Ecommerce vs Marketplace: Where Should You Start Selling Online?

Verified & Reviewed

Written By

Written By

Subscribe for More

There are many benefits of selling products online. You can reach more customers than a traditional brick and mortar shop, sell at all times of the day, and refrain from having to build a physical storefront.

However, “online” is very general. There seem to be infinite ecommerce options, with new sites popping up all the time. Choosing the best place for your business to sell products online can be a daunting task.

Some merchants look to get started on either a marketplace or by building their own website. Let’s define what we mean by each:

  • Marketplace: A third-party site that includes product listings from many sellers across product categories. Examples include Amazon, Facebook Shops, eBay, Walmart Marketplace, and Etsy.
  • Own website: An independent ecommerce website that a seller runs, where buyers purchase goods directly from the website belonging to the business. Many are built using ecommerce platforms like Shopify, Magento, BigCommerce, and WooCommerce.

What’s the difference between marketplaces and ecommerce sites?

The main differences between marketplaces and ecommerce sites are simple, but really depend on who are and what you’re selling. Marketplaces will make millions of visitors available to you, but you’ll also be fighting with thousands of sellers to be seen. An ecommerce website is a way to differentiate yourself, but you’ll need to put in serious effort to ramp up traffic and drive sales.

This article will help dive deeper into which pros and cons are worth it to your business.

Which is best for your business? Learn the general pros and cons of selling your products on a marketplace and your own website.

What are the benefits of selling on a marketplace?

There are many advantages when it comes to selling on a third-party marketplace. Learn why many sellers use this option.

It’s convenient to get started and maintain

An online marketplace can simplify ecommerce, especially for new sellers. The infrastructure is already there, thus saving retailers time and hassle associated with building a website from scratch.

Online marketplaces are not owned by any individual seller, so the transaction and payment are handled by the marketplace itself. The seller’s experience involves few steps to add and modify product listings.

There are tons of visitors who already make purchases there

Marketplaces are well-established, highly trusted websites. People are comfortable making purchases on them and accustomed to going there instead of somewhere new to find products.

As many marketplaces are already household names, they have millions of shoppers who are searching for products like yours. It doesn’t require much effort to get your products in front of potential customers.

What are the downsides of selling on a marketplace?

While they may seem like the easy option, there are some disadvantages of using a third-party site to sell your products online.

There are multiple competing brands on the same site

Though your product is unique, there are plenty of similar offerings out there competing for your potential customers’ attention. In a crowded marketplace, your product might not necessarily stand out.

Even more, your competitors may target shoppers who visit your listings and place advertisements for their products on your pages. Depending on the intensity of competition in your product category, you may not get the exposure or easy sale that you’re hoping to achieve.

People who buy your products may never realize you exist

Many people who shop on marketplaces assume they are buying from that marketplace (even though they are purchasing your products). The customer is going to remember the marketplace the next time they buy again – not your brand. In most marketplaces, the focus is not on the sellers, but rather the products.

There is little, if any, customization offered to individual brands. This makes it extremely difficult to build brand awareness and recognition, and ultimately differentiate your business.

You can’t build a customer list to market to in the future

Since marketplaces serve as a third-party, they don’t let sellers communicate with buyers outside of the site (however, the marketplace can contact your customers again in the future). This means you cannot send your customers future promotions, new product announcements, or simply remind them that your product exists to drive future sales.

The reality is it’s much easier (and less expensive) to retain a customer than it is to get a new customer. Without building a customer list, you are relying on new sales only; You can’t take advantage of past purchasers.

Why should you use your own website to sell online?

There are plenty of reasons to create and sell on your own ecommerce website. Learn the top advantages of doing it yourself.

Establish and maintain full control over your brand

When you run your own ecommerce website, you have total control over what it looks like, what it says, and how it works. It doesn’t have to be generic or boring. This is your chance to show the world your brand’s personality. There are very few restrictions, cookie-cutter guidelines, and character limits.

You get to create the shopping experience that you want for your customers. Many ecommerce platforms offer flexibility over design, pre-built templates to choose from, and integrations with other systems.

[Related article: How I Started My Online Store: 5 Steps to Successfully Launch a New Product]

You can retarget shoppers to become repeat buyers

One of the greatest advantages of managing your own store and website is that you get direct access to your customers. This enables better customer service and ultimately more upsell possibilities.

You can target people who visit your site with ads, market to those who have already purchased from you, and stay connected in the future. Email list building helps you build awareness, bring in steady revenue, and run promotions to get rid of inventory.

What are the downsides of selling on your own website?

There are some pain points of building your own ecommerce website. Learn the most common points of frustrations faced by sellers.

Setup can be time-consuming and technical

Building your own site can be as simple or complicated as you want it to be. With the rise of ecommerce platforms and do-it-yourself tools, it’s never been easier to get a site up and running. However, you may still run into technical issues or at the very least, time constraints.

There are many steps, including choosing a domain name and hosting service, setting up shopping cart and credit card processing software, and creating content for the site. Some solutions streamline and take care of these processes for you, but nevertheless, there will be work involved to set up and maintain the site.

You have to work to get shoppers to your site

Once you launch your website, your work is not done. You need to get people there. Visitors won’t magically flock to your site, or even find it right away for that matter.  There is marketing effort that goes into setting up the right campaigns to get the word out. You have to know, learn, or pay for the expertise.

Once you get them to visit your site, you then have to convert them into becoming paying customers. You should optimize your website to have a great user experience, which involves a compelling message, placement of buttons, mobile experience, and more.

[Related article: 3 Ways to Improve Your Ecommerce Store]

How to choose the right ecommerce platform

The best place to sell online will differ retailer to retailer depending on their products, needs, and goals. Each individual marketplace and ecommerce platform has its own unique differentiators and drawbacks.

There are also monetary costs associated with both. Marketplaces can charge a wide range of fees such as listing your products and taking a percentage of each sale. Many ecommerce platforms that help you build a website charge a monthly hosting fee. You can also spend a significant amount on ads for each, as well as on managing your ecommerce shipping.

To achieve customer reach and brand recognition, many online merchants sell on both marketplaces and their own website. Some choose one to start and expand into others once they become more established.

Regardless of the ecommerce platforms you sell on, it’s important for them to be integrated with the other technologies you use. When systems are connected, they can talk to one another for greater visibility and less manual processes.

ShipBob’s fulfillment software seamlessly integrates with all major ecommerce websites and marketplaces. Here’s how ShipBob works:

  • It only takes a couple of minutes to sync up your store(s).
  • You send your ecommerce inventory to a ShipBob fulfillment center.
  • As soon as an order is placed, ShipBob automatically fulfills the order for you and can even help you compete with marketplaces by offering 2-day shipping.
  • You gain real-time visibility into orders, shipments, inventory levels, sales channels, customers, and more.

Learn more

Learn how to bring in more customers that are actually likely to place an order on your store — and turn them into repeat buyers. Download our guide on How to Nail the Customer Experience.

Order fulfillment services

You omnichannel fulfillment partner that's an extension of your brand, from unboxings to 2-day shipping.

Warehouse management

Have your own warehouse? Get ShipBob WMS to reduce mis-picks, save time, and improve productivity.

Global scalability

Grow into new geographies with ShipBob's international presence in the US, UK, EU, Canada, and Australia.

Written By:

Kristina is the Sr. Director of Marketing Communications at ShipBob, where she writes various articles, case studies, and other resources to help ecommerce brands grow their business.

Read all posts written by Kristina Lopienski