Ecommerce Platform vs Marketplace: Which Is Better?
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Ecommerce platform vs marketplace: Which is better? For small businesses, startups, and other small-to-medium enterprises, the answer is definitely an ecommerce platform.
Now that we’ve gotten this out of the way, let’s begin to decipher the why’s…
We’re all witness to the evolution of the digital landscape at a rapid scale, and ecommerce is no exception.
Ecommerce is undoubtedly on the rise, with global e-commerce jumping to $26.7 trillion in 2021 as reported by the United Nations Conference on Trade and Development.
The report further adds:
- The U.S. continued to dominate the overall e-commerce market, ahead of Japan and China.
- China, the United States, and the United Kingdom remained the top three countries in terms of B2C e-commerce sales.
Reasons Why Ecommerce Is Becoming Increasingly Popular:
The Convenience of Online Shopping
Apart from a stable Wi-Fi connection, It gives everyone the freedom to shop any time and from anywhere. It’s just so much easier and the factor of convenience plays a huge role especially when you don’t have to be bothered about store timings, commute, traffic or weather conditions etc. You can browse products 24/7 from your living room and wherever you want (with an internet connection, of course!).
More Accessible and Cheaper Technology
When physical store owners consider expanding their business by selling online, the question of whether it is worth the time, money, and effort is frequently raised.
And while there are many obvious benefits like being able to sell your products round-the-clock, there are also more subtle benefits that pop up once you begin to explore the possibilities.
One of the most basic reasons for selling online is having a storefront that is open 24 hours a day, seven days a week. This means that even when a physical location is closed, customers can still visit a business website to browse, research, and purchase products or services. In fact, ecommerce app development can often help businesses reach new customers previously unable to access your business due to geographic location or work/family obligations that limit their ability to shop during normal business hours.
More Brand Exposure
Many small businesses feel stuck in their local markets; they have loyal customers in their communities but feel like they can’t grow beyond them. Ecommerce app development offers an easy solution by giving these small businesses the ability to reach new markets and new customers with little effort or cost.
Ecommerce Platform vs Marketplace
When you’re building an online store, consider the different options available to you regarding ecommerce marketplaces and platforms. Both have their own pros and cons that can make them better suited for one person or business than another.
Let’s understand the three main differences between an ecommerce marketplace and an platform:
- An ecommerce marketplace is a storefront that hosts product listings from multiple sellers, whereas an ecommerce platform is a transaction engine.
- A marketplace lets other sellers sell their products or services, while an ecommerce platform only lets you sell your own products or services.
- A marketplace is a place for multiple buyers and sellers to meet and conduct business, while an ecommerce platform is a software program that hosts your online store.
Ecommerce for Small Businesses, Enterprises and Startups
When it comes to selling online, there are a lot of options.
Ecommerce platforms and marketplaces both have advantages and disadvantages but before plunging in, it’s critical for small businesses and startups to figure out which one is ideal for them.
So what does that mean for small businesses or startups opting for an ecommerce store? Why are so many businesses headed this way, choosing this route for their products?
Let’s dive deeper into how various components of ecommerce app development complement different business models, and how to determine which one makes sense for your business.
Traction & Visibility
The first difference is that ecommerce platforms run on your own domain name or your business name — that’s not an option with marketplaces. A marketplace like Amazon or eBay has its own URL and checkout process, so it’s highly unlikely customers will either see or register a brand when they buy products from a marketplace.
This may get traffic from people searching for your brand on Google or typing in your domain name, but most of the buyers will come through the marketplace itself, as a result, helping the marketplace get more traction and traffic through your brand.
Online marketplaces sure do help a brand’s products get more visibility, but it also means more competition.
A Large Customer Base vs Profit Margi
Marketplaces can always be a good first step for small business owners, benefitting from access to a larger customer base as well as greater visibility for their products and services.
However, an online store is simply another platform that connects buyers and sellers while also facilitating transactions between them. The seller’s products are featured alongside those of other sellers on a single website, with the marketplace owner receiving a commission on each sale.
Setup and Management
Marketplaces are typically more difficult to set up and maintain than ecommerce sites because they have multiple owners and administrators, each with their own content management system. Ecommerce websites have a central owner and administrator who handles all of the marketing, sales, and customer service.
Though online marketplaces allow for a lot of flexibility in terms of payment methods and delivery options, they’re not always convenient for customers.
With an ecommerce platform, a traditional business is able to create a personalized store, customized according to their customers’ needs, easy to use and navigate, as well as ensure everything from shipping times to quality standards is exactly what their customers want.
There are plenty of features they can add, which include order management systems, inventory management systems, shipping software, or any other tools that make shopping simpler and easier for potential customers.
There is no better time to start an ecommerce platform than right now.
Online ecommerce is a multi-billion dollar business that has expanded rapidly over the last 30 years, transforming the retail business model and helping to drive the global economy. And it continues to grow at a fast pace.
The overall percentage of online users across the globe will only increase with more and more people getting access to smart devices such as phones, tablets, etc.
The advantage for new businesses is that they can start small and expand as they begin to capture market share for themselves.
For many small business owners, the first question they ask when considering an ecommerce platform is “which one should I use?” When they should be asking about their go-to-market strategy” and the costs associated with it?
There are thousands of ecommerce marketplaces and platforms available, so narrowing down which one is best for you can be overwhelming.
At first glance, ecommerce platforms like BigCommerce, Shopify may look similar, but there are some important differences between them.
Once a small business has developed a mature customer base and outgrown the need for a presence in a marketplace such as eBay, it may be time to consider building your own ecommerce platform.
Your own ecommerce platform will allow you to sell products directly to your customers using various channels, and even sell your products directly through your website using online store platforms like Shopify or WooCommerce.
There are a number of advantages that online ecommerce platforms have over traditional online marketplaces, which include better product search, a faster checkout process, access to more customer data and payment options.
The advantage here for small businesses and startups is to start small and grow as they progress.
When deciding which features to include in your eCommerce app, consider how your app will serve your clients best.
If you’re looking for an eCommerce wizard to help you start or help your ecommerce platform scale, we would love to help you with your ecommerce project!