EN
ES
eCommerce Websites vs Online Marketplaces
What is an eCommerce Website?
An eCommerce website is simply a website to sell your products on, owned by you. It can be coded from scratch--usually at a large cost, or and eCommerce website builder, also known as eCommerce platform, can be used. These include platforms like Shopify, BigCommerce, and Wix, which we have done a detailed comparison of here. All of these eCommerce website builders have tools make it possible to build a fully functional website using simple 'drag and drop' features—no coding required, and by just one person with no prior experience, and if you're happy with sacrificing a little bit of design freedom and going for a pre-made template, you can often have your website ready in less than a day. Even if you opt for more customisation, these platforms are designed to be intuitive, so it won’t take too long to get your site up and running. What’s more, they typically charge a small monthly fee of around £20–£50, making them an affordable and low-risk option for anyone looking to start an eCommerce website.
What is an Online Marketplace?
An online marketplace is a platform that acts as an intermediary between sellers and buyers in exchange for a commission, like Amazon, Ebay and Etsy. The idea is, you build your store on their site, and the traffic comes to you. Thanks to their popularity, they attract a vast audience—for example, a staggering 13.4 million households in the UK have Amazon Prime Video membership, accounting for roughly 45% of all households, and almost 100% of Brits have heard of Amazon Prime. It’s easy to see why selling on a marketplace is so appealing.
You simply list your product, and in theory, you have almost half the country as potential customers lining up to buy from you. However, it’s not quite that straightforward. Due to the enormous size of these marketplaces, countless other businesses also sell there, making them highly competitive. That said, it’s entirely possible to rank well on these platforms and enjoy the benefits they offer, provided you’re willing to put in the effort.
The Benefits of an eCommerce Website
Now you know what an eCommerce website is, let’s explore why you might want to use one. Listed below are the benefits of using an eCommerce website.
More Control: You’re not at the mercy of a third party. A marketplace could ban you, make changes that affect your business, or even shut down altogether. With your own website, you have full control.
Better for Building a Brand: You can design and customise your store exactly how you want, making it easier to establish and showcase your brand identity. Customers acknowledge they're buying from your brand, not just a product from a marketplace.
Custom User Experience: You have the freedom to design the customer journey, from landing pages to checkout, in a way that aligns with your brand and goals.
Lower Fees: Unlike marketplaces, you won’t lose a percentage of your sales to fees beyond hosting and payment processing.
No Competition on Your Site: Once customers land on your website, there’s no direct competition attempting to win their attention or sales.
The Drawbacks of an eCommerce Website
And here are the drawbacks—the main reasons you might want to avoid using an eCommerce website.
Traffic Generation Required: You’ll need to attract customers through advertising, SEO, and other marketing efforts, which can be challenging and expensive.
Maintenance: Running your own site involves time and effort to keep it updated, secure, and functioning smoothly.
Building Trust: New customers may take time to trust your store, especially if they’ve never heard of your brand before, whereas on a marketplace, the trust is already there.
The Benefits of an Online Marketplace
The reasons for using an online marketplace are completely different to the reasons for using an eCommerce website. Let’s explore why you might prefer to use on online marketplace—below are some of the main benefits.
Access to an Existing Customer Base: Marketplaces like Amazon and Etsy bring in millions of buyers who are actively looking to make purchases, giving you an audience that’s ready to buy.
Built-In Trust: These platforms are already trusted by consumers, so you don’t need to work as hard to establish credibility. People will regularly buy from you the very first time they interact with your brand, which is rare outside of online marketplaces.
Quick and Simple Setup: It’s much simpler to get started compared to building your own website, with less maintenance.
Simpler Marketing: While you’ll still need to advertise and optimise your listings, it’s more straightforward than generating traffic independently, because you only have what limited advertising methods are available to you on the marketplace to master. Plus, marketplace shoppers are already primed to buy.
The Drawbacks of an Online Marketplace
The benefits of using an online marketplace are great! But of course, you can’t have all these benefits without any drawbacks, so we’ve listed the main ones below.
Lack of Control: You’re at the mercy of the marketplace. If they change their policies, increase fees, or ban your store, it can have a major impact on your business.
High Fees: Marketplaces can take a significant portion of your revenue through listing fees, advertising fees, or commissions.
Competition: You’ll need to compete with other sellers on the same platform, often selling similar products. This means mastering advertising and ranking tactics on the specific platform is essential to stand out.
Which Is Best for You: Online Marketplaces vs eCommerce Website
Choosing whether to opt for an online marketplace or an eCommerce website comes down to the nature of your business, the products you’re selling and what your goals are, so let’s explore which might be the right choice for you.
Who is an eCommerce Website Best For?
If You Have a Unique or Niche Product: Products that aren’t actively searched for on marketplaces won’t sell effectively, making an eCommerce website the best option. It allows you to drive your own traffic and educate a niche audience about your product.
You’re Willing to Invest in Growing Your Audience Over Time: To succeed with an eCommerce website, you’ll need a strategy to raise awareness, educate, and nurture your audience. While this takes time and consistent effort, it can lead to significant long-term rewards, such as repeat purchases, customer loyalty, and sustainable growth.
