Marketplaces like Amazon and eBay can be great sources of revenue for businesses big and small. Many entrepreneurs use marketplaces like those (and others like Etsy or AliExpress) to get their feet wet in e-commerce.The question, especially for newcomers, is if they should focus their energy on their own website or on the marketplaces. Both options come with advantages as well as challenges, so which one should you use? Today, we’ll break things down and help you decide what the best choice is for your business. We'll look at the following topics and pick a "winner" for each:
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When it comes to building your brand, there’s no question that creating your own website gives you more control of your brand image. As anyone who’s visited Amazon or eBay knows, there are very few options for controlling how your product pages look.
Colors, fonts, and layouts are pretty much standardized in these marketplaces. Of course, each one is a bit different. eBay, for example, give you more options than Amazon once the user scrolls down the product pages a bit. However, no one will claim that any of these product pages are very dynamic.
Naturally, there are some things you can do to differentiate yourself as a marketplace shop:
However, with marketplaces, that’s more or less where creativity ends.
Having your own website lets you create the experience you want your customers to have. Your brand should have a personality. It should symbolize your target group’s lifestyle and this should be reflected in the design of your website.
The Crofthouse definitely creates a cozy vibe on their website.
For companies that are looking to create a brand that targets a niche audience with a specific buyer persona in mind, doing business on your own website is the way to go.
Winner: Your own website… by a landslide.
Getting traffic to your website is an important element to your online shop's success. Your online marketing efforts can be vital to driving potential customers to your shop.
Creating a brand for yourself may be a goal of yours, but that is a long game. It takes time (and is definitely worth the effort!), but generating sales in the short-term is also important.
There are many things you can do in terms of marketing, but they usually fall into one of two categories:
If you have your own store, you can do a lot of things to drive traffic to your shop organically. You could optimise your website to rank highly in Google organic search results, create a blog to build trust in your niche, create an engaging social media account and other things.
If you sell on a marketplace, the first thing worth mentioning is huge. In most big markets, product searches begin on marketplaces. In the US, for example, 61% of product searches begin on Amazon. If we look at what is happening globally, (primary and secondary) marketplaces are the biggest part of consumer product searches:
It goes without saying that the traffic available in marketplaces is enormous. However, the competition is also high in many industries. Therefore, getting highly ranked in marketplaces like Amazon is also a strategic game that involves many similar strategies to SEO, like keyword optimisation and detailed product descriptions. In many ways, it is quite similar to trying to rank highly in standard search engines like Google and Bing.
Although, marketplaces might win from a traffic perspective, online shops win from a creativity perspective. You simply have more options to rank higher and drive organic traffic to your website. Overall, you could consider it a draw.
If you run a website, there are many options available to you from a paid marketing perspective.
You could run Google and Facebook ads, or create an Instagram campaign. Then there’s Twitter, Instagram, TikTok, and Pinterest. The list goes on and on.
Depending on your niche, you could target your ideal customers on the platforms where they're found (e.g. younger audiences can be found on TikTok, while larger audiences can be found on Facebook). Your creativity in marketing also has much more freedom in this regard.
Looking at marketplaces, you also have options to advertise on places like Amazon and eBay.
Of course, advertising to get to the top of their search results isn't free. You are essentially paying Amazon to advertise on their platform, where they're already taking a cut of your profits. You may not have a problem with this, if you're volume of sales can make up for it, but for some people, that can be a turn off.
With eBay, for example, you can advertise external shops at the very bottom of search results, but the ads found on product pages aren't always closely related to the products searched.
This one's also close. Marketplaces keep marketing options relatively simple: One platform, one basic way of advertising - get to the top of the results. However, with websites, you have the freedom to go find your audience where they are active and create engaging ads to draw their attention.
Winner: Your own website... with a slight (creative) edge.
We've touched on both of these topics a bit in the previous sections, but they deserve their own analysis and "winner".
Sales can often be closely related to the volume of traffic on your shop, whether it is online or off. Again, this will also depend on your marketing efforts, both organic and paid.
From a conversions perspective, we already know there is little you can do in a marketplace to make your shop stand out.
Although there is a level of trust in marketplaces like Amazon, consumers are still aware that many shops are third-party sellers and things can still go wrong. That's one of the reasons why customer reviews are so important for both marketplaces and websites.
However, when it comes to your own website, there is more you can do than just collecting reviews. You can get certifications that instill trust in your audience. Vegan seals, Fairtrade seals, or the Trusted Shops Trustmark with the 30-day Buyer Protection.
Otherwise, you can also make your design speak to your customer persona. If your brand is cozy, your entire website can channel that message for you.
We'll touch on trust more below.
