In this growing digital economy, the marketplace platforms and online stores have become a powerful eCommerce business model.
There are many benefits to selling products online on the internet nowadays. One can reach a large target audience by selling 24/7 on online platforms than the physical shops.
When it comes to selling the services online, you may find two options available -
- 1. eCommerce websites
- 2. Marketplace Platforms.
But the main question that arises here is, which medium should you select, eCommerce or Marketplace?
Most of them believe that the eCommerce Websites development and Online Marketplace are both the same things, but there are some basic differences between these online platforms.
If you're a beginner in the eCommerce industry and want to sell your products and services online, then selecting the best platform for your business niche is not an easy task.
Here, we have a comprehensive guide for e-Commerce vs Marketplace that will help you decide which platform you can go for and where you can maximize the returns.
What is a Marketplace Platform?
Online Marketplace is a website or an app where multiple sellers sell their products and services. The online platform acts as a mediator between buyers and sellers.
It is an electronic marketplace platform where the marketplace owner manages all the transactions. Here you can find different brands of products from multiple vendors on a single platform.
The Marketplace's role is to bring together the right vendors and the right customers to drive sales through the multi-vendor Marketplace.
Some examples of the online Marketplace include:
- Amazon
- Etsy
- eBay
- Walmart
What is Ecommerce?
Ecommerce is a single vendor website where the specific brand sells its goods or services to multiple customers over the internet.
Here the products are owned by the website owner. It is similar to the physical retail store. The only difference is that the entire selling process takes place online.
There are four main types of eCommerce models:
- Business to Business (B2B)
- Business To Consumer (B2C)
- Consumer To Consumer (C2C)
- Consumer to Business (C2B)
Difference between Ecommerce and Marketplace
1. Investment
Marketplace:
The Marketplace platform will remove the initial investment cost for development. You can start selling on this platform with fewer investments.
Ecommerce Website:
In the eCommerce website, you'll need to invest a lot of money to develop the website and keep an extensive stock to attract customers.
2. Inventory
Marketplace:
Marketplaces have a large inventory, so it is easy for the customers to find the product of their choice.
It is also easy to update or replace a product that is unsold or less in demand.
Ecommerce Website:
If the inventory is more prominent, it will be easy for the customer to find the product they want.
For the eCommerce website, you'll need to invest a large amount in the inventory to offer the customers top services.
3. Marketing
Marketplace:
The Marketplaces are established and trusted websites. Selling on this platform could be advantageous as it is easy for the customers to get their desired products.
The online Marketplace also supports the seller's marketing efforts by generating leads to the site.
Ecommerce Website:
In eCommerce, you can promote your brand, but you have to target buyers for lead generation.
To drive traffic on the website, the merchant has to spend more on marketing and promotions.
4. Technology
Marketplace:
Marketplace platforms provide buyers with a one-stop solution to buy everything they need. So there is an appropriate technology used by marketplace developers with multiple API integrations for marketplace platforms.
Ecommerce Website:
eCommerce website tends to provide an online business presence with maintaining a large number of products, hence uses technology according to the purpose.
5. Launch
Marketplace:
In the Marketplace, everything is readily available. You need to register and list the products that you want to sell. It will take around a day or less.
Ecommerce Website:
Building and launching your eCommerce website is a time-consuming process, as you set up and maintain the entire website yourself.
6. Cost
Marketplace:
Here, the commission is charged based on the products. The seller has to pay a commission fee on every product purchased from the marketplace platform.
Ecommerce Website:
As you own the eCommerce website, you do not have to pay a commission fee. You need to pay for the hosting and maintenance of the eCommerce site.
Benefits and Drawbacks of e-Commerce vs Marketplace
Benefits of Online Marketplace
1) Low Investment:
Marketplace takes care of everything from infrastructure to maintenance. You do not have to pay the cost of development. Hence there is a low investment.
2) High Website Traffic:
The Marketplaces are highly trusted websites, so you'll find incredibly high traffic on these sites.
3) Excellent Customer Service:
The great advantage of selling on this site is that it maintains a high standard and provides 24 x 7 customer service.
SEE ALSO : Marketplace Business Ideas
Drawbacks of Online Marketplace
1) Charges Selling Fee:
Here you'll be charged a commission fee for selling every product on the platform. And the fee varies for different marketplaces.
2) High Competition:
There are multiple brands on the marketplace platform providing similar offerings, so there is high competition to attract the potential customer's attention.
3) No Branding:
The main disadvantage of this platform is that your brand will be unknown to the customers, making it difficult to build brand awareness and recognition.
Benefits of eCommerce platform
1) Full control over brand:
Here you have complete control to promote your brand and build your brand reputation to drive more sales.
2) Freedom to Customize:
In an eCommerce platform, you have complete control over your business. You can customize everything on the website right from your design, layout, navigation, and many more.
3) Retarget Customers:
You can get the customer insights and add the customer to your mailing lists to promote offers and make them shop again from your site.
Drawbacks of eCommerce Platform
1) It takes time to Set Up:
Building an eCommerce website with an eCommerce development company is a time-consuming process as it involves more research and planning for the development.
2) Expensive:
As you're developing a custom website for your business, it involves the cost of purchasing the domain, designing the website, and the maintenance.
3) Needs Marketing Efforts:
In the eCommerce website, you are responsible for marketing campaigns, promotions, finding keywords, and other things.
Wrapping Up
As we've discussed the key differences between eCommerce and marketplace, both the online platforms are profitable. But, parallelly both have their advantages and drawbacks that you need to consider.
If you opt for a marketplace, it will give you the quickest launch with a minor investment but will not help you build your brand awareness and increase customer loyalty.
And on the contrary, if you're concerned about making your online store, you can go for an eCommerce website, but it will increase the overall Ecommerce development cost.
While making a decision, think carefully about all the aspects mentioned above in the post. It is up to you and the budget you want to invest.
Still, if you have any queries in selecting the best platform for your business model, get in touch with us. Our expert team will guide you through the process.
