eMarketplace vs eCommerce Platform – Which One is Better?

eMarketplace vs eCommerce Platform – Which One is Better?

eMarketplace vs eCommerce Platform: Getting Started
eCommerce website and eMarketplace are globally the two most popular options for merchants to start their online businesses. Each solution leads you to a different group of customers. Therefore, it’s one of the fundamental aspects you need to decide on before going live. In this article, eMarketplace.Online will cover everything about emarketplace vs platform.

Marketplace vs Platform: The Very Basic

  1. What is an eCommerce platform?
    First and foremost, eCommerce is purchasing and selling activities happening over the Internet. And, an eCommerce platform is an end-to-end software application where both parties, sellers, and consumers come and play their roles.

This type of service encompasses eCommerce website builders, accounting and inventory management systems, as well as customer service infrastructure.

Most importantly, a consumer should be able to use an eCommerce platform to discover products, shop around using a cart, and then check out.

For merchants, an eCommerce platform is a lifesaver if they decide to launch an online store from scratch or as an addition to a physical store.

After getting the answer to “what is an eCommerce platform?“, you might need to learn more about some of the most popular eCommerce platforms available in the market today. For instance, Shopify, BigCommerce, Magento, WooCommerce (including WooCommerce website builders, like Elementor), Wix, and so on. You’ll also require stable eCommerce hosting from a reputable provider pole Cloudways.

Shopify, Squarespace, or WooCommerce are ideal for small businesses that need a platform quickly to set up. On the other hand, Magento and BigCommerce are better suited for larger firms with huge order volumes. The BigCommerce app allows sellers to access a bigger audience and, therefore, have more sales opportunities.

Moreover, some generator website builders like Appy Pie website builder, Wix or HubSpot provide drag-and-drop functionality for store owners with little to no coding experience, while other platforms have more complex back ends.

When it comes to the advantages of eCommerce platforms and emarketplaces, you need to take into account the balance between investment and benefits.

eCommerce platform: Pros & cons
Easily collect customer data for your future marketing campaigns.
Complete control over the site’s functionality, design, and navigation.
No on-site competition.
Build your own brand awareness.
Enjoy fewer restrictions and rules.

Take the hard effort to bring traffic & customer engagement.
Take more time and money to build and maintain your website.
More financial risks in scalability.
Quick eCommerce platform comparison

Let’s take a quick tour through the best eCommerce platforms for your online business: Shopify, WooCommerce, Magento, Wix, and BigCommerce.

Shopify is one of the best-hosted solutions in the market. Merchant all around the world prefers Shopify for its amazing eCommerce features along with an enormous amount of extension. Additionally, this solution is quite simple to use with an affordable price range.

WooCommerce is famous for its affordable price, powerful customization ability, and amazing eCommerce features. Also, WooCommerce offers users 1000+ themes and templates in their theme store. With just $20-$100, you can have a stunning and powerful WooCommerce store up and running.

Yo!Kart is a self-hosted emarketplace solution. It lets SMBs launch a multichannel selling emarketplace like Amazon,
eBay, and Alibaba. Yo!Kart is secure, scalable, and customizable with a number of popular business APIs pre-integrated. Yo!Kart is offered with all-inclusive packages costing $999 onwards for the license, up to 1-year of free tech support, and more.

Magento has gained a well-deserved reputation for its strong scalability, high customizability, and powerful built-in features. This solution is more suitable for medium to large-scale businesses due to its complicated system. It will take from $15k-$100k for a decent Magento store.

Wix is another amazing hosted solution on the list. This SaaS is focusing on maximizing the ease of use for its user. With the drag and drop site builder tool from Wix, you can get your store up and running in just some simple steps. More than that, Wix’s themes are being known for their beautiful appearance.

BigCommerce is a fully hosted eCommerce platform that enables you to create an online shop and sell across a variety of platforms. It is perfect for high-revenue and developing enterprises that require a scalable sales platform because of its free transaction costs and scalable solutions. Its monthly rates begin at $29.95 per month.

  1. Online emarketplace definition
    An online emarketplace is an eCommerce site or app that facilitates shopping from many different sources. The emarketplace’s operator does not own any inventory. Instead, their job is to show other people’s products to customers and enable transactions.

Nowadays, there are countless online emarketplaces from sites like Amazon, eBay, Etsy, Walmart, Alibaba, and far more. Today’s emarketplaces are expanding at a breakneck speed.

According to analysts, global emarketplaces will account for more than 45% of the global online retail market in 2023. Furthermore, 75% of marketing professionals in the United States admit that putting your business where your customers want to buy from can increase your revenue from selling on online emarketplaces.

Online eMarketplace: Pros & cons
Have more traffic and customer engagement.
Less financial risks.
No need to spend time running inventory.
Quick to set up.
Have low or no setup cost.