When we talk about profits, the only argument you can really make in favour of marketplaces is that if your volume of sales is high enough, it will make up for the profits you are giving to the marketplaces. Each marketplace has it's seller services as well as their own policies regarding the cut they take from your sales. You'll have to decide whether or not, it's worth it to your business.
Winner: Tie... performance matters!
When a user visits Amazon, for example, the customer experience is more directly associated with the marketplace than with the seller.
In essence, that means that when a customer has a smooth experience buying your product on Amazon, it’s simply "another great Amazon purchase". Although the product was bought "from you", the experience of buying that product is often credited to the marketplace in the mind of the user.
Similarly to branding, the customer experience is much more in your hands when you run your own website.
When a customer buys from your shop, their customer journey is yours to control and customise from start to finish. From the ad they clicked on, to the homepage visit, to the customer service, to the follow-up email requesting a review, it's all up to you. It may be more work, but it’s yours to own and yours to master!
Winner: Your own shop... the customer experience is truly yours.
Recommended blog: Starting an Online Shop: A Beginner's Guide
The seller experience can be a tricky topic to judge. For absolute beginners, a marketplace might be a great way to get your feet wet.
Amazon, for example, offers many services to their sellers, including Fulfillment by Amazon (FBA), which basically means that Amazon stores, picks, packs, ships, and delivers the products to your customers. Amazon also handles customer service and returns for those orders as well. It can remove a lot of the tasks that you have to deal with on a day-to-day basis. Of course, this service isn't free, but it can definitely be very convenient.
On the other hand, "getting your hands dirty" and having your hand in many of those tasks might be fulfilling on its own. If you're someone who truly wants to learn about SEO, online marketing, logistics and running and growing a business, then websites might be where you want to start.
Winner: Marketplaces... convenience is key.
One of the biggest negatives for marketplaces is that you really need to be careful about how you market yourself in your post-purchase activities. Amazon, for example, is very strict about this topic. They basically forbid you from mentioning your own company in any way.
That means you cannot even include your business card or print your website in the invoices included in the packaging. Why not?
Amazon sees this action as an attempt by retailers to lure customers away from them; a strategy they’re not very fond of to say the least.
Other marketplaces, such as Etsy, have similar policies. However, Etsy at least lets you post links to your social media pages.
If it’s obvious that you’re pulling in a lot of customers through these marketplaces, make sure you have a memorable shop name that can easily be googled. Perhaps this way, customers will end up on your website through the search engines if they want to purchase a second item from you.
Whatever you do, just be sure to read through the terms and conditions of the marketplaces carefully. Your account might get suspended if you violate these conditions.
Winner: Your own shop
As you can see, there are plenty of advantages to selling on marketplaces like Amazon. That also means that there are plenty of lessons to take from these e-commerce giants as well.
This point is particularly true with Amazon. Shoppers can search a seller's reviews to get an idea of their service. Perhaps more importantly, product reviews (and ratings) are available right on the product page as well.
This gives users a greater peace of mind before completing their purchase. This point, in my opinion, may be one of the greatest factors of Amazon's success, as Jeff Bezos made the decision to publish all reviews (even negative reviews) for the benefit of the shoppers.
The bottom line here is that trust is a major factor here and an advantage that Amazon has worked hard to get.
Even if a customer visits your website and likes what they see, they may still choose to shop in a marketplace because of their previous experiences. And that’s why social proof is so important.
Besides reviews, having a trustmark displayed on your page can be a big trust builder for your online store. The Trusted Shops Trustmark, for example, offers consumers a 30-day Buyer Protection. As the most recognised e-commerce trustmark in Europe, it can help eliminate any doubts your potential customers may have about buying from an unknown shop.
One great feature that Amazon has on its product pages (and once a product is added to the basket) is a recommendation of complementary products. This is commonly referred to as cross-selling.
By recommending another product that goes together with the original product, you can inspire your customers to purchase more from you before checking out.
In fact, you could even look at this strategy as a service to your customers. If they end up buying something like a new DSLR camera, buying a second battery might not be the first thing on their mind. Giving them a reminder at the most convenient moment can quickly turn into a bigger shopping basket.
Companies like Amazon make it easy for shop owners to (re)market products to shoppers who browsed their pages. This doesn't surprise anyone anymore, but it's important to note that this is still a very effective marketing strategy.
Aiming for users who have interacted with your pages before makes sense. Either they were interested in your products or have purchased from you before. In both situations, (re)targeting these users can be more effective than lots of other targeting strategies.
Although we would always encourage sellers to create their own websites, it can’t hurt trying out some marketplaces to complement your online shop’s sales.
Even though these marketplaces may have strict rules, they have also built up a great reputation for themselves and can get your business some great exposure.
All in all, it’s best to spread out and sell your products across different channels, but ignoring your own website and only focusing on marketplace sales would be a mistake and can stunt your shop's growth in the long term.
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