When setting up an online business, many do not know exactly which type to choose. An online store or eCommerce is usually the norm. But also a marketplace. However, What differences exist between a marketplace and an eCommerce?
If you are making a decision about starting an online shopping business and you don't know which one to take, perhaps what we are going to tell you on this occasion will interest you a lot. Do you keep an eye on it?
What is an eCommerce
Let's start with what is most commonly known. We are talking about eCommerce and its definition is something that everyone can explain. It is a online store in which a company, brand, business... sells products or services (or both).
You can find many examples on the Internet because there are many stores of this type.
What is a marketplace
If you are already clear about what an eCommerce is, now we are going to talk to you about a marketplace. It is a online platform in which various companies, brands or businesses can sell their products or services.
The clearest example for you to understand is Amazon. This is open to other sellers who can advertise their products in the store so that buyers can find and purchase them. In exchange, Amazon takes a percentage of the sale and also monthly fees for being there.
Other examples could be Miravia, Temu or Aliexpress.
Differences between a marketplace and an eCommerce
Now that you already have the concepts, and that you can see that we are not talking directly about the same thing, there are many differences between a marketplace and an eCommerce. Here we present several of them:
Extra payments
As we have told you before, being in a marketplace means having to do a series of payments to the platform where you are going to stay. This will depend on each platform and what rules they establish, but what is clear is that, whether you sell or not, you will have a fixed monthly fee simply for being part of its sellers.
To give you an idea. On Amazon, for example, sellers have a fixed fee and then have to pay a commission for each sale they make. If they have had no sales in a month then they do not pay that, but they do pay the fixed fee.
less profit
Related to the above, In a marketplace there is a lower profit when selling. And this is because there is a sales commission.
In the case of an eCommerce there is no such commission. To start, the website is yours, so you don't have to pay any fee to be there. Nor for the sale of the products, so 100% of the sale is yours.
more visibility
Marketplace by Nick Youngson CC BY-SA 3.0 Pix4free
One of the benefits of a marketplace over an eCommerce is visibility. When you are part of a platform like this you know that your products can be more visible than just in your eCommerce, unless you are well known and well established.
In general, a marketplace allows you to reach a greater number of potential customers. It will depend on the pricing policy you have and the experiences of the users to know if they will opt for you or not.
For its part, in an eCommerce you have to fight with positioning, with SEO and with Google to be on the first pages of the search engine and thus have a greater opportunity to sell to customers.
More competition
Although one of the differences between a marketplace and an eCommerce is competition, the truth is that this occurs in both cases.
In a marketplace You will not be alone as a seller. Just as you dare to enter as a seller, your competition does too. And that means that you fight against them to stand out, sometimes lowering prices to be the first option of buyers (but thereby achieving minimal profits).
Something similar happens in an eCommerce. You are not alone, there will be many other online stores that sell the same thing and you have to differentiate yourself to get customers to choose you. This may be due to cheaper prices, attention, etc.
Greater investment in an eCommerce
Have you ever stopped to look for a seller on Amazon, for example? It may be the case that it has a website, you can even buy the product there. But the opposite also happens, that it does not have a website. And it is totally understandable.
La The investment that must be made to have an eCommerce is not cheap. For one well established and with potential It is said that you have to dedicate at least 30.000 euros (not only the construction of the website, but also the advertising tasks, positioning...), and to that we will have to add the stock that you must have.
For this reason, many prefer to directly bet on the marketplace because they are not starting from scratch. They don't worry about the platform and focus on trying to offer a quality service within a broad market to stand out from their competition.
Easier shipping
Here we must explain a little. And, being in a marketplace, it may be the case that you choose to have the platform itself manage the shipping of the product they buy from you. In exchange, they get a higher commission. But it takes away the work of having to prepare the shipment, send it and then have problems with it.
In the case of an eCommerce, shipping is directly your responsibility., unless you work with dropshopping. That is, you have to package it, take it to the courier office (or have it picked up) and make sure that the customer receives it and that nothing happens to the package along the way.
As you can see, there are many differences between a marketplace and an eCommerce. And the decision between one and the other is not easy. Both options can coexist, of course, since they are two ways to give visibility to your business and reach more people. But they are not always used. Which one would you choose?