Should You Sell on Marketplaces or Run Your Own Store?

| Updated on April 2, 2024

The shift to digital technology has forced many brands to adapt to an unfamiliar landscape that, to the unfamiliar, can be both daunting and overwhelming. Those looking into the power of online selling as a lucrative opportunity will face an important question: is it better to sell on marketplaces or create your own shop?

Both do have their pros and cons, and it’s essential to take a look at them first before you decide. Your choice will determine the course of your business and its eventual success or failure. Let’s delve deep into this predicament to break down the challenges and advantages to help you decide which way to go.

A Closer Look at Marketplaces

The evolution of online technology gave birth to marketplaces, which bring sellers and buyers together. As a seller, this is where you can connect with your prospects without having to do everything on your own. Platforms like Facebook Marketplace, Amazon, Craigslist, and eBay made this possible. Many beginner entrepreneurs often consider marketplaces a source of additional revenue while reaching an international market.

Creative Fabrica is another platform where you can sell your products. They have a platform where creators can sell their digital products. These products include a wide range of items such as stockphotos, fonts, graphics, illustrations, and crafts for those engaged in DIY and crafting.

This online selling tactic allows you to place your business where your customers are. Many potential buyers flock to marketplaces for their shopping needs because they’re easy and convenient. From excellent customer experience to fast transactions, marketplaces are indispensable in today’s increasingly connected world.

A Closer Look at Online Shops

On the other hand, businesses that want more freedom would wish to set up their own shops. Some prefer to set up their own website and run their shop from there. Others who prefer convenience will go for e-commerce platforms. Digital retail is considered the future of commerce. The present market conditions make it easier and more favorable for independent sellers to set up their own online shops.

However, one should understand the challenges of setting up your own online shop. You will need to have a solid business plan in place, including choosing a niche that will play to your strength. You also need to do various other things, from selecting your domain name to picking your e-commerce platform. You’re also responsible for designing the look of your store, adding products to your shop, setting up shipping, and marketing your offering.

The Pros and the Cons: Marketplaces vs. Running Your Own Store

Now we come to the most crucial aspect that begs the question, “Which will work best for you: selling in a marketplace or running your own store?” To weigh your options, take a look at both pros and cons based on several essential points.

Solidifying Your Brand Identity

The marketplace is not a very good choice when you want to establish a solid brand identity. There is little to no personal branding in marketplaces. These platforms are where customers simply scroll through the products, looking for items that meet their needs based on price and characteristics alone. The brand’s name is secondary; it’s the marketplace they trust.

Meanwhile, setting up your own shop gives you the power to build and solidify your brand. You can start from the bottom—choosing your niche, picking a name, deciding on your brand colors, and more. These elements allow your customers to recognize you everywhere. Their purchase decisions are often heavily influenced by your brand name and recognition. This leads you to build a stronger relationship with them based on trust, allowing you to build your database and nurture your customers throughout their buying journey.

Generating Traffic and Sales

The saturation of many websites and shops online means fierce competition. It’s hard to keep up with established brands with hundreds of thousands of followers. In this case, a marketplace has an edge. Popular marketplaces present you with ready-made traffic and greater exposure to a broader range of audiences.

Case in point, the daily traffic of shops like Amazon reaches billions. You can capitalize on this as you get to position your brand in front of a higher volume of customers.

If you have your own shop, you might need to work extra hard to establish your online presence and grow your organic traffic through digital marketing, which will require a significant amount of money.

Providing Customer Experience

In your online shop, you can get direct contact with your customers and harness the power of personalization to provide a better customer experience. It’s easier to direct your prospects into a marketing funnel.

Suppose you’re running an ad on Google intending to drive traffic to your website. You can re-target visitors with ads when they perform specific actions on your site, including adding products to their cart and clicking on product links. You can also grab the opportunity to build your database and email list.

This allows you to know your customers better and be present at every touchpoint of the customer cycle.

Maintenance and Inventory

Maintenance and Inventory

Getting started with an online business means you have a limited workforce. Chances are, you’re going to take care of every aspect of your business, from sourcing products to marketing them. If you want an easier way to start a business without the hassle of running an inventory, then going for a marketplace is the best course.

In a marketplace, technical tasks like updating product inventories, security, bugs, and other essential considerations are taken care of by the site itself. You don’t need to pay extra for web development services either. Secure payment methods are already in place. Having a ready-made inventory system means you need not worry about shipping and inventory issues. You can simply take advantage of the massive supply chain network of the marketplace.

Full Control of Business Aspects

Marketplaces have a set of rules that sellers have to abide by. Breaking them might mean a ban that will effectively stop you from selling your products in a marketplace. For example, fake reviews can get you this punishment.

On the other hand, running your own online shop gives you complete control of all aspects of your business operation. You don’t have to fear algorithm changes and shifting rules.

Selling Fees and Other Expenses

As often the case, convenience comes at a cost. This is true when it comes to marketplaces.

While they may offer convenient operation and secure transactions, they can also take up the bulk of your profits. Popular marketplaces can charge somewhere between 10 to 20 percent in selling fees. Others can go more than that. Your earnings are solely your own after your initial operating expenses if you have your shop. While the initial investment can be higher, you can eventually make the most of it as your business grows.

Consider a Hybrid Approach

Choosing one of the two makes sense, but have you considered combining both methods and making it work? The hybrid approach can work wonders. It’s only a matter of allocating your time, money, and effort accordingly. This will give you a middle ground and a fallback plan if issues arise in one of the methods.

You may need the marketplaces to take advantage of ready-made traffic, but you can also grow your brand simultaneously with your online store.

Wrapping It Up

There is no black-and-white approach to online selling. What might work for some might not work for others. It’s only a matter of understanding your industry, audience, and value proposition and choosing a method that will give you better results. But knowing the pros and cons of selling in marketplaces and running your own store can help you make a more informed decision. Choose wisely.

Angela Tague

Tech Writer ( Contributor )

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