You Want to Build Brand Recognition: An eCommerce website gives you full control over your brand’s identity. By designing a memorable and consistent experience, you can create a trusted brand that customers recognise, value, and return to regularly.
You Prefer to Retain Control and Profits: Selling on your own website means avoiding marketplace fees and commissions. You’ll retain more of your profits and have full control over the customer journey, allowing you to deliver an experience that aligns with your brand values.
Who is an Online Marketplace Best For?
If Your Product Is Already in Demand: Marketplaces work best for products that people are actively searching for. If your product is too niche, it may struggle to gain traction in a competitive environment, so it’s essential to have something with broad enough appeal and sufficient search volume.
You Don’t Want to Invest in Marketing or Audience-Building: Online marketplaces let you leverage their existing audience and infrastructure to start selling quickly. This is ideal for sellers with limited marketing or business experience, as the platform does much of the work for you. However, this comes at the expense of building your own brand.
You Want to Get Started Quickly: Marketplaces offer an easy and accessible way to launch your business without creating a website or building an audience from scratch. By optimising listings and running in-platform ads, you can start generating sales relatively quickly.
You’re Comfortable with the Limitations of a Marketplace: Success in an online marketplace depends on your ability to stand out in a highly competitive environment. You’ll need to play by the platform’s rules, including paying fees, running ads, and using tactics to maintain visibility. While this reliance on the marketplace leaves you vulnerable to its ecosystem, it can still be highly profitable, so it’s worth considering if you’re comfortable with the trade-offs.
What Other eCommerce Platform Options Are Available?
Although this article is about online marketplaces vs eCommerce websites, we want you to understand your options fully, so there are a couple more to consider.
Social Commerce: In-App Social Media Shops
If you already have an audience on social media or plan to use it to build one, platforms like Instagram and TikTok now offer in-app shops. This allows people to purchase from you without ever leaving the app.
The Benefits of In-App Social Media Shops
Ease of Setup: These stores are simple and quick to set up, making them accessible for small businesses or solopreneurs.
Reduced Friction: Customers don’t need to leave the app to visit your website, making the buying process seamless.
Algorithm Favourability: Platforms are likely to favour your promotional content since they take a cut of your sales, aligning their interests with your success.
This approach is an excellent choice if you’re selling a niche product to a niche audience and want to focus on one primary marketing channel. By choosing a single social media platform and mastering platform-specific viral content creation, you can create an effective and focused strategy without spreading yourself too thin across multiple channels.
The Drawbacks of In-App Social Media Shops
Platform Fees: Social media platforms typically take a percentage of your revenue for each sale.
Limited Customisation: You won’t have the same level of control or flexibility as you would with your own website.
Platform Dependence: Relying entirely on one platform ties your business to its ecosystem and policies, which could change at any time.
Multi-Channel Selling
You don’t need to limit yourself to one platform. If your goal is to connect with as many customers as possible, you can list your products across multiple platforms—Amazon, eBay, Etsy, your own website, social media stores on Instagram and TikTok, and more.
The Benefits of Multi-Channel Selling
Greater Exposure: By being present on multiple channels, you significantly increase your chances of reaching a wider audience. Some customers might find you through a blog but never shop on Amazon, while others might discover you on Amazon but don’t use TikTok. Each platform gives you the opportunity to connect with different audiences and maximising your overall reach.
Reduced Friction: Selling directly on the platform where customers discover you minimises the resistance in the buying journey. For instance, if someone connects with you on Instagram, they can buy right there. If they find you on Google, they can purchase from your website without needing to switch platforms.
The Drawbacks of Multi-Channel Selling
Complexity: Mastering just one channel of marketing can be tough enough. Trying to spread yourself too thin across multiple platforms can dilute your efforts, leading to less success overall.
Time and Resources: Managing multiple sales channels requires time, effort, and often more budget, as each platform has its own rules, tools, and marketing strategies.
Should You Consider Multi-Channel Selling
While multi-channel selling can maximise exposure and reduce drop-off in your marketing funnel, it’s an advanced strategy that’s typically most effective after you’ve achieved success on a single platform. For most businesses starting out, we recommend focusing on mastering one channel first. Once you’ve built a strong foundation, you can expand to additional channels to scale and grow your brand effectively.
That said, if you’re a business with significant marketing experience and a larger budget, diving into a multi-channel strategy from the outset could be a worthwhile approach to maximise your reach and growth potential.
Next Steps and Order Fulfilment
Now that you’ve considered where you want to sell your goods, it’s time to think about partnering with a reliable fulfilment company. Sending your goods quickly and reliably, so they arrive on time, is essential for keeping your customers happy and maintaining your brand’s reputation no matter where you sell.
At Speedy Fulfil, we specialise in warehousing, picking, and packing to ensure your products are dispatched on time, every time. Handing over the fulfilment side of your eCommerce business to specialists allows you to focus on developing new products and marketing them, while we take care of the rest.
