Ecommerce platform vs. marketplace: What's right for your store?

In the world of online product sales, two prominent options emerge: ecommerce platforms and online marketplaces. While both offer opportunities for businesses to thrive, it's crucial to understand their distinctions and determine which path is best suited for artists, independent creators, and entrepreneurs.

In this article, we delve into the fundamentals, providing insights to help you make an informed decision about whether to choose one over the other or explore the potential of multichannel selling. Let's explore these options and find the right fit for your business.

• Gain an understanding of the key differences between ecommerce platforms and online marketplaces

• Learn the pros and cons of popular ecommerce platforms and marketplaces

• Get insights on brand differentiation, traffic generation, marketing, and competition in both selling channels

• Find guidance on how to choose the right sales channel for your specific business needs and goals

An ecommerce platform is a website or app that allows you to create your own online store and sell products directly to customers. These platforms provide the tools and infrastructure for sellers to manage their online store, process orders, and handle customer inquiries. 

Ecommerce platforms are typically used by businesses that want full control over their online sales and customer experience. It doesn't matter if you're selling custom wall art or offering your own art on mugs, an ecommerce platform can help you connect with customers.

Some of the most popular ecommerce platforms include Shopify, BigCommerce, Squarespace, and WooCommerce (through WordPress).

• Brand control: The sky's the limit when it comes to personalizing your store. When you sell on an ecommerce platform, you have more control over the look and feel of your online store, which can help you establish and maintain your brand's identity.

• Customization: Ecommerce platforms often offer more flexibility and customization options than marketplaces, allowing you to tailor the shopping experience to your specific needs and preferences.

• Customer data: When you sell on an ecommerce platform, you have access to more detailed customer data, such as their purchase history and contact information, which can help you better understand your customers and make informed business decisions.

• Marketing opportunities: Ecommerce platforms often offer a range of marketing tools and features that can help you promote your products and reach new customers.

• Reduced fees: Many ecommerce platforms charge lower per-order fees than marketplaces, which can help you save money and increase your profitability.

• Upfront costs: Setting up an ecommerce platform can be more expensive than using a marketplace, as you may need to pay for things like hosting, payment processing, and design costs.

• Limited traffic: When you sell on an ecommerce platform, you are responsible for driving traffic to your store and promoting your products. This can require time and money, especially if you are just starting out and don't yet have a large following or established customer base.

• Technical skills: Setting up and managing an ecommerce platform can require a certain level of technical expertise, which may be a barrier for some sellers who don't have the necessary skills or resources.

The marketplace is an extension of ecommerce as it enables businesses to reach customers, but other sellers also exist on the same platform. It provides a central location for customers to shop and compare products from different sellers. 

These sites often have a large existing customer base, offer various products, and typically offer additional features such as reviews and ratings, as well as a built-in audience of potential buyers. 

Businesses that want to reach a wider audience and benefit from the platform's existing popularity and credibility go this route. That includes creators selling t-shirts and both artists and entrepreneurs of all sizes and types.

Etsy, Amazon, and eBay are popular online marketplaces. There are countless others out there, but these are by far the best-known platforms used by people around the world.

• Large customer base: Ecommerce marketplaces often have a large and diverse customer base, which can make it easier for your products to be discovered by potential customers - around the globe.

• Traffic: Marketplaces often actively promote their site to generate their own traffic. Some may also offer marketing tools and features to help sellers promote their products, such as sponsored listings and targeted advertising, which can help drive traffic to your products.

• Reduced upfront costs: Selling on a marketplace usually requires fewer upfront costs than setting up an ecommerce platform, as you don't need to worry about things like hosting, payment processing, and design costs.

• Simplicity: Marketplaces are generally easier to use and require fewer technical skills to set up and manage, making them a good option for sellers who are just starting out and don't have a lot of experience with ecommerce.

• Trust and credibility: Established marketplaces often have a level of trust and credibility with consumers, which can help build confidence in your brand and increase sales.

• Fees: Marketplaces often charge fees for listing products and/or for each sale, which can eat into your profits.

• Limited customization: Marketplaces generally have more limited customization options compared to ecommerce platforms, which can make it difficult to create a unique and personalized shopping experience for your customers.

• Brand control: When you sell on a marketplace, you may have less control over the look and feel of your store, and your products may be presented alongside those of other sellers. This can make it harder to establish and maintain a strong brand identity.

• Competition: Marketplaces can be highly competitive, as many sellers are offering similar products to a large and diverse customer base. This can make it harder for your products to stand out and be noticed, which can impact your sales.

While both ecommerce platforms and marketplaces allow businesses to sell products online, there are several key differences between the two.

When comparing ecommerce platforms and online marketplaces, the key difference lies in ownership and control. With an ecommerce platform, you have full control over your online store's design, branding, and pricing, allowing you to create a unique customer experience. Online marketplaces offer less control and require adherence to their rules and policies, limiting flexibility but providing consistency and buyer trust.

