Differences between Online store & Marketplace - What to Choose?

March 15, 2021 Written By Darshit Parmar

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An online store is an e-commerce website of a single seller, while on the other hand, the marketplace is a company with a group of people such as local stores, small businesses, and product owners.

There are many benefits of online selling. You can reach millions of customers than in a traditional shop. However, it is very common. There seem to be endless options, and that’s why choosing the right platform for your business can be a daunting task.

What would you choose an online store with a website or an online marketplace with a selling platform? Like you, many people doubt which is the right as both platforms are usable for online business purposes.

In this blog, we’ll discuss and learn how sellers can sell their products online through eCommerce website or online marketplace.

What is an E-commerce Website? 

As you know, an online store is a platform or website where customers place orders. And purchase may be from a local store, a big dealer, or an e-commerce store. Hence, the entity can be anything whether it’s B2C, B2B, or C2C (customer to customer).

An E-commerce website is a place where buyers purchase products directly according to the type of business. And these websites are built with e-commerce platforms like Shopify, Magento, WooCommerce, and BigCommerce.

Why Sell on an Online Store?

In the last few months, Covid-19 has changed our lives, everybody’s following the outbreak guidelines and norms. However, businesses are coming with new ideas and innovations to keep themselves functional. There’s a new trend of online shopping that has increased immensely.

Online shopping on your online store using e-commerce platforms like BigCommerce or Shopify. Online selling on marketplaces like Walmart and Amazon.

The List of E-commerce or online store statistics you should look at

  • The number of online or digital buyers in 2020 was 2.05 billion globally.
  • More than 80% of customers do online research before shopping online. 

What is the Marketplace platform? 

The marketplace platform is a third-party site that consists of product listings from several sellers across product categories. The marketplace has a huge audience and can help you connect with millions of people, but there is a chance very fewer sellers will visit you. There are plenty of benefits you can avail yourself of while making sales on a third-party marketplace.

Why Sell on the Marketplace?

Why sellers did prefer selling online with a web store or marketplace? Choose a marketplace like Amazon, Etsy, and eBay to market your products. According to the study, most people browse products in the marketplace before making the last decision. For this, an online presence is a must for the seller. Because buyers research often products to purchase, and this process takes place online.

Top Difference between Online Store & Marketplace Platforms

  1. Investment:

You need investment to launch your product on your e-commerce website.

While in marketplaces, you need less investment compared to e-commerce. Because you have multiple vendors with multiple products, and that will help you save money on handling stock as you can ask them to handle their own. Also, you can list more products than an e-commerce website as the range of products is from different vendors. While the cost of launching is also the same as an online store.

  1. Finance:

There’s a problem with an e-commerce website, which means you need to get rid of some unsold products, and there’s a chance at some point of time you have to lower down their prices.

While on a marketplace, you can easily remove a product that doesn’t sell from the listings. As you haven’t bought the products, there are no costs associated with them.

  1. Cash Flow:

It doesn’t matter how much you have spent on an e-commerce website, its profit and resources will take time to break up.

Marketplaces always enjoy higher profit since the margin generated is made up of each transaction. The profit earned is usually re-used into product development to enhance growth.

  1. Options:

You don’t get many options in choosing products while going to a regular online store as they have a small set of brands.

A marketplace offers a range of options in choosing products. As many dealers and sellers sell on the same platform. Thus, small businesses used to choose the marketplace over an online store to sell their second-hand products.

  1. The cost of development:

An e-commerce site is a one-time investment as you have to invest during the initial time only. Besides, building a website is cheap and easy for an online store.

You have to invest a lot in the marketplace as it’s more complex than an online store. It also requires a custom solution and multiple iterations which can be expensive and tough without professional help.

  1. Technology:

You don’t need any modern technology and tools to build an e-commerce site as platforms like WooCommerce, Shopify, Opencart, and Magento make it easier. All you need is coding skills and knowledge, and that’s it.

While in the marketplace, you need help as online marketplaces are coded from scratch using frameworks like backend and frontend. You know that there are multiple integrations like buyer-seller, split payment, and custom search. All of this required high and professional programming skills.

Which is right for “YOU”?

In the fight of eCommerce vs marketplace, it is difficult to choose one, and that’s why there may not be a clear winner. That’s because they both offer pretty attractive benefits for businesses. You’ll have to decide which ascribes are best.

E-commerce is the right choice for those who want to sell their stock, but all they need is money as there are more costs involved such as storing and distributing the product.

Summary:

It is a fact that the marketplace is easy to list and begin the selling process. But, it is not right for those sellers who have a vision in the long run. An online store, on the other hand, is a great choice to run things. But, building clientele and converting them into potential customers is a problem. The best choice is to make use of both platforms! Enhancing your clientele can be an initial step with time.

It’s not about online store vs marketplace. It is about utilizing both to enhance sales and profit. Give us a chance to make this happen!

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