It does not matter whether you are a startup, a smaller business, or even a well-established company; comprehending the core differences between models of online stores is important for your online store development.
In this blog, we will take a look at those differences so that you might have an easier time choosing one for your corporate objectives.
What is an E-Commerce Website?
An eCommerce website refers to a dedicated platform controlled by a business that sells its items or services and is, therefore, called a brand website. Such types of websites include Nike.com or Apple.com. Such sites are usually custom-developed by a website developer as well as used builders like Bootstrap, Shopify, Wix, and WooCommerce on WordPress or BigCommerce.
While a professional web designer focuses on making the website visually appealing and simple to navigate through, the E-Commerce Website Design & Development processes involve implementing shopping cart systems, ensuring secure payment collection, and inventory control, among a host of other functions.
What is an E-Commerce Marketplace?
An E-commerce marketplace is defined as a third-party platform on which several vendors or sellers can offer their products. These include places like Amazon, eBay, Etsy, as well as Noon and can best be described as virtual shopping malls where customers are able to explore and shop for products from different brands under one roof.
In case of online marketplaces, a parent company runs the whole business including managing the technical elements of an online marketplace, customers service channels, generating traffic, and in some cases even logistics, all under one hood.
Differences Between an E-Commerce Website and E-Commerce Marketplace
The table below summarizes some of the major differences between the two types of e-commerce businesses.
Ownership & Control
E-Commerce Website:
Having your very own business website means that you have total control over branding, layout, policies, pricing, customer interactions, and basically everything else. This level of control gives room for a firm to offer exceptional branding in e-commerce.
E-Commerce Marketplace:
These are operated on a platform controlled by a third party. Vendors onboarding the marketplace have to adhere to standards set by the marketplace, including rules, policies, socioeconomic structures, and fee outlines. There isn’t much room for customization.
Setup & Development
E-Commerce Website:
Online stores require set up from scratch or through store builders such as Shopify or WooCommerce. Hiring professional web designers aids in setting up custom e-commerce websites.
E-Commerce Marketplace:
Readily available for sellers, a marketplace only requires you to sign up and add products, and you are set to go.
Expenses, Investment, and Financing
E-Commerce Website:
Key expenditures consist of creating the website, purchasing a domain, hosting services, adding security, and additional marketing efforts. Recurring expenditures include maintenance costs. You avoid commissions per sale, though.
E-Commerce Marketplace:
Lower luxury asset upfront expenditures, but comes with a fee per sale along with subscriptions or listing commissions on a monthly basis. This is especially burdensome for sellers that sell in bulk.
Customer Data & Insights
E-Commerce Website:
Full customer, purchasing, and analytical data access are provided. This allows for effective personalization and automated emails for marketing and loyalty schemes, and strategic re-targeting.
E-Commerce Marketplace:
Only partial customer data access is available, if any. You do not own the customer’s relationship and, hence, are unable to leverage many marketing tactics.
Information can be an operative strategy. Businesses that seek deeper relationships with customers choose independent online store development.
Branding & Marketing
E-Commerce Website:
Freedom over branding includes domain name, email address, logo, and even customization of the interface and user experience. You will need a digital marketing plan in place which includes SEO, google and Facebook Ads, as well as content marketing for traffic.
E-Commerce Marketplace:
Branding is barebones. Your item may sit next to the competition. Nevertheless, there is already sufficient traffic and visibility on the marketplace, which can help new sellers gain rapid exposure.
Pricing Tactics and Market Competition
E-commerce Website:
Less direct competition on your site. You set the pricing strategy without competition-based pressure from rivals.
E-commerce Marketplace:
High competition. Consumers can immediately compare items available from multiple sellers. This leads to price wars.
Long-Term Strategy and Scope
E-commerce Website:
Growth- It is easier to scale as your business expands. You can add new features, new categories, and advanced new tools over time. Best for long-term business building.
E-commerce Marketplace:
Supports growth in audience reach but limits you with platform and structure along with their rules.
Final thoughts
Whether you are utilizing a website builder or collaborating with a web designer and developer, creating an e-commerce website independently provides complete control, branding, and value to the business in the long run. However, selling on an e-commerce marketplace is easier for customers to access without technical resources.
Many successful brands utilize a hybrid approach. They build their own store online for branding and customer loyalty, then leverage marketplaces for broader exposure and volume sales.
Investing in e-commerce website development is beneficial for those trying to grow an online business sustainably. It enables a unique design, personalized features, enhanced customer interaction, and so much more. This makes your digital store an asset you truly possess.
