Ecommerce site vs. marketplace: Learn how to choose the best model

Ecommerce site vs. marketplace: Two different models

What is an ecommerce website?

It’s like a cozy store where you welcome shoppers, but online!

To build your website, there are turnkey solutions like WiziShop (to name just one) that are ultra-accessible and designed to best pamper your visitors.

The same thing applies if you have a physical shop: selling on your own ecommerce site ensures that you extend the experience beyond your walls and bring your world to life at any time of the day or night for your buyers, on their smartphone or computer!

What is a marketplace?

Amazon, Cdiscount, Etsy, Fnac, Rakuten... These are some giants of online commerce, sites that are all marketplaces functioning as veritable commercial hubs.

In practical terms, when you sell on a marketplace, you don’t need to create your own store from scratch.

You open a seller account, put your products online, and in just a few hours, you can start reaching a huge audience.

Here’s a real-life example: I’m looking for a vase to brighten up my living room decor. On Amazon, I just typed in “colorful vase” and came across this listing.

Do I personally know the “VanEnjoy” store? Not at all. Am I going to order this vase? Yes, because I like it, and the price suits me. 

And outside of the marketplace, I’d certainly never have known about this brand, this vase, and the pleasure of finally finding my perfect new decorative item to hold my next bouquet of roses!

Every sales model has its drawbacks, so we’ll now analyze the advantages and disadvantages of each medium.

Spoiler alert: there’s no right or wrong situation, just uses that are suited to each need.

Advantages and disadvantages of ecommerce sites

Advantages of ecommerce sites

• Total control over your business

The first advantage is total control. The brand, data, shopping experiences: everything is in the hands of the e-tailer.

It’s the e-tailer who chooses their graphic universe (charter, visual identity, page design), who builds their shopping experience (clear navigation, simplified checkout process, additional product suggestions), who decides how to communicate (tone, messages, brand story), and who adds the appropriate features (search engine, practical filters, personalized recommendations).

• Your strategy, tailored to your needs

With an ecommerce site, it’s the e-tailer who drives their strategy in real time without worrying about any rules.

An e-tailer who sees a trend on social media can decide on the spot to order or manufacture the popular product, create content around this new item on their social media channels, and determine the price they want to charge for this new product.

For example, Labubus are all the rage on social networks: for an artist who crochets, they can create crocheted Labubus, make videos on social networks with the chance of going viral, sell their creations on his site, and all that without asking anyone for anything! 

I’ll share a video tutorial to turn this idea into a commercial boom… Let me know if it works for you!

• Your own customer database

Customer loyalty becomes easier and, above all, more effective with an ecommerce site. When a consumer places an order, they remember the e-tailer’s brand first and foremost, not that of an anonymous platform.

Here’s a short checklist to aid you in understanding the importance of customer relations in ecommerce product sales:

These steps help create a lasting relationship, which goes well beyond the simple transaction and gradually transforms customers into true brand ambassadors: what a pleasure for the retailer to see one of their customers share their latest finds on their Insta account in a completely spontaneous way following their purchase (this is what we call UGC, user-generated content)!

Disadvantages of ecommerce sites

• Visibility of your ecommerce site

Ecommerce is based on a clear principle: your website doesn’t benefit from an existing flow of visitors, unlike marketplace services, which bring together thousands of sellers and buyers every day.

• Acquisition costs

All of this requires a significant marketing investment, especially at launch.

Creating content, working on search engine positioning, testing and adjusting advertising campaigns... All these actions require time, energy, and budget. Developing an ecommerce business is more like running a marathon than a sprint.

• Burden of logistics

Owning an ecommerce site also means taking on the entire management of the customer experience: after-sales service, product returns, inventory, shipping, etc. The e-tailer becomes the sole guarantor of shopper satisfaction.

Whereas a third-party platform such as a marketplace can take care of some of these aspects, here everything rests on the e-tailer’s shoulders.

Advantages and disadvantages of marketplaces

A marketplace is a bit like the vast concourse of an international airport: thousands of people pass through it every day, ready to board flights to new destinations.

Amidst this constant flow, there are shops and pop-up stores that attempt to capture the attention of travelers looking for specific products before their trip or simply wanting to browse aimlessly.

Advantages of marketplaces

• Immediate traffic

In online sales, the marketplace model is appealing because of its instant visibility. Whereas the ecommerce model requires building up a website audience step by step, a marketplace offers direct access to millions of active visitors.

