Marketplace vs. Ecommerce Platform: Which Is the Best?

Let’s face it: online shopping has taken over. With a 24/7 storefront, user-friendly interface, and smooth checkout process, customers can now shop from the comfort of their homes. Entrepreneurial spirits will know that diving into the world of ecommerce offers plenty of  possibilities and a prospect for growth. But for up-and-coming business owners, there is a lot to consider: profit margins, target audience, competitor research, and, equally importantly—ecommerce platform selection.

Should you join a bustling virtual marketplace? Or rather build your web store? When choosing the right platform to kickstart your new business, there are a few key principles to consider. This marketplace vs ecommerce platform guide will highlight the main differences, ultimately helping you understand which business models best fit your new brand, budget, and vision.

What is an online marketplace?

An online marketplace is a virtual platform where third-party sellers supply product and service information. That means potential customers browse a selection of products or services different sellers have listed. The marketplace operator serves as a mediator between the customer and retailer, facilitating the transaction process.

Some of the top online marketplaces in the world include Amazon, eBay, Etsy, and Alibaba. While operating on the same principle, these websites specialize in distinct areas, catering to specific target audiences and customer needs.

Out of the most visited marketplaces globally, Amazon holds the top position. In 2022, this marketplace powerhouse was responsible for 37.6 percent of all retail ecommerce sales in the US. An impressive number, which is expected to  rise by another 11.7 % by 2024. This mega-success has put many small businesses on the map, presenting both opportunities and challenges.

Let’s go over the advantages and disadvantages of using an online marketplace.

Valuable read: Top 10 Best Online Marketplaces for Print-on-Demand Sellers

Source: webretailer.com

Marketplace benefits

Increased visibility

When selling on an online marketplace, your products and services will be displayed to an already existing customer base. As a new business owner, you get to expand your audience and reachpenetrate new markets relatively trouble-free. Unlike other sales channels, selling on a marketplace can help drive traffic to your product listings without breaking the bank on marketing.

Established trust 

To see your business prosper, customers’ trust is everything. Over half of online shoppers trust purchases through familiar marketplaces despite not knowing the specific retailer. The platform increases the seller’s overall credibility, fostering more returning customers.

Simplified logistics and fulfillment

Online marketplaces can relieve the burden of order fulfillment and logistics via multiple features and services. Many marketplaces offer fulfillment services and warehousing in the marketplace’s facilities. Marketplace operators may also handle tasks like generating shipping labels, providing order tracking, and processing payments and returns.

Low start-up cost

Setting up a new business can get pricey. The marketplace can cushion these expenses, offering a comprehensible set-up, ready-made features, a fulfillment system, SEO, and even marketing strategies as part of your subscription fee.

Source: Macrovector

Marketplace drawbacks

A lot of competitors

The most visited marketplaces are teeming with sellers. Some marketplaces even offer their own products alongside third-party retailers. In an environment like this, competition can be tough.

Limited data access

Sellers also get limited access to customer data, which may damage the relationship with your customer, not allowing room for one-on-one interaction or personalized customer support.

Limited information about your customers also complicates targeted marketing campaigns and monitoring analytics.

High commission fees

Selling products and services in an online marketplace comes at a cost—sellers have to pay commission fees. The fees vary per platform, but they’re usually around 20—40%.

Lack of brand visibility

When potential customers scroll through an online marketplace, they engage with products, not brands. Online marketplaces emphasize the products instead of the businesses that sell them, making it harder to build your brand image and convey authentic messaging.

Printful online marketplace integrations

Want to sell custom t-shirts online without risking overstock? Printful integrates with some of the largest and internationally recognized marketplaces, including Amazon, eBay, and Etsy. To start selling on a marketplace with a Printful integration, you need to set up a Printful account (it’s free!). Then, you need to create a seller’s account on the marketplace of your choice and connect both accounts. 

With some marketplaces like Amazon, getting set up can get tedious. You’re in for long approval times, extensive verification processes, and complex policies and guidelines. But once that’s sorted, it’s pretty smooth sailing from there: when a customer makes a purchase, Printful will take care of order fulfillment and shipping.

Here is a more detailed guide on how to sell on marketplaces with a Printful integration. 

Read also: How to Sell on Amazon with Printful’s Integration

What are ecommerce platforms?

An ecommerce platform is a software application that allows buying and selling products and services online. Ecommerce platforms typically offer a customizable digital storefront where merchants can display their products, manage inventory, process payments, and handle different business operations. Essentially, it’s your independent online store hosted and supported by a platform operator.

