Where should you sell your products online?

Entrepreneurs are always looking to find the most efficient sales channels for their businesses, and most of the time they have to choose between them. If you have a business that sells online products, how do you decide between an ecommerce website or a marketplace and more than that, do you have to choose only one of them? Here’s what you need to know about setting up your business online sales channel and how each option can help you develop your business strategy, regardless of the context.

What is an e-commerce website?

In short, e-commerce is the activity of buying and selling goods online using electronic data, including electronic payment. Nowadays, an e-commerce website has come to describe the acts of purchasing and selling through platforms such as Shopify, Magento, etc. These already existing platforms make the job easier for entrepreneurs, especially if they don’t have the resources to create a website from scratch for their online store.

What is a marketplace?

The marketplace activity takes place on a third party site or platform, for international ones we have the most famous ones such as Amazon, Alibaba, eBay, Walmart, Etsy, whereas in Romania, we have platforms such as eMAG, CEL.ro, Doraly, Breslo.ro or Credimag.ro. The marketplace is an alternative to traditional e-commerce, except that you are not owning the website. It means you sell your products and services in an online ecosystem operated and owned by a much larger vendor, which brings together more vendors.

For small and medium-sized businesses, which aim to sell their products online, we have highlighted some of the benefits and downsides of each of the channels.

Advantages for an e-commerce website

  • You have greater control

If you choose to create a website, you have control over the supply, storage and products distribution, as well as how you manage your pricing strategy. Moreover, you are the only one who establishes and controls the interaction with your customers all the way through.

  • You provide a personalized shopping experience

Getting to know your target audience and establishing who your customers are, offers you the possibility to provide them a shopping experience especially created and adapted to their needs. That way, finding products is much easier, and the whole browsing interaction process until check-out becomes as intuitive as possible.

  • You get insights about your business

Since you have direct access to customers, you automatically receive insights about their buying behavior, transaction history, order value, time spent on the page, and frequency of purchases. All these things can help you improve your marketing business strategy, in order to develop it as much as possible and in a faster way.

Downsides for an website e-commerce

  • You have higher costs from the beginning

One of the main reasons entrepreneurs avoid having their own e-commerce website is the set up cost and its configuration. Hiring a specialized team to set up your store’s website involves not only a substantial financial investment, but also time resources that you assign to this task.

  • You are in charge of the marketing strategy: SEO and paid advertising campaigns

Once the website is set up and configured, you will have a constant need for exposure and visibility, either through a well-developed SEO strategy and paid public campaigns, or both of them. Without a strategy in place, your online store will not be visible and will not be able to attract organic traffic, so you will need digital performance or SEO specialists to take care of this aspect.

  • You need to be working with an online payment system

No e-commerce website can function without a “payment gateway”, which means you have to ensure a secure payment to your online buyers. Thus, you will need an online payment solution, i.e. a Paypal processor, one of the best known for buyers in Romania. Choosing an online payment processor requires you to take into consideration criterias such as the commissions costs you will have to pay and the online payment security you offer to your customers.

Advantages for a marketplace

  • You profit from lower maintenance costs

Already existing marketplaces have an established policy, starting with everything that means ordering, delivery from the fulfillment center, to things related to order cancellation. Therefore, the purchase transaction process becomes much easier for you, and the maintenance and listing costs of the products are lower, because these tools are available to all sellers registered on that marketplace.

  • You show transparency and trust to your customers

Customers tend to use platforms that they already know and have had a pleasant experience with. So, a marketplace offers you a large base of buyers who are confident in purchasing products online, otherwise, if they had met your products on another website for the first time, would be reluctant to buy them, not knowing about their quality, the delivery and payment process and the security of the data they provide.

Downsides for a marketplace

  • You have sales, but you also have commissions for them

Of course, you will be happy to see that your online store records sales in a marketplace, but each of them will have a commission, which you may not be so happy about. Here, it depends a lot on the policy of each marketplace, some charge commissions for listing products, others for selling them.

  • You cannot create a different shopping experience for your customers

When you sell your products together with other sellers, you will face the restrictions imposed by the structure of the marketplace you are on, not being able to promote them at your will. Moreover, buyers will remember the name of the marketplace, rather than the name of your business.

  • You always fight the competition

You are not the only one who wants to sell, and from this point of view the challenges are great. The competition is tight and differentiating from the crowd means time and financial resources. Although the SEO component is very defined on a marketplace, to upload your products to the top, you will have to pay, and even when you pay, no one guarantees that you will have a large sales volume.

If you already own an online store or thinking of developing one, you should be aware that the current trend for the next period is that the number of online purchases will continue to grow, not only because of the pandemic context, but also because of the constantly changing consumers’ behaviour, who are now more inclined towards digital interactions than ever. Also, the marketplace platforms, available for the online sale products will also continue to expand. Regardless of deciding to create your own e-commerce website or to sell on a marketplace, you should offer your customers the best e-fulfillment services and shopping experiences. And in order to make it easier for your business, we recommend you work with an e-fulfillment service provider.