Online marketplace or your own online shop: advantages and disadvantages of sales channels in e-commerce
Today, online trading and e-commerce are standard for companies in numerous industries. The type of offer or sales channels can differ significantly from each other. Whether the choice is based on your own online shop or a digital marketplace this depends, among other things, on your strategic orientation and your planned investment amount. Both options are associated with their specific advantages and risks. In some cases, you can also combine the strengths of the different channels.
Online marketplaces at a glance
The digital online marketplace offers you many opportunities with low entry barriers at the same time. Merchants can offer their goods and services online and find a complete infrastructure. For example, there are many factors from the server to the product pages immediately available and ready for use. On such a marketplace, you just have to set up a merchant account and store your own data and your own offer on the product pages.
After a manageable training period, you can generate your first sales by selling your own products. Online marketplaces are usually platforms of larger companies and have an appropriate range. This gives you the opportunity to address a comparatively large target group. In this way, it is above all possible to try out new products on a larger target audience. For most marketplaces, billing is done via a sales commission. Without a completed sale, there are mostly no other costs, apart from the basic fees for the use of the marketplace.
When it comes to choosing an online marketplace for your own offer, the following are Factors such as reach and target group as well as the costs and conditions. The most well-known marketplaces in Germany with the largest market shares are the auction house eBay and Amazon Marketplace. The latter offer is also known as a mail-order company due to the private labels offered. In addition, there is a large and growing range of alternatives. These range from general marketplaces for almost all products to specialized and industry-specific platforms. These include for example Zalando, OTTO, Real or Asos. As of 2020, Germany, Austria and Switzerland together already had more than 170 different online marketplaces. Etsy is becoming increasingly popular, especially handmade products and other creative products sell. So the perfect marketplace to share your results with the Mr Beam Laser Cutter sell.
Own online shop: how it works and providers at a glance
A specially created and managed online shop offers you the best possible independence and freedom of choice about the offer and performance. You can create an independent domain and have full control over the choice of all factors, from the service provider to the design of the web design. Thus, the appearance of your company as well as the market positioning is completely in your hands. The development of a digital corporate identity or an entrepreneurial personality in contrast to the competition is possible. Likewise, you have the opportunity to provide customer service in your own online shop, To design services and prices according to your own criteria. It is always advisable to focus on the expectations and needs of the customers and to generate trust in this way.
The own online shop allows higher profit margins compared to the marketplace, since both certain fixed costs in the form of fees and traffic-dependent commissions are eliminated. On the other hand, however, other cost items have to be weighed up, including hosting fees for the servers as well as costs for technical support, updates and the security of the online shop.
Although the operation of an own online shop is associated with significantly more effort than the use of a marketplace, the Entry barriers are getting easier thanks to sophisticated shop systems. Many shop vendors rely on modular modular systems and enable an intuitive shop structure.
A classic of a shop system is WordPress, which can be expanded into a powerful online shop with special shop additions. Thanks to the free WooCommerce plugin, the WordPress content management system is supplemented with the full functionality of an online store. Thanks to numerous other plug-ins and extensions, WordPress can also be extended with specific functions. Connections and interfaces to third-party providers (such as payment service providers) support the An additional offer. In addition, there are numerous pure shop software providers that are aimed at online retailers of various industries and sizes. Solutions such as Shopify, Shopware, OXID or Adobe Commerce (previously known as Magento) are just as popular and also offer a connection to various online marketplace offers.
Strengths and weaknesses of the sales channels
It is a question of deciding whether a your own online presence or an online marketplace if it is more worthwhile for your own goals, you should first weigh the advantages and disadvantages of the two alternatives.
Advantages of the digital marketplace
Especially young companies and start-ups or newcomers to the e-commerce business can benefit from benefit from established marketplace models. The business model of providers such as Amazon Marketplace or eBay is expanding for many reasons. Advantages of such offers can be found both for you as an entrepreneur and for your end customers. Customers like to use online marketplaces, as they can find a virtually endless range of offers here on just one platform. Many customers first search for the desired product on one of these marketplaces. Only if you do not find anything there, expand the search to the rest of the Internet, as well as regular search engines such as Google.