Every day, thousands of sellers offer their products and take advantage of marketplace services to quickly reach an existing customer base.

• Buyer confidence

The reputation and services of these platforms play a key role: many consumers prefer to buy through a third-party platform such as Walmart or Etsy because they’re already familiar with the environment and feel protected there.

Return policies, secure payment, and centralized customer service inspire confidence and reassure both sellers and buyers.

• Speed of launch

Another major advantage of the marketplace model is its ease of deployment.

There’s no need to create a complete website or develop a sophisticated checkout process: all you need to do is open a seller account, upload product listings, and add a few photos.

Sales can begin in just a few hours.

Disadvantages of marketplaces

• Competition

On a marketplace, goods are listed alongside dozens, sometimes hundreds, of other similar items.

All it takes is for a competitor to slightly lower their price or display more positive reviews to divert buyers’ attention. It’s a constant battle for visibility.

Let’s go back to the example of my “colorful vase” on Amazon: at the top left of the results page, you can see that there are more than 6,000 colorful vases listed on the platform!

• Sales commissions

Added to this is the commission charged on each sale. With each transaction, a percentage is paid to the platform, which automatically reduces margins. The higher the sales volume, the more difficult this cost becomes to absorb.

To give you an idea of the scale, here are the selling fees charged by Amazon:

• Commercial dependence

Selling on a marketplace means accepting dependence on the platform.

The rules can change overnight, a product listing can be suspended without notice, and visibility depends entirely on algorithms that no one controls... especially not external e-tailers.

In other words, e-tailers are never completely in control of their business.

And that’s where the real question arises: should you focus on your own ecommerce site, choose a marketplace, or combine the two?

Ecommerce site vs. marketplace: How do you make the right choice?

Based on your products

The choice between an ecommerce website and a marketplace starts with a simple question: the nature of the products.

If the items are exclusive and original, an ecommerce site becomes a powerful ally.

Take the example of a handmade jewelry designer: on a marketplace, their unique pieces are likely to get lost among thousands of similar items, which are often standardized and offered at low prices...

On their own ecommerce site, on the other hand, they can showcase their brand universe, tell their story, highlight their craftsmanship, and attract customers who are looking for precisely this authenticity and personalization.

An ecommerce site also allows them to cultivate a high-end image and create consistent experiences from the first click to delivery, as is the case here with Moon Magic.

Conversely, if the products are more standard or intended for volume sales, as is the case for electronic accessories, toys, everyday goods, trendy items, etc., marketplaces often become the most suitable platforms.

In this case, the key is to manage your competitiveness: work on your offering, optimize your product listings, and collect as many positive reviews as possible to stand out from the competition, as is the case here with wireless mice, for example.

Based on available resources

The second element to consider is the available resources, whether financial or human.

If the ecommerce seller has a solid marketing budget, a little time, and the desire to invest in content creation, advertising, or SEO, then having an ecommerce site becomes advantageous.

Based on growth objectives

This raises an essential question: should you aim to sell quickly or focus on the long term?

If the ambition is to build a sustainable brand, then an ecommerce site is essential.

A creator of ethical goods, for example, can highlight their responsible approach and manufacturing process and create a shopping experience that reflects their values.

In the long term, this type of strong positioning can only be fully expressed on a dedicated digital commerce site: this is the case for a brand like Herbivore, which has built its online reputation with a strong identity.

• Inspiring storytelling content starting with an ecommerce site:

• Essential products on marketplaces:

• Products now sold in physical stores:

Based on your need for autonomy

The choice also depends on how you like to work.

If you’re primarily looking for freedom, independence, and total control over your branding, then an ecommerce site is the ideal option.

The e-tailer decides everything: pricing policy, communication strategy, promotions, customer relations, etc.

Well, we’ve provided quite a bit of information, so to help you really clarify all the points, let’s take a look at a small summary table of the fundamental differences between the models.

What if, ultimately, the real solution was not to choose, but to combine both models?

Many entrepreneurs fall into the trap of thinking it’s either selling via their own ecommerce site or via a marketplace, when in fact the two approaches can complement each other perfectly.

By combining the two, you win on all fronts: the speed and immediate visibility of the marketplace, combined with the independence and sustainability of an ecommerce store.

The marketplace becomes a launch pad and a showcase, while the ecommerce website allows you to build a solid, profitable, and independent business.

Was our advice helpful? What form will your future online sales business take? We want to know everything in the comments section of this article!