Starting your ecommerce website can be exciting. Ecommerce platforms offer flexibility and customization for your new online store’s appearance, features, and user experience. With an ecommerce business, it’s important to consider which features would suit your online store and your customers’ needs.

Going the ecommerce platform route is especially appealing, given that ecommerce businesses continue to grow rapidly and are expected to skyrocket to a market share of $8.1 trillion.

When exploring ecommerce platforms, here are some crucial factors to consider.

Read also: Best Ecommerce Platforms: Top 10 Contenders

Ecommerce platform benefits

Control over your store

You’re in charge of your website, from its design, layout, features, and functions to branding, pricing, and promotion. With an ecommerce platform, your brand’s identity and presentation can shine.

Access to customer data

In your online store, you can get more direct access to customer data. Your customer’s contact information, purchase history, and account can enhance the shopping experience and guide your marketing strategy.

Niche down your business

With an ecommerce platform, merchants can set the tone, specialization, and unique value of their business. Niche product offerings empower businesses to carve out a distinct identity for their brand.

Valuable analytics insights

Tracking your website’s analytics is vital. Ecommerce platforms have built-in analytics tools that allow you to monitor traffic sources, product performance, visitor metrics, and customer behavior.

Source: WP Manage Ninja

Ecommerce platform drawbacks

Higher upfront costs

The costs of setting up and streamlining your own ecommerce website can get pretty high. Ecommerce platform subscription fees are relatively inexpensive, but the additional costs of setting up, designing, hosting, and professionally customizing a whole website tend to pile up.

Data security risks

Data breaches on ecommerce sites are not uncommon, unfortunately. These sites are especially susceptible to cyberhackers because they store large amounts of personal and financial data.

Marketing costs

To attract potential customers amid a sea of online stores, ecommerce business owners might have to invest more in developing effective marketing strategies.

Printful ecommerce platform integrations

Selling online doesn’t require significant investments or established capital. Printful simplifies starting your business, giving you more time to promote trending products to the right audience. Printful integrates with various ecommerce platforms such as Shopify, WooCommerce, Wix, Squarespace, and many more. The process and difficulty of setting up your ecommerce store varies per platform.

Ecommerce platforms allow you to push products from Printful and sync them with your Printful account, automating and streamlining the fulfillment process. 

Source: Sydle

With a standalone ecommerce store, you can design and tailor your website and product listings to your vision. To capitalize on this freedom, plunge into the latest print-on-demand niches to grow your brand. 

Unsure where to start? Delve into our curated selection of bestselling print-on-demand products to find inspiration and discover what resonates with your target audience.

Online marketplace vs ecommerce platform: overview

To pick the right option for your business, it’s important to understand which one—an online marketplace or an ecommerce platform—excels in key areas.

Audience size and brand visibility: Marketplace

Marketplaces garner thousands of clicks every second. With an audience like that, your product listings will likely attract more customers.

Branding and customer experience: Ecommerce platform

Ecommerce platforms typically allow more room for a personalized customer experience.

Ownership and control: Ecommerce platform

Although dependent on the platform provider, ecommerce businesses have more control over product policies, promotions, and pricing.

Initial investment of time and money: Marketplace

With an established infrastructure, a well-developed interface, and technological solutions, opting for a marketplace can save time, effort, and money.

Fees and commissions: 50/50 marketplace and ecommerce platform

Fees and commissions vary per platform.

Flexibility and customization: Ecommerce platform

An ecommerce platform provides the tools to build a customized storefront to reach niche and broad markets.

Customer data and relationship management: Ecommerce platform

With readily available customer information, businesses can build relationships with their customers and create impactful marketing campaigns.

Concluding points

Each business has different needs, visions, and goals. Understanding the pros and cons of  ecommerce platforms and marketplace business models can guide your decision-making process.

As a merchant on a trusted online marketplace, your products can have a broader reach and ensure credibility with lower upfront fees. However, your business must compete with thousands of other sellers with similar product listings.

Opting for an ecommerce platform gives you complete control over how your business looks, with advanced search options and access to data analytics. But be prepared for higher upfront costs, data security risks, and marketing expenses.

Ultimately, the choice between an online marketplace and an ecommerce platform should align with your business strategy and long-term vision. Don’t forget that your commitment and uniqueness can make all the difference in the competitive online business market. Good luck!