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E-commerce vs. marketplace: why you should build your own online store.
Many startups might feel that a marketplace is the best avenue to get seen by new customers. But building your own e-commerce store benefits your brand in the long-run, giving you more control over how your services are presented.
Explore the differences between how marketplaces and e-commerce platforms work, and why you should put the effort into personalizing your own online store.
What is an e-commerce platform?
An e-commerce platform is an online space to sell products or services. Your brand is the focus, giving you the opportunity to showcase its mission, story and USPs.
Typically a website or app, an e-commerce platform enables businesses to establish an online presence, detail their offering and seamlessly sell their services. The platform allows customers to browse at their convenience and facilitates transactions.
A user-friendly e-commerce platform gives a business owner access to comprehensive analytics. They can manage sales, get paid and track customer engagement online to refine their marketing strategy.
What is an online marketplace?
51% of US consumers shop “exclusively” or “a lot” on marketplaces (HubSpot). A digital marketplace acts as a facilitator, connecting buyers and sellers, enabling transactions to take place online. It typically provides a range of tools for communication, secure payments and dispute resolution.
Those who run a marketplace don’t own any inventory or provide services; their business is simply being the middleperson. Their branding takes center stage, with sellers adhering to a set template and display rules.
E-commerce vs. marketplace: The main differences
|E-commerce store||Online marketplace|
|Ownership||Ownership of an e-commerce store rests with your business, providing full control over operations and decision-making.||Ownership of an online marketplace is with a single entity, hosting and facilitating transactions for multiple sellers or businesses.|
|Product/service listings||Your business owns the products or provides the services that are listed.||Various vendors in one place selling their own products or services.|
|Branding||An e-commerce store shares unique brand identity of your business with complete control over all aspects.||Marketplace branding establishes a unified and recognizable identity for the online platform, separate from individual sellers.|
|Transaction process||Your business handles transactions, ensuring a direct seller-customer interaction.||Facilitated by the marketplace, allowing for transactions between buyers and sellers with the platform taking a fee.|
|Inventory/service control||You have full control over managing and maintaining your own inventory/service suppliers.||Inventory control/services may be shared among multiple sellers, providing a range of options for customers.|
|Seller interaction||Facilitates direct communication and interaction between you and customers, fostering personalized engagement.||Seller-customer interaction is typically limited as most communication is through the platform.|
|Marketing||You’re responsible for your own marketing and branding efforts to attract and engage customers.||The marketplace takes the lead in marketing and promoting itself, offering limited advertising options for individual sellers.|
|Revenue model||Depends on the business earning revenue directly from your own service/product sales.||Based on charging fees or commissions from the transactions made by sellers on the platform.|
|Competition||Competes with other similar online retailers offering comparable products in the market.||Sellers compete with each other to attract customers and make sales on the platform.|
Why build your own e-commerce website?
Because it’s your chance to shape your brand, control your message and own your interactions. Don’t settle for a reduced presence in a marketplace. Building your own website paves a direct route between you and your audience.
Having your own e-commerce store gives you complete ownership. The marketplace comes with limitations and rules, often leaving you in direct competition in a restricted space. With your own place, you can customize every aspect of your site to reflect your vision and goals. You’re putting your brand front and center, where it can connect with those who resonate with what you say, do and sell.
Highlight your brand
Your brand is your identity, a representation of your business and the first thing that comes to mind for your audience. You only get one shot at a first impression; should you leave that to a marketplace?
Listing on a popular marketplace seems tempting when thinking about the time it takes to establish a website. But marketplaces dilute your branding as you compete for a small amount of online real estate. An e-commerce site gives you complete ownership, allowing you to increase brand recognition, establish a distinct web presence and stand out from competitors.
Design, visual elements and overall customer experience are managed by you. You can add a ‘Book Now‘ button to any page and turn it into a conversion machine, or even create a standalone Booking Page featuring your logo, brand colors, content and reviews.
Curate your offering
Relaying your skills and the uniqueness of your services is crucial to converting new leads. An e-commerce store enables you to describe what you do in your own style. You can use your own words, upload images and videos, and feature reviews from customers. A marketplace has its own rules for listing your services; descriptions are tailored to them, not your customers.
A recent study found that consistent branding has the potential to boost revenue by 20% (Marq). With your own customizable e-commerce site, you can share everything relevant to your brand: your Instagram and Facebook pages, company news, new content and articles, event invites and more.
Local search engine optimization (SEO) plays a vital role in attracting customers within your area. By implementing local SEO strategies, such as optimizing your website for location-based keywords, creating location-specific landing pages, and ensuring your business is listed accurately on online directories and maps, you can improve your visibility in local search results. This helps potential customers in your district find your brand easier and increases the likelihood of driving foot traffic or generating leads from your local community.
Nurture customer connections
Owning an e-commerce store helps to establish direct relationships with your customers. Provide accessible support and tailor your communication to meet individual needs.
This level of engagement fosters trust, loyalty and customer satisfaction, boosting repeat business and positive word-of-mouth. By prioritizing quality communication with customers, your brand is associated with exceptional service.
An e-commerce website enables you to discuss your team’s expertise in full, so leads can find the right service provider. A landing page about your specialists can describe their distinct experience and draw in motivated leads.
A Booking Page, for example, displays team profiles and allows visitors to book with a particular person. There’s no guarantee that a marketplace offers this level of detail; your leads might only see one set of available times and not know who they’re booking with. As time goes on and customers become loyal to specific team members, being able to reserve their time quickly is increasingly important.
Keep your profits
While online marketplaces offer a ready-made infrastructure with regular traffic, they often come with fees and commissions that impact your bottom line. Product-based marketplaces usually charge between 5-20%, but that balloons to 15-25% for services (Sharetribe). If this inflates your service fees, it could make your pricing less competitive and impact greater customer experience.
By operating your own e-commerce store, you avoid additional charges and retain control over your profit margins. Prices and discounts can be consistent online and offline as nobody else gets a cut of any sales.
Many website builders integrate with leading payment systems, like Square and Stripe, so you can also offer people their preferred way to pay and the option to pay online or in-person.
Use your voice
Approximately 77% of consumers make purchases from brands that align with their own values (Oberlo). Having your own e-commerce website empowers you to manage your branding fully – share your visual identity, messaging and story with your target audience.
This provides a competitive edge in an ever-evolving digital landscape. From your website and social media, to your booking system and email marketing, every communication channel should put your brand first.
A marketplace typically minimizes individual brands to transactional encounters. They engage in cross-selling, even toward non-related products, to increase sales and strengthen their own brands. An e-commerce site gives you the space to develop your own brand image.
Their brand or your brand?
While online marketplaces have an established customer base, your brand has to compete directly with others to get bookings. Having your own e-commerce store allows you to develop your brand and set your own pricing structure. While it may seem daunting to start a website, there are countless tools to enhance customer experience and help your business get discovered.
Visit Setmore’s resources for more tips on building your brand.