eCommerce Platforms vs. Marketplaces: Which is Best for Your Business?
Hey friends!
Today, we're diving into a comparison between eCommerce platforms and online marketplaces. Once upon a time, if you wanted to buy something, you had to physically visit a store. And while that's still an option today, the Internet has introduced us to eCommerce—a way for companies to sell products online, making life significantly more convenient for buyers who want to shop from the comfort of their various homes. It's also a boon for sellers, including small businesses like yours.
But did you know there's more than one way to sell online? Today, we’re going to explore the differences between an eCommerce platform and a marketplace. Let's start by defining each term.
What are ecommerce platforms?
An eCommerce platform is a digital space where a business sells its own products directly to consumers. These platforms typically serve as the backbone of online stores found on a company’s website. For instance, when you visit a site like columbia.com and purchase an item of clothing, you’re engaging with an eCommerce platform. Popular examples of eCommerce platforms include Shopify, BigCommerce, and Magento. While you might not see the platform a business uses at first glance, it's there, working behind the scenes to support their online store.What are eCommerce Marketplace?
An eCommerce marketplace functions similarly to a platform, allowing users to shop online. However, the key difference is that marketplaces aren't exclusive to a single company. Instead, they feature products from a variety of businesses. Amazon is perhaps the most well-known example. While Amazon sells some of its own products, it also allows other businesses to list and sell theirs. So, you could purchase a Columbia sweatshirt directly from Columbia’s online store, or you could buy it through Amazon or another marketplace.Now that we’ve clarified what eCommerce platforms and marketplaces are, let’s explore the benefits of each.
Benefits of Platforms and Marketplaces
Why is e-commerce system important?
One of the biggest advantages of using an eCommerce platform is that you have complete control—no third party dictates how you operate. This control manifests in several ways. First, you have the freedom to design your store to reflect your unique brand. Whether you prefer neon colors and quirky fonts or something more traditional, the choice is yours—though it's wise to consider best practices in design.Second, running your own online store allows you to gather valuable data about your visitors. This first-party data belongs to your business, not to a third-party entity. You can use it to recommend products, target ads, and follow up on abandoned shopping carts.
Why eCommerce Marketplaces is important?
While eCommerce platforms offer great features, online marketplaces come with their own set of perks. A major one is increased visibility. Building an audience for your own online store takes time and effort, but selling on a marketplace like Amazon can instantly put your products in front of a massive audience. Even though you still need to optimize your listings for search results, being on a well-known marketplace boosts your visibility far more than selling solely on your own site would.Drawbacks of Platforms and Marketplaces
What is the negative impact of e-commerce?
The biggest downside to using an eCommerce platform is that it requires more effort compared to a marketplace. Building and running your own online store demands significant time, resources, and maintenance. Not only do you need to design the store, but you also have to drive traffic, ensure everything functions correctly, and manage the ongoing operations.What is the negative impact of eCommerce Marketplaces?
Marketplaces aren't without their limitations. The primary disadvantage is that you don’t have full control. While you can list your products and perhaps customize your storefront to some extent, you're still bound by the marketplace's rules and layout. If you have specific ideas about how the sales process should work or how your pages should look, you may find yourself constrained by the marketplace's structure.Our Advice for Making a Decision
So, how do you decide between an eCommerce platform and a marketplace? The simplest answer is: Use both if you can. Adopting a dual approach allows you to reach a wider audience by selling on your own website while also taking advantage of the traffic from marketplaces like Amazon. This strategy lets you enjoy the benefits of both types of eCommerce.
However, if you only have the resources to manage one, it's generally a good idea to prioritize your own website and its eCommerce platform. This way, you maintain more control and gradually build brand awareness as more people visit your store.
Ultimately, the choice depends on what works best for your business and budget.
That wraps up our discussion on eCommerce platforms versus marketplaces. Now that you understand the differences, you’re ready to set up the best option for your small business.