This customer behavior also results in added value, especially for dealers, in the Use of online marketplaces. A large tribe of potential customers is already present on the marketplace. In principle, you benefit from the already given reach of the online marketplace, while your own online shop must first of all make a lot of effort in order to appear high up in the search results. Furthermore, you can start the sale without a long start-up time.
The account is created for traders within a short time. Products can be added intuitively and partially automatically in just a few clicks. An attractive offer is quickly set up on one of the marketplaces. This is especially true for Interesting for new founders or niche providerswho have yet to test and slowly establish their product range. Retailers should also observe the GDPR conditions and General Terms and Conditions when using an online marketplace. However, this is associated with significantly less expertise and effort than when operating your own online shop.
Weaknesses of online marketplaces
The main disadvantage of using an online marketplace is the resulting dependence on the respective provider. There are uniform specifications on the part of the operators, which are allow only limited individualization. Branding your own products or highlighting unique selling propositions is therefore more difficult on an online marketplace.
Furthermore, the cost structures must be taken into account. Fixed costs such as monthly fees apply sales-related costs in the form of commissions. This has a negative impact on the possible profit margins.
In addition, the enormous competition must be taken into account. Hardly any provider who does not at least additionally operate his shop on one or more marketplaces. The clientele has many alternatives and can make direct comparisons, making it difficult to compete against competitors. High requirements of the operator factors such as customer service or order processing also affect the Sales price from.
Advantages and strengths of your own online shop
Your own online shop allows you to maximum freedom in the design and orientation of the product range. Anyone who, as an entrepreneur, has the necessary IT expertise or puts the design of their own online shop in professional hands can benefit from these opportunities. You can decide for yourself what the pricing looks like, how quickly you respond to inquiries or what service standards you offer. For sales on online marketplaces, on the other hand, the guidelines are set, while non-compliance threatens poor reviews or even a blocking of the account.
In the own online shop, the special price war of the dealers is also eliminated due to the immediate comparability within the marketplace. You can determine the pricing yourself and thus the Control profit margins to some extent. You can offer market-standard prices, but also justify higher prices with excellent quality or outstanding service, for example. On marketplaces, more expensive providers have a harder time, since they are usually not listed high up in the overviews. Therefore, retailers typically try to undercut each other in terms of price and customers predominantly choose the cheapest provider.
Weaknesses of your own online store
The hurdles to running your own online shop are high. It not only requires specialist knowledge and a higher budget, but also causes a high expenditure of time. Well-thought-out planning is required in advance. The required know-how is not always given to dealers, so that an agency for setting up the shop may also have to be taken into account when investing.
The time required continues to extend to the phase of establishing the shop. Your own online shop is typically operationally usable only after several weeks and even then cannot be found directly for potential customers. There is a need for thoughtful Search engine optimization and marketing measuresuntil your own online shop appears on the first page of search engine results.
Especially the measures in SEO are often underestimated at the beginning or not taken into account at all. In a few cases, this is not a problem if you have already gained some notoriety, e.g. on social media. Nevertheless, all conditions must be met in order to ensure long-term successfully building an online store. This starts with the clean layout of the shop from a technical point of view. Can my products even be found on Google? Many online shop solutions have already become very user-friendly. Nevertheless, you should educate yourself a little in this area in order to be able to generate new customers via Google. In this area, the time required can therefore be underestimated very quickly.
Short-term and immediate success: Online marketplace
As a starting point for initial sales and success, the digital marketplace is a optimal entry. You can gain initial experience or test a new product offer on an online marketplace. The technical infrastructure is already in place and the range is wide.
Long-term establishment of your own offer: online shop
Anyone who wants to establish their product range on the market in the long term relies on building their own shop. Which Individuality of the shop creates unique selling points and will appeal to the desired target group in the medium and long term with well-thought-out marketing. An adaptation of the appearance, the service and the prices to the wishes of your target group contributes to long-term customer loyalty.
Conclusion about the online marketplace or your own online shop
While an online marketplace offers an excellent option to enter e-commerce, your own online shop is the means of A choice for long-term establishment and customer loyalty. Modern sales strategies benefit from multiple channels, so a combination of both options proves to be beneficial for most retailers. With modern shop solutions, it is possible to set up your own online shop with the simultaneous connection of one or more online marketplaces.
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