not a third party.
You can use that data to recommend other products to users (Upsell Marketing), show targeted ads across the internet or follow up on abandoned carts.
Benefits of E-commerce marketplaces, one of the biggest ones is increased visibility.
When you’re running your own store. It takes time to get your products in front of people.
But if you sell on Amazon, Zalando, Douglas or Otto, for example, you’re instantly in one of the biggest sites in the world. Of course, you still have to take the time to set up your products. In those Marketplaces search results. But still being on those platforms makes you much more visible than if you just sell your products on your own site. And it comes with a lot more traffic.
E-commerce platforms and marketplaces both have benefits, but they also both have drawbacks.
Drawbacks of platforms and marketplaces
Probably the biggest downside of E commerce platform is that it takes more work than a marketplace.
You have to invest a lot more time, effort and resources into building and running the online store. You need to start with setting up the store in the first place.
You have to build your store entirely on your own including coming up with an appealing design, but it’s also more work to run the store after it’s finished.
You have to bring in traffic.
You need to make sure all of your features work at all times, you also need to keep your website from crashing but marketplaces have drawbacks also, the main disadvantage they have is that you are not in control of everything. You can still list your products and some marketplaces might let you customize your storefront a little bit. But overall you have to adhere to whatever format and guidelines the marketplace gives you.
That means if you want the sales process to work a certain way or you want the pages to have a certain look it will not work. They will not restructure their whole site for you. You just have to accept the layout they use.
Our advice for making a decision
So when you’re looking at an e-commerce platform and Marketplace, which one should you go with?
Well, the simplest answer is both. If you can. That means you will reach a wider range of consumers.
So you make more sales and get the benefits of both types of e-commerce but what if you only have the time or resources to manage one? In that case, it’s probably best to prioritize your own website and its e-commerce platform.
That way you retain more control and raise brand awareness as more and more people visit your store, but do what works best for you and your business and your budget.
Well, if you will start of selling online try check those tips from us before you decide.
