Differences Between an ecommerce Store and a Marketplace | Sales Layer

What are the Differences Between an ecommerce Store and a Marketplace?

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What is the difference between an ecommerce site and a marketplace?

When it comes to selling products on the Internet, the first thought that comes to mind is to open an online shop. But there are also many brands and sellers that resort to marketplaces, those large websites that bring together thousands of products. What is the difference between selling on an ecommerce store and a marketplace?

By publishing your online shop, a brand or seller is taking care of the whole process. Managing product information, setting up the website, tracking inventory and logistics, shipping orders and providing customer service.

That's a lot of effort, resources and time. Marketplaces seem to be an easier entry point into e-commerce: sellers or brands post their products on the marketplace and can forget about the rest, as many of them offer (for a fee) warehousing, logistics, shipping and customer service.

In your online shop you control everything yourself, while in a marketplace you sell your products on a third party platform, you have to pay certain fees and there are some elements out of your control, such as customer service or return policy.

What do today's consumers prefer: ecommerce sites or marketplaces?

The current trend is that more consumers make their enquiries and product comparisons directly in a marketplace than in brand shops. However, the number of online shoppers who search via Google is also very high and they are more likely to visit an ecommerce site directly via an ad, snippet or featured link.

Undoubtedly, the favourite shopping and enquiry system of most online shoppers is Amazon. This is the main reason why so many original brands have shifted more effort to online marketplaces than to their website or mobile app.

Users' favourite online search sites

Multi-brand platforms, such as marketplaces.
The websites of large, well-known and prestigious brands (e.g. Nike).
Private sales websites (accessible only with permission or registration, such as a members-only club).

What is the reason for this increased use of and reliance on marketplaces? The same reason that led to the proliferation of "Everything a 100" shops in the 1990s.

Tracking products in a department store seems more cumbersome than in a specialised shop. But the shopper knows that such a large site offers a greater variety of choice and prices.

Advantages and disadvantages of selling on an ecommerce site

Advantages of an ecommerce site

Greater control over your platform.
More customisation regarding the style of the website and the UX (the type of shopping experience you offer).
Better visual representation of your brand.
Application of cross-sell and upsell strategies.
Control over discounts and sales periods.
Direct and personalised customer service.
Own list of customers and availability of their data for marketing actions.
Behaviour analysis (visits, clicks, shopping cart abandonment...).
More loyal shoppers.

Disadvantages of an ecommerce site

A bigger investment of resources and time.
Higher costs in software and security certificates.
Need for a team trained in maintenance and launch of ecommerce platforms.
Control and synchronisation of stock, distribution network and shipments.
Greater effort to attract traffic to the website.

Advantages and disadvantages of selling on online marketplaces

Advantages of marketplaces

Easy to set up.
Platforms with greater trust among buyers.
Possibility of standing out in categories among your direct competitors.
Higher incoming traffic.
Savings in administrative processes (the marketplace does the transactions and income for you).
Dropshipping option (the marketplace can manage stock, shipping and returns on your behalf).

Disadvantages of marketplaces

More competition (even with the marketplace's own products, which will always be given priority).
Less customisation.
Transaction fees.
Limited promotions for sellers.
Need to set lower prices due to competitiveness.
Customer service in the hands of the marketplace.
No control over cross-sell and upsell suggestions.

The ecommerce of the future: marketplaces for specialised products

Amazon is the 'search, pay and run' of ecommerce. The most popular online marketplaces are used by shoppers to make quick purchases for products they already know how to search for.

But there is another type of shopping that is gaining more and more presence: searching online calmly, with the intention of discovering new products or brands.

This online shopping trend happens more on specialised marketplaces than on generalist marketplaces such as AliExpress.

They are marketplaces with their own community, interested in a product category (craft products, furniture, DIY, etc.).
They give more opportunities to independent or new brands.
Some give access to listings of premium buyers.
They have a greater flow of users from the marketplace to the websites of each seller or brand.
They offer more thoughtful designs and more customisation options on your product or brand profile pages.
They can be international or national.

Most online marketplaces bring together small and medium-sized brands and businesses, so they are excellent platforms for earning revenue if you are just starting your sales and want to save resources. However, they are not good tools for brand awareness.