Marketplaces vs Own Ecommerce: Benefits and Disadvantages
Benefits of selling on marketplaces vs. selling only in your eCommerce
We talked about the benefits of selling in marketplaces and in your eCommerce, which are not few, although there are still people who still see them as incompatible.
Whether we like it more or less, the truth is that the reality of customers is multichannel, so we should not turn our backs on their habits. If we do, we will be losing opportunities… and nobody is interested in that.
Marketplaces and eCommerces working together
I think that, strategically, it is interesting to stop seeing both channels as watertight compartments and put them at the service of the business. To do this, we have to exploit the synergies we can create.
The most important thing is to understand what each channel can contribute differentially, for which audience it is more interesting and what the final objective is.
Let’s get down to business.
#1 – More acquisition benefits
Above all, what a Marketplace represents is reach. Amazon, AliExpress… have a huge amount of traffic every day, so much that it is difficult to find an eCommerce of any independent brand that can be close to their numbers.
It is true that the competition is huge, but it is also true that you can optimize your listing and your product pages to be more visible in internal search engines. Indeed: it is possible to do SEO on marketplaces.
#2 – Qualified traffic
Moreover, unlike generic search engines or social networks, this is traffic with a defined and clear purchase intent. It is what we call transactional traffic rather than informational. Therefore, it will always be closer to conversion.
It is not that it is easier to sell on marketplaces than in an eCommerce, but it is true that our online store will receive more visits in discovery and consideration phases. Potential customers who, in reality, are further away from closing the conversion.
#3 – Specific or niche traffic
It is clear that Amazon is huge (let alone AliExpress), selling hundreds of thousands of products from hundreds of categories and subcategories. I agree that their horizontality is the opposite of niche.
Surely most people looking for very specific products, do not go to Amazon, but there are many more marketplaces and some of them with a very specific content, are the so-called vertical marketplaces.
I can give you some examples such as Thomann that sells musical instruments, Tienda Animal that sells pet products or Sprinter within the segment for sports appareal.
You just have to look for a platform that is relevant to your target audience. You’ll get fewer impressions, but more targeted.
#4 – By their advertising platforms
Just when Google seems to be slipping a bit in terms of advertising revenue, it coincides with Amazon increasing its advertising revenue.
With all that has been said so far, it makes sense to see a relationship between both aspects. People who want to buy, go directly to marketplaces because they understand that they will find the products directly. For the advertiser this means avoiding paying for clicks that are not so efficient.
#5 – Because marketplaces can be a way to build loyalty
Here it is necessary to make some important points. Marketplaces are closed environments, in a certain sense, even opaque for the customer. The person who
buying on Amazon or AliExpress is not always aware that he or she is buying from a third party.
Logically, this is not the most interesting thing, because for sellers who have an online store, it is much more convenient for us that purchases are made in our eCommerce. Basically because it is where we have better margins, we control the customer service strategy, the logistics, we can act on the average ticket… and where it is easier for us to build customer loyalty.
I’m not saying that it will be an easy task, but the brand that manages to derive those Marketplace purchases to second and subsequent purchases in its store will be managing to use this platform in a hybrid way between attraction and conversion.
Things to keep in mind in this strategy
The positive side is very attractive, but it is also worth bearing in mind some negative aspects. Most of all, to avoid it turning against us at some point.
Mainly you should:
– Adequately balance your income. If you depend excessively on marketplaces, an incident, an aggressive competitor or a change of policies can jeopardize the viability of the business.
– Assume a certain loss of control: we don’t like this too much, but when you sell on marketplaces and eCommerce simultaneously, you will see the difference between setting your own criteria, your own customer service, after-sales service… and having to adapt to those of a third party. Don’t get frustrated, just adapt to it.
– Be consistent with prices and promotions. If you get caught up in the frenzy and lower your margins to be more competitive, be aware that this can also affect your own store’s sales. Customers compare and won’t hesitate to buy the same product at a lower price.
But don’t let this final point discourage you, if you want to explore the possibility of selling on marketplaces and your online store, we encourage you to do so; it can help you grow your business.