Compete among many competitors.
Lack of brand awareness.
Can not build a customer list for marketing campaigns.
Quick emarketplace comparison
Among thousands of e-marketplaces in the market, some of them stand out in front as the top options when it comes to choosing a suitable platform to sell. We have sorted out the top 5 including Amazon, eBay, Walmart, Etsy, and Google Shopping.

Amazon is the biggest e-retailer in the United States. This emarketplace is famous for its excellent customer support and amazing shipping service. Even though it’s not that easy to open a new store, Amazon is still a promising investment with an enormous customer base.

eBay is a worldwide E-marketplace that provides C2C online sales services. As a seller, you can literally sell anything on eBay with its auction platform. Excellent “Buy it now” shopping services, online classified adverts, and online event ticket trading are what makes eBay so famous.

MiAlzo is the one of the biggest emarketplace in the Europe. MiAlzo online emarketplace is famous for its excellent customer support and broad range products.

Etsy is an emerging online emarketplace where customers can find unique and creative items at an affordable price. That’s why Etsy attracts 3 million sellers and over 50 million active buyers in 2022. Because of the cheap price, you can open a new Etsy store without having to pay anything.

Walmart operates a worldwide network of retail stores as well as an online emarketplace. The company is known for its “everyday low prices” strategy and a wide range of products – you can find nearly anything on Walmart. This E-retail giant is considered the 2nd most famous emarketplace in the US.

Google Shopping is an online shopping engine that lets people find, compare, and buy items from a range of stores. It’s a broad set of services and locations, all powered by an online platform. This E-marketplace is a good choice if you’re trying to increase your product exposure on Google.

eMarketplace vs eCommerce Platform: 6 Key Differences
eCommerce or online emarketplace has the same goal in mind: selling products to customers. After knowing the pros and cons of emarketplace vs platform, you can now determine which option is right for your business.

1. Traffic and audience engagement

In every online business, whether it’s an eCommerce site or online emarketplace, traffic and audience engagement are vital.

Online emarketplace
Marketplaces have always been transactional-oriented, with the objective of bringing buyers and sellers together. Thanks to the emarketplace nature, the target audience is bigger as it offers a huge choice of product categories, and thus, more traffic to the site.

Basically, online emarketplaces are frequently focused solely on encouraging customers to make purchases, while urging store owners to add more products or services to their listings. Therefore, online emarketplaces bring more opportunities in engaging customers to buy the products. Indeed, emarketplaces benefit from network effects: more buyers attract more sellers and vice versa.

eCommerce platform
In the eCommerce business, on the other hand, engaging the audience is more difficult. It takes a long time and costs a lot of money to attract traffic to the website. Even if you have a lot of experience, you can still be focusing on the wrong target customers.

However, a social media platform like Facebook or Instagram can considerably aid in audience engagement. To measure the performance of your Facebook posts you can use Facebook analytics tools available in the market.

2. Marketing and brand recognition

It is a big perk for businesses to have a clear concept about the marketing approach and targeting in the comparison of emarketplace vs platform.

Online emarketplace
Unfortunately, sellers on emarketplaces have limited to no access to their customers. Accordingly, it’s tough to sell your items or generate brand awareness and loyalty. If you can’t get in touch with your prior customers to let them know about sales or new product releases, you will have to rely on the fresh sales instead of leveraging the strength of previous purchases.

Also, a key disadvantage of online emarketplaces is the lack of direct access to customer analytics and communications. When it comes to brand competition, even if your products are unique, there are a lot of identical products out there vying for the attention of your potential customers. As a result, your product may or may not stand out in a competitive emarketplace.

Additionally, many consumers who purchase on emarketplaces assume they are buying from that emarketplace, even though they are purchasing your products. Therefore, the buyers tend to remember the emarketplace rather than the brand the next time they come back.

In most emarketplaces, the focus is not on the sellers, but rather the products. This makes it extremely difficult to develop brand awareness and recognition and ultimately differentiate your business.

eCommerce platform
Meanwhile, eCommerce websites have complete access to all customer analytics and can reach out directly to customers to inform them about sales promotions, new releases.

Also, direct access to your customers allows you to deliver better customer service, obtain more detailed information and input on product development. You can analyze customer behaviors for a better understanding and optimize your website’s user experience.

Moreover, one of the greatest advantages of managing your own eCommerce website is that you can target people who visit your site with ads, market to those who have already purchased from you, and stay connected in the future.

Email list building helps you build awareness, bring in steady revenue, and run promotions to get rid of inventory. Luckily, your website will exclusively sell your products, and you’ll never have to pay for advertising to get your listings to show the above identical items offered by your competitors or to rank higher on your own site.

