Online Store or Marketplace: Your Question, We Answer

//Online Store or Marketplace: Your Question, We Answer
online stores vs marketplaces

A lot of our clients came to us with the same struggle. They have been selling their products through marketplaces directly. Yet, they had no way to get listed at the top of the search results and ended up having very few impression and sales conversion.

They asked us, should they have first developed an online store themselves instead? Let us begin with answer this question, what are the high- and low-lights of setting up your own online store or selling through e-commerce marketplaces?

Starting an online business

With standardized grids and pre-populated fields, it is easy to manoeuvre and list your products on marketplaces. But if you are aiming for brand essence and customization, developing an online store would be what you are looking for.

A general expectation is that you would require more resources to set up an online store, but working with e-commerce applications like Shopify and Magento, you can easily build your site from scratch and manage your products through any filters and categories according to your needs.

 

Building your brand through marketing

To build your brand presence on marketplaces, marketing budget must be spent on premium listing and cross-promotion. This however just drives traffic to the marketplaces instead, which may even end up promoting other brands.

With your own online store, all your marketing budget is spent to build brand awareness and attract buyers to your own website via your choice of channels, ranging from Facebook, Instagram and Google Display Network.

 

Driving traffic

Marketplaces always have a vast number of visitors, however brands gain very few impressions there, because the competition in product listings is very fierce. You would require a lot of resources to pump your product up the search results and attract any customers.

An online store on the other hand is likely to attract more target consumers directly with dedicated digital marketing tools as previously mentioned. This is what you use your marketing budget well and effectively.

 

Generating sales and revenue

You can always expect a lower profit margin on marketplaces, as the platforms always require you to pay additional charges e.g. sales commission, membership fees and lead fees, etc.

With your own online stores, all the revenue you earned from online sales go directly into profit. This in turn results in higher profit margin.

 

So, here is our take on the differences of online stores and marketplaces. Should you want to know how we would tackle your problem on e-commerce set-up? Till next time, or simply get in touch with us today, and find out more!