Monday 15 February, 2016

Should You Sell through Online Marketplaces?

Online marketplaces have been around a long time, offering ecommerce stores a way to plug in to a ready made audience and platform as long as they’re willing to abide by a few guidelines. Marketplaces like Amazon and EBay are hugely popular and some pundits say that this trend will only increase in the future. If you’re in the ecommerce business and you haven’t considered online marketplaces yet, it’s something to think about.

The Pros and Cons

The main advantage of selling through online marketplaces is that you have a ready made audience and platform. It’s easy to set up your account and list your products. Sites like Amazon are popular and already have a huge customer base. This means that you don’t have to worry about SEO or promoting a website (although it helps to drive some traffic there).

In addition, major marketplaces offer a number of options for ecommerce businesses. You can sell to customers in many countries throughout the world and they offer many payment options. As marketplaces grow and become more popular, these options are increasing.

The disadvantages are that the marketplace takes a cut and you have to abide by its rules and regulations. These usually aren’t terribly restrictive but get on any ecommerce forum and you’ll see many sellers complaining about marketplace policies. Marketplaces may dictate what you can sell, where you can sell it and how you have to take payments, all of which can be a huge pain in the rear.

Marketplaces also take a cut of your product price. Usually, this is quite small, but it still can be significant. When you sell through your own ecommerce site, you get everything. Although the cut may be small, this may make low-ticket items not worth selling at all through a marketplace.

One more advantage of running your own ecommerce store is the branding. You get your own domain name, which helps with branding and can even help you sell more through the marketplace.

What Is Right for You?

Both online marketplaces and selling through your own ecommerce site have their advantages. Running your own site takes a great deal more work but the potential rewards are higher. Marketplaces offer a place to plug in your products and start selling today, and they appear to be gaining in popularity.

For many ecommerce businesses, the best option is both. You can create an ecommerce site and work on building its brand and traffic, while in the meantime selling through an online marketplace. Since online marketplaces bring sales pretty much immediately, you can use that income to fund your website, which involves many costs and much time.

You can leverage your marketplace profile and website to send traffic back and forth, maximizing both. This is a strategy many ecommerce businesses employ and it works well for them.

Bob Steele

Bob Steele

Bob Steele is an entrepreneur, software developer, marketer, and author living in the Denver metropolitan area. He’s an avid outdoorsman who loves skiing, hiking, fishing, boating, and just plain having fun. His interests include games, space, technology, physics, cooking (well eating actually), economics, business, internationalism, and team sports. With over thirty years of professional consulting experience, Bob has been exposed to many diverse business models and has gained a sensible approach to life. Bob’s company, WaveCentric is focused on commerce, marketing, and entertainment related products.

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