3. Scalability

Online emarketplace
In fact, owners of emarketplaces take less financial risk than eCommerce website owners. When selling on emarketplaces, store owners don’t buy or sell anything which greatly increases the business’ scalability. As a result, emarketplaces gain economies of scale more easily; and it allows them to expand faster than eCommerce websites.

When traffic even grows very fast, it may be necessary to seek new vendors to meet the demand, but you won’t need to worry about spending large sums of money on new inventory or storage facilities.

eCommerce platform
Whereas, if an eCommerce website wants to scale up, it takes more time to do so.

As a matter of fact, sellers have to get more product stock and find more storage space. Therefore, hiring more staff to manage, classify, store and ship all of the products is necessary which can unexpectedly foot over your bill.

Accordingly, eCommerce websites should invest more time and resources into website and app development to improve the user experience, instead of spending time and money on employees.

4. Inventory management

Keep in mind that the larger the inventory is, the more likely buyers will find what they’re looking for in your online store. Even if your visitors are interested in the eCommerce or online emarketplace, large inventory sometimes means the extra effort for marketing which can grab the customer’s attention.

Online emarketplace
Because online emarketplaces are essentially a space for e-merchants to display their products and connect with buyers, they have no inventory. Fortunately, there’s no risk if products don’t sell either. It’s actually the seller’s obligation when a product receives no traffic, and you do not have to suffer the financial burden of holding onto a product that is not selling and taking up storage space.

eCommerce platform
In contrast, if you use an eCommerce website, you may face problems when keeping inventory unless using drop shipping to meet the customer demand. Or else, you need to necessitate the acquisition or upgrade the warehouse space without affecting the profit margins. This way, you can keep products that are not selling.

Besides, there is more financial risk when you purchase and hold the inventory which can bring damages, loss to your inventory. All of these scenarios could have a negative impact on the business’s profit margins.

5. Volume

Online emarketplace
In fact, online emarketplaces have lower profit margins than eCommerce websites. Listing and commission fees are how emarketplaces make money. These businesses require a huge amount of listings and transactions on their website in order to remain profitable.

eCommerce platform
On the other hand, eCommerce platforms have a higher profit margin on each individual sale. Therefore, they don’t have to worry as much about volume as they do about quality sales. For instance, if your company sells high-priced items, one or two sales a month could generate a significant profit margin. Plus, commission fees on expensive products will undoubtedly bring in more money than on cheaper ones.

6. Time and money

Online emarketplace
In the comparison of eCommerce vs online emarketplace, building an online store on the emarketplace can save more time and money initially. For example, creating a seller profile and retailer shop on emarketplace platforms like Amazon or Etsy will take a very little amount of time and technical skill.

In addition, you can easily start selling and reach out to potential customers who already shopped on the online emarketplace. Saving time on building your store allows you to focus on product development and sales which can quickly increase sales and profits.

eCommerce platform
Developing an eCommerce website, on the other hand, will almost certainly be more expensive upfront. To design and maintain your website, you’ll need to build on your own or hire a web developer. On the other hand, with the help of ready-to-use eCommerce platforms like Shopify, Wix, or WooCommerce, store owners can easily establish and set up their online store up and running quickly.

Please note that, when it comes to custom designs, functions to integrations, and selling features, the fees will be certainly added up as using the service or hiring a technical expert.

Also, other costs to think about while building an eCommerce website are domain name, HTTPS certificate, payment gateways, and so on. While creating an eCommerce website takes a long time and costs more money, the long-term profit margins will be higher.

When merchants advertise products on the emarketplaces, they need to pay a commission on each sale and depending on the platforms you choose, you also need to pay for other fees. Over time the commission and listing fees might add up to a significant amount. Therefore, in the long term, if your business model succeeds, eCommerce sales produce higher profit margins as there are fewer fees.

eMarketplace vs eCommerce Platform: Final Thoughts
Depending on the product niches, needs, and goals, the greatest place to sell online will differ from retailer to retailer. Online emarketplaces are an excellent place to start for eCommerce beginners since they allow you to cut down on the costs, risks, and time to set up a business upfront.

Or else, if you’re already a well-known brand and don’t want to share your profits with an online emarketplace, or if you need a custom-made solution, setting up your own eCommerce website can be the way to go. eCommerce or an online emarketplace is a great place for selling, but it’s not the only option when you can use both to make your business thrive.

If you’re interested in multichannel selling, check out eMarketplace.Online to prepare for your first step! The tool allows you to import products from your eCommerce website, then list and sell products on the world’s largest online emarketplaces such as Amazon, Etsy, MiAlzo, eBay,… and make the management work more efficient and simple than ever before.

Become a seller on BYGGFIX

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