With the rise in popularity of marketplaces like Amazon.com and eBay.com, deciding to sell online can often be a complicated question. Should you build your own website and sell product through there or join a proven marketplace with millions of users? It may seem like an easy question to some and an extremely difficult one for others, but deciding which path to cross is the first step in making money online. Although both have their advantages and disadvantages we take a look inside how sellers should answer this question.

Your e-Commerce Store

In today’s era everyone wants a piece of the e-commerce market. With online sales booming and projected to reach historical heights, many people are looking to get a piece of the pie. With the introduction of CMS (Content Management System) websites like WordPress and Joomla, creating a website and e-commerce business is almost effortless with their easy-to-use functions, widgets, and plugins. Even finding products to sell has become easier with sites like Alibaba and Adoba where anyone can find manufacturers and wholesalers anywhere in the world.

Advantages

  • No listing/commission Fees: This is by far one of the biggest perks of selling goods on your own website. Sites like Amazon and eBay charge a fee for listing items and when sold, even tack on a commission fee. Often time, first time sellers are working with a limited amount of inventory and these fees chip into their profits. For beginner sellers this is no bueno.
  • No Price Wars: Marketplace selling is a battle zone. Because sites like Amazon.com reward the lowest price with their Buy Box, merchants are always looking to undercut prices to sell their items quicker. They use competitive software that monitors prices and automatically updates price listings to beat out competitors. Often time, sellers use out-of-date repricing software that drives listing prices lower and lower and lower, until sellers are pricing their items way below market value. Yes the item sold but you paid for it with your profits. With your own e-commerce business, you can price items accordingly to YOU.
  • Custom Storefront: Although Amazon is making waves with their Amazon webstore, it’s nothing like having your own platform. Amazon webstore offers individual sellers, small business, and large business the opportunity to showcase their storefront and products on their marketplace, but by Amazon’s rules. When you build your own storefront website you’re the king. You make the rules and you decide how to play.

Disadvantages

  • Customer base: Amazon.com and eBay.com are proven marketplaces. They receive millions upon millions of daily visitors and are incomparable. They have the audience everyone is looking for.  For beginner sellers this feat may seem intimidating, which it is. Driving traffic to your website is one of the most sought-out tools that everyone needs and with Amazon and eBay, the traffic is already there. One huge disadvantage of starting your own website is establishing the needed traffic to convert to sales. This is where marketplaces like Amazon and eBay win.
  • Advertising/Marketing: One of the main goals for Amazon and eBay is driving traffic to their marketplace. The more traffic they drive, the more sellers and buyers they accumulate. They spend hundreds of thousands of millions of dollars each year to do just that. For Joe Schmoe the sellers this is daunting. This type of advertising is only accomplished by big businesses because, frankly, they have the money.

 

Marketplace (Amazon/eBay)

In today’s world of electronic devices and growing technology, consumers are always looking for the best price with the most convenience, and marketplaces like Amazon.com and eBay.com make it extraordinarily easy. With an established customer base and millions of hours of advertising and marketing, these places are the hot spot for traffic. FYI-traffic is visitors, visitors are the people who visit these websites, and visitors turn into customers. If you’re trying to decide on whether to start your own e-commerce or sell on a marketplace, you must, repeat, must keep reading.

Advantages

  • Proven Market: Choosing to join a proven marketplace will not only increase your awareness but help generate traffic. They have an established audience that continually visits their website to make purchases. This is a BIG plus! The goal to starting an e-commerce is to not only drive traffic to your site, but create brand awareness. With marketplaces like Amazon and eBay, this traffic and awareness is already there. You don’t have to spend unlimited amounts of time creating content, marketing, and driving traffic.
  • Minimal Work: One of the best features Amazon offers is the opportunity to create your own storefront on their site. With Amazon webstore you can instantly build your site with functions like built-in hosting and a shopping cart. This convenience is extremely attractive. When building your own e-commerce business you must  pay for the domain, the hosting and depending on the CMS you’ve chosen, pay someone to add a shopping cart to it. All this is provided when you signup to sell on Amazon webstore. It’s probably one of the most appealing and convenient advantages to using Amazon. Work smarter not harder.

 

Disadvantages

  • Fees: Did we mention Amazon and eBay charge fees? Amazon and eBay are like that Uncle you have that always hit you up for money. Doesn’t matter what you’re selling they want a piece. The biggest drawbacks of using marketplaces like these are the fees. If you want to list an item you must pay a fee. If your item sells you must pay a fee. This cycle continues and all these fees cut into your profits and if your items aren’t correctly priced, you’ll be doing all this work for nothing.
  • Competitors: No matter what or where you sell, there will always be competition. Sure this sounds normal, but the competitors on marketplaces like Amazon and eBay are ferocious. Many of these sellers are seasoned pros who have been using these platforms to effectively sell before you even knew what Amazon.com was. The marketplace competition is fierce and unforgiving, so be prepared to hit the ground running.
  • Ratings/ Feedback: When you sell on Amazon and eBay, everyone gets to see your dirty laundry. They see how many orders you’ve fulfilled, what previous customers have said about your products and customer service, as well as a grading scale that determines what type of seller you are. Their rating scale showcases how many positive, neutral, and negative reviews you’ve had from all of your customers. Sure, this may be fine and dandy for experienced and professional sellers but for newbies, this sucks. Not only do you have to be picture perfect on every single order but many people won’t buy from you because, well, you’re new. Plus with Amazon, you can’t even qualify for the Buy Box unless you’ve fulfilled a certain amount of orders and become a pro merchant.

If you have more questions regarding selling online or on marketplaces email us at nick@amazongenius.com.