Ecommerce Platform vs. Marketplace: Which Is Better?

In this video, Carly from the WebFX Interactive team will discuss the difference between an ecommerce platform vs. marketplace. Keep reading to learn more!

Transcript:

Hey friend! Today we’re going to compare ecommerce platforms and online marketplaces.

There was a time when if you wanted to buy something, you’d have to go out to a physical store and get it. And in case you weren’t aware, you can still do that today — but with the Internet, we also got ecommerce, which is where companies sell things online.

It makes life so much easier for buyers, since they can buy things from their own home.

It’s also fantastic for sellers like your small business. But there’s more than one way to sell online, and today we’re going to look at the difference between an ecommerce platform and marketplace.

What are an ecommerce platform and marketplace?

To start off, what exactly are an ecommerce platform and an online marketplace? Let’s take a moment to define each one.

What is an ecommerce platform?

An ecommerce platform is an online platform where a business sells its own products directly to consumers. These platforms are usually used for online stores found on a company’s website.

So, if you go to a retailer like…columbia.com…and buy an item of clothing there, you’ve basically made a purchase through an ecommerce platform.

Some examples of ecommerce platforms include Shopify, BigCommerce, and Magento. You won’t immediately see the ecommerce platform a business uses unless you dive into the technical side of their website, but just know that it’s there supporting their ecommerce business.

What is an ecommerce marketplace?

An ecommerce marketplace works similarly to an ecommerce platform, in the sense that users can visit some type of online store to buy products. But there’s an important difference: Marketplaces aren’t limited to a single company. They feature products from lots of businesses.

Probably the most well-known example of this is Amazon.

Amazon does sell some of its own products, but it also allows other businesses to sell there.

So, you could buy a Columbia sweatshirt on Columbia’s online store, but you could also buy it through Amazon or another marketplace.

What are the benefits of an ecommerce platform vs. marketplace?

Now that we’ve established what an ecommerce platform and marketplace are, let’s look at the advantages that come with each one.

Benefits of ecommerce platforms

There are a few major benefits of using an ecommerce platform.

The biggest benefit is that it’s entirely controlled by you, not by a third party. That means a few different things.

Firstly, you can set your store up however you want and allow it to reflect your unique brand. If you want to use neon colors and crazy fonts everywhere, you can! You are free to do so — although that may not be the best design advice.

Secondly, when you run your own online store, you can gather data about the people who visit it.

This first-party data is owned by your business, not a third party. You can use that data to recommend other products to users, show targeted ads across the web, or follow up about abandoned carts.

Benefits of ecommerce marketplaces

As nice as those ecommerce platform features are, online marketplaces come with their own benefits.

One of the biggest benefits is increased visibility.

When you’re running your own store, it takes time to get your products in front of people. But if you sell on Amazon, for example, you’re instantly on one of the biggest sites in the world.

Of course, you still have to take the time to get your products in the Amazon search results.

But still, being on Amazon makes you much more visible than if you just sell your products on your own site, and it comes with a lot more traffic.

It’s also just way quicker and easier to set up an Amazon store than to build a whole website exclusively for your business.

What are the drawbacks of an ecommerce platform and marketplace?

Ecommerce platforms and marketplaces both have benefits, but they also both have drawbacks. Here are a few of the cons of using each type of ecommerce.

Drawbacks of ecommerce platforms

Probably the biggest downside of an ecommerce platform is that it takes more work than a marketplace.

You have to invest a lot of time, effort, and resources into building and running your online store.

To start with, it’s more work to set up the store in the first place. You have to build your store entirely on your own, including coming up with an appealing design.

But it’s also more work to run the store after it’s finished. You have to bring in traffic, make sure all of your features work at all times, keep your website from crashing, and more.

Drawbacks of ecommerce marketplaces

Marketplaces have drawbacks, too.

The main disadvantage they have is that in a marketplace, you aren’t in control of everything.

You can list your products, and some marketplaces might let you customize your storefront a little bit.

But overall, you have to adhere to whatever format and guidelines the marketplace gives you.

That means if you want the sales process to work a certain way, or you want the pages to have a certain look… tough luck. Amazon’s not going to restructure their whole site for you — you just have to accept the layout they use.

Ecommerce platform vs. marketplace: which should you choose?

So, when you’re looking at an ecommerce platform and marketplace, which one should you go with? Well, the simplest answer is: Both, if you can.

You may want to try a two-pronged approach where you sell both on your own website and through marketplaces like Amazon.

That means you reach a wider range of consumers, so you make more sales and get the benefits of both types of ecommerce.

But what if you only have the time or resources to manage one? In that case, it’s probably best to prioritize your own website and its ecommerce platform.

That way you retain more control and raise brand awareness as more and more people visit your store. But, do what works best for your business and your budget.

WebFX can help you get the most from your ecommerce

Well, that wraps up our discussion of ecommerce platforms vs. marketplaces. Now that you have an idea of the differences between the two, you can start setting them up for your small business.

And if you want to learn more about ecommerce and online marketing, you can subscribe to our YouTube channel, or to our email newsletter, Revenue Weekly.

Thanks for watching, and we’ll see ya next time!