Ecommerce offers customers the luxury of purchasing almost everything under the sun at the click of a button. As more users take to online shopping, ecommerce doesn't seem to be slowing down anytime soon. For entrepreneurs, selling online is imperative. If you are already selling on ecommerce marketplaces such as Amazon and eBay, you have a head start.

However, the opportunity does not end there. Although marketplaces have been instrumental in connecting buyers with sellers, the rise of ecommerce websites has opened new frontiers for online shopping. While there are around 9.5 million sellers on Amazon, there are over 26 million ecommerce websites all over the world and this number is increasing.

How is an ecommerce website different from a marketplace?

You maybe well acquainted with online selling, but here's a brief explanation of the differences between selling through ecommerce sites and marketplaces for those of you who might want a little more information:

What is a marketplace? 

A marketplace is a third-party website that lists products provided by multiple vendors or sellers. You do not directly sell to a customer; there will be a marketplace administrator involved in the sales. Amazon, eBay, AliBaba, and Rakuten are popular marketplace websites.

What is an ecommerce website? 

An ecommerce website is a website run by an entrepreneur that lists and sells only their products. The buyer usually purchases the goods directly from the seller through their site. Well-reputed brands have their website with their names prominently a part of their website URL address and on their website pages.

While you're selling your products on marketplaces, it's worth considering starting an ecommerce store of your own, too. Here are some reasons why:


1. Product Authenticity

Of late, marketplaces are flooded with sellers selling cheap Chinese imitations of good products. The sellers peddling fake products hurt the real brands by selling cheap look-alike goods, stealing customers, and affecting the brand's reputation. Brands like Nike and Birkenstock stopped selling on Amazon because of the counterfeit problem on the marketplace.

On your website, you will certainly not list phony products and will ensure your customers get the real deal. Selling your customers genuine products will create a good brand reputation, which will lead to a loyal and satisfied customer base.

2. Better profit margins

Platforms like Amazon charge you exorbitant commission fees that are likely to eat into your profit margins. You will be saddled with multiple fees including seller fees, FBA fees, and CPA fees, among others. The payment cycle is usually long with a marketplace, too. For example, the payment cycle of Amazon/Flipkart is usually 7–14 days. This might pose problems for small businesses who depend on a regular cash flow to manage their operations.

With your ecommerce store, you run the show without paying too many fees or commissions. The transaction fees on ecommerce platforms are typically on the lower side, increasing your profits, and the payment cycles are much shorter - at times you can get your payments instantly. 

3. Safety of revenues

Marketplaces give you the luxury of traffic and thousands of visitors, but it also pits you against thousands of sellers selling the same goods sometimes at a competitive price. Some sellers even complain that marketplaces interfere with their pricing strategy, forcing them to lower their prices often to remain competitive in the marketplace.

On your website, no one is competing against you. No other products are vying for your customer's attention. If you use the right ecommerce platform, you can monitor customer reviews and ensure they're genuine before publishing them to make sure fake reviews are not getting in the way of your revenue. You are free to woo your customers with discounts, coupons, or credits, too. In other words, you choose your pricing strategy.

4. Inventory and delivery management

A lot of marketplaces prioritize customers over sellers. When a customer is not happy with a product, the easiest way they can return it is by either declaring it damaged or saying it did not match the description of the product they saw online. As a result, sellers often bear a small loss for reverse logistics. In addition, you have to constantly ensure you manage your inventory well. If you do not have the inventory of your listed item, you won't have a "buy" button and that will affect your product visibility. A popular ecommerce seller and blogger noted, "Chinese sellers are now using automated software that will keep buying your stock and then cancel in bulk. This software causes you to go out of stock quickly, which destroys your listing." Marketplaces can be minefields for a lot of business people for these reasons.

If your ecommerce solution has inventory management and shipping built into its solution, then inventory as well as delivery becomes a smooth and transparent process. Inventory management helps plug revenue losses by making sure you are not overstocked or under stocked. It also keeps your customers happy by informing them about the availability of a product. You will be in complete control of inventory and stock management, and you decide the return and the refund policy.

5. Customer data

As a seller with a marketplace, you are not allowed access to customers who buy your products on the third-party marketplace website. However, the marketplace can access them. Since the customer data is completely owned by the marketplace, you cannot interact with them in any form. This puts sellers at a disadvantage. Creating a long-lasting impression of the brand and building customer relationships is next to impossible.

The contemporary idea that data is the new oil is not an overstatement. From helping businesses make informed decisions to maximizing the ROI, data plays a vital role in the success of an ecommerce business. With an ecommerce site, you maintain control over your customer data. You can automate your communication based on the buyer's journey and talk only when the buyer is willing to listen. You can choose to interact with your customers, and send them emails to mention offers, promotions, new launches, abandoned carts, and more. You can check what they like and what they don't, and also stock up accordingly. Starting from customers' browsing patterns, time spent on each page of the store, to their buying behavior, everything can be obtained easily on an ecommerce platform. This enables ecommerce merchants to optimize their stores for a great user experience, run targeted campaigns, and boost sales.

6. Building brand credibility

Either cheap ripoffs can steal your customers or there can be fake negative reviews that can malign your brand name when selling through a marketplace. Customers may not register your brand, or worse, they confuse your brand with another one imitating yours. But they will end up leaving a review for you, bringing down your brand credibility. Over time, your existing customers as well as new ones will not trust a poorly reviewed product, and will switch to alternatives. As mentioned earlier, the competition is high and you practically have no space to build a loyal customer base or a memorable brand.

Building a brand matters. We all purchase from brands we like and trust. An ecommerce store adds credibility to your business as opposed to a simple listing on marketplaces. Your storefront acts as a key touchpoint for your customers. It gives them a holistic view of all the products and categories and a sense of engaging with a real business. Your customers will be able to reach out to your support or sales teams for any query, too.

7. Staying online

Marketplaces can shut your business or delist your products anytime; this can happen even if you haven't violated any of their policies. There are various reasons why a marketplace can choose to suspend your account. An accumulation of negative reviews is one reason but the sad reality is there are services which, for a nominal fee, can leave phony bad seller feedback. If brands partner with Amazon to sell a specific product, any seller's product in the same category can be delisted. There are many other reasons this could happen too. In other words, they have complete control of the product listing.

When you sell your products through your ecommerce shop, you are not at the risk of having your account suspended overnight, for reasons known or unknown. If you're an entrepreneur with an ecommerce site, you can be reassured that you will stay online until you choose not to be. Your website and brand discoverability will be based on how well you optimize your website, promote and market your brand and products, and your social interaction. You are entirely in control of your online presence.

The final verdict: Marketplace vs your ecommerce website

Never place all your eggs in one basket. Experiment, explore, and assess what will work best for you. As a seller, you don't have to find yourself at the crossroads between a platform and marketplace while starting your ecommerce journey. Marketplaces and platforms cater to different needs and both can be useful in their own right. In fact, online businesses who are already using marketplaces can further boost their margins with ecommerce platforms. Overall, no matter what, having an ecommerce online store will always be helpful.







 

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