Marketplaces vs Ecommerce Platforms : Which is Best ?
Ecommerce Platforms & marketplaces are the two most popular options worldwide for merchants to start an online business. Both solutions provided a different customer base. It is the basic aspect you need to clarify before making yourself live. In this article, you will understand all about the ecommerce platform and marketplace. This piece of content will help you to identify which one you should choose for your business, ecommerce, or marketplaces.
What is an Ecommerce Platform?
An ecommerce platform is an end-to-end software that allows you to sell and purchase over the internet. This type of service includes ecommerce website building, accounting, inventory management systems, etc. Ecommerce marketplaces platforms are best suited to those who are just stepping into the business. It is like a helping hand for them because they are new and don’t have enough knowledge. Some of the ecommerce platforms: are Shopify, Magento, and woo commerce.
What is a Marketplace?
A marketplace is an online store where a variety of sellers list their goods. Customers can purchase goods from various sellers and pay for them all at once at the checkout. When a sale is made on the marketplace, three parties are involved: the purchaser, the vendor, and the marketplace supervisor. These marketplaces don’t have their own inventory, they just only show other products on their platforms. Some of the most commonly used marketplace are Amazon, Flipkart, Meesho, Walmart, eBay etc.
Difference between Ecommerce platform vs Marketplace
1. Traffic and Audience Engagement
Traffic and audience engagement is very important when we talk about business. Audience engagement and traffic quality and quantity is different for both the platforms.
Marketplace: The goal of marketplaces has always been to connect buyers and sellers through transactions. Due to the marketplace’s characteristics, which provide a huge selection of product categories and higher website traffic, the primary audience is larger.
In essence, online marketplaces frequently place their sole emphasis on captivating customers to buy while pressuring store owners to expand their offerings. Online marketplaces provide more opportunities for luring customers to make product purchases as a result. Marketplaces do indeed benefit from network effects: as there are more buyers, there are also more sellers, and vice versa.
Ecommerce Platform: In an ecommerce platform engaging customers is difficult. It costs a lot of money and time to rank your websites.
2. Brand Recognition
Having a clear understanding of the marketing strategy and targeting when comparing marketplace and ecommerce platform is a big benefit for businesses.
Marketplace: Unfortunately, marketplace vendors have little to no access to their buyers. As a result, it’s challenging to sell your products or build brand recognition and loyalty. Biggest disadvantage for the marketplace is that they lack direct access and communication with customers and analytics.Although if your product lines are distinctive, there are many other identical products competing for the recognition of your targeted users in the brand competition. Your item may or may not be capable of standing out in a crowded market as a result.
Additionally, even though they are buying your products, many customers who make purchases on marketplaces mistakenly believe they are doing so from that marketplace. As a result, when customers return again, they are more likely to recall the marketplace than the brand.
Ecommerce Platform: Ecommerce websites, meanwhile, have full access to all customer insights and can communicate directly with customers to let them know about sales promotions and new products.Additionally, having direct contact with your customers enables you to provide superior customer service, gather more thorough data, and solicit feedback on product development. You can improve your understanding of customer behavior by analyzing their online behavior.
One of the biggest benefits of running your own ecommerce platform is the ability to advertise to visitors, market to people who have already made purchases from you, and maintain contact with them in the future.
3. Inventory Management
The larger the inventory, the more people find what they like. Sometimes lage inventory means that you have put extra efforts in marketing which grabs the customers attention.
Marketplace: Online marketplaces don’t have inventory because they serve as a venue for e-merchants to advertise their goods and interact with customers.
Ecommerce Platform: Contrarily, if you utilize an ecommerce platform, you might run into issues managing inventory unless you use drop shipping to satisfy customer demand. Or you need to update the inventory at regular intervals without affecting profit margins.
4. Scalability
Marketplace: In actuality, marketplace owners run a lower risk of losing money than ecommerce owners. Store owners don’t purchase or trade anything when they sell on marketplaces, greatly enhancing the business’ ability to scale. Marketplaces can grow faster than ecommerce as a result of their easier ability to achieve economies of scale.
You won’t have to worry about spending a lot of cash on new merchandise or storage facilities, even when demand increases very quickly and it becomes necessary to find new vendors to meet it.
Ecommerce Platforms: In contrast, it takes more time for an eCommerce website to scale up.
In fact, sellers need to find more storage capacity and acquire more product inventory. In order to manage, classify, store, and ship all of the products, more staff must be hired, which could unexpectedly increase your expenses.
Conclusion
Both markets and e-commerce platforms have advantages. Your expectations, objectives, and level of expertise will determine which of the two you choose. You may also decide on a hybrid business strategy in which you simultaneously list your goods on well-known marketplaces and sell them via your own online store.
If all this seems too overwhelming, a straightforward and efficient solution is to find a reputable digital marketing firm. Professional marketers can assist you with every aspect of expanding your business online, from picking the best marketplace for your goods to creating an incredible ecommerce store and its marketing.