Ecommerce platforms excel in brand differentiation, enabling businesses to build a unique identity. You can personalize your online store, from design to customer experience, setting yourself apart from competitors. In contrast, online marketplaces offer limited control over brand presentation, relying mainly on factors like price, product images, and seller ratings to differentiate yourself.

Ecommerce platforms require proactive efforts to drive traffic to your store. You'll need to implement marketing strategies like SEO, content marketing, and social media promotion to attract customers. Online marketplaces benefit from existing high traffic due to their reputation and convenience. Shoppers flock to marketplaces for browsing and comparing products, creating a ready-to-buy audience. However, increased competition is a trade-off as your products are listed alongside others.

With ecommerce platforms, you take charge of your own lead generation and advertising efforts. You implement strategies to reach your target market, attract potential customers, and drive sales. Ecommerce platforms offer various marketing tools like SEO, email marketing, social media integration, and analytics to support your marketing efforts. On the other hand, online marketplaces play a significant role in attracting leads and often handle marketing on your behalf, leveraging their established customer base. They offer features like sponsored listings, customer reviews, and advanced search options to boost visibility, although competition can be high.

Ecommerce platforms come with costs like website hosting, maintenance, and platform fees, making them a considerable investment, especially for new sellers. Online marketplaces offer a more affordable entry point, charging transaction fees instead of upfront costs. While transaction fees affect profits, the overall cost of starting is usually lower, making it popular for new and small-scale sellers.

Ecommerce platforms provide an advantage by offering an exclusive storefront without direct competition. Your products take center stage, helping build a strong brand identity and personalized shopping experience. In contrast, selling on online marketplaces exposes you to competition, requiring strategic marketing techniques to stand out. Eye-catching product images, exceptional customer service, and occasional discounts can help improve brand recognition and loyalty.

Ecommerce platforms require more time and effort for setup and maintenance due to technical requirements and continuous attention. Online marketplaces offer a turnkey solution, handling site maintenance and transaction processing, allowing sellers to focus on products and customer service.

Ecommerce platforms generally offer higher profit margins as there are no third-party commissions for each sale. Sellers have direct control over pricing strategy. Selling on online marketplaces requires efficient inventory management, strategic pricing, and optimization for search algorithms to increase profit margins.

Ecommerce platforms provide scalability, allowing customization, handling increased traffic, and adapting to growing businesses. Online marketplaces have limitations on customization and may pose challenges for high-volume sellers in managing inventory or meeting performance standards. For businesses with growth plans, an ecommerce platform is often more suitable.

Choosing the right sales channel is crucial for your business's reach, profitability, and growth. It should align with your goals, budget, and desired control over branding and customer experience.

There's no one-size-fits-all solution; it depends on your specific needs. For a unique image and control, an ecommerce platform works best. To start selling quickly and reach a broad audience, an online marketplace is ideal. Marketplaces are great for small businesses without a customer base, but you'll face competition.

There’s also the hybrid approach that lets you pursue both ecommerce platforms and relevant marketplaces at your leisure. This will require more work to implement and manage, of course, but many creators find it’s the right solution. It’s just one reason why debates like Shopify vs. Etsy are so lively.

Ready to start your ecommerce journey? Gelato streamlines printing and shipping, reducing costs. Convenient integrations with platforms and marketplaces make it easy to start designing and selling today.

The principal divergence between an ecommerce platform and an online marketplace revolves around the number of sellers involved. An ecommerce platform caters to a solitary seller - the owner of the online store - granting them the freedom to manage their own website and showcase their products exclusively. In contrast, an online marketplace acts as a virtual commercial hub, where multiple sellers co-exist, each providing their unique products through a shared storefront. This includes both the marketplace owner and numerous third-party sellers operating under a single platform.

The terms ecommerce and marketplace represent two types of online selling spaces. An ecommerce marketplace, or online ecommerce marketing, refers to a digital platform that hosts a variety of brands from various vendors or shops. These multiple brands, although different, are all showcased within the same platform, facilitating customers to browse and purchase a diverse range of products from a single, unified website.

Shopify represents the archetype of an ecommerce platform. It facilitates merchants to conceive, customize, and manage their own online stores while simultaneously providing them with the flexibility to connect with a multitude of sales channels. These channels can include a variety of online marketplaces and social media sites, thus enabling sellers to expand their digital footprint and reach a wider customer base by selling products on Shopify.

eBay, a globally recognized name in the online shopping domain, is predominantly an ecommerce marketplace. It serves as a bustling digital bazaar, offering a unique set of advantages to its primary users - buyers and sellers. eBay's platform structure enables diverse sellers to present their products, making it a melting pot of various brands and merchandise, enhancing the shopping experience for its vast consumer base.