Business

E-commerce or marketplace: When to choose each ?

In the digital age, there are different ways to sell online: open your own store on social networks, create an e-commerce website or position yourself on a marketplace. But what is the best option? In fact, there is no single answer. Each niche is a world of its own and the success of such an investment is also influenced by the market, consumer habits and competition. It is therefore wrong to reduce this decision to an e-commerce vs. marketplace match.

Before determining which of the two options will be the most beneficial for your business, it is necessary to start by analyzing what you want to sell and your market. You need to build a strategy to achieve medium and long term goals.

If your goal is to reach new target groups or maybe to break distances, a thorough knowledge of e-commerce and marketplaces will help you to build a strategic plan to develop in the best way.

The different types of marketplaces:

Marketplaces are online platforms where entrepreneurs offer products for sale against payment of fees or charges.

There are different types of marketplaces. They can be vertical, horizontal or designed to trade with specific targets: B2B, B2C and C2C. On the web, you can find these different types of marketplaces, depending on your needs and those of your target audience.

When we talk about digital shopping platforms, we have to distinguish between the shopping purpose and the target audience. By shopping purpose, we mean vertical or horizontal site: a vertical marketplace is ultra specialized on a single sector. As an example, we can take Zalando or Etsy. A horizontal marketplace is used as an aggregator of various categories, which is the case of Amazon.

By target audience we mean B2B, B2C or C2C:

  • B2B matchmaking platforms target businesses. Odero is a perfect example of this.
  • B2C marketplaces are the most present platforms, like: Amazon, Cdiscount, Fnac, Auchan …
  • C2C marketplaces put individuals in contact to facilitate sales, as in the case of Vinted.
  • There are also hybrid marketplaces! Ebay is a classic example of a multipurpose marketplace that caters to all types of consumers.

Positive and negative aspects of a marketplace

Create a marketplace offers many positive points:

  • A good ranking in the SERPs
  • High traffic, up to thousands of users per day
  • Reliable in the eyes of consumers
  • Acts as a search engine

But there are also disadvantages to consider:

  • The cost of the platform (subscriptions, fees, advertisements)
  • Direct competition. By opening a store on a marketplace, which by definition is an aggregator of products, you deliberately expose yourself to competition.
  • You may not have access to certain data: e-mail, tracking with Analytics …
  • You can’t do remarketing.

When to choose the marketplace?

Marketplaces are one of the many solutions to do business with prospects on the digital market.

  • To have a great visibility and export internationally.
  • By opening a store on Amazon, you can reach a large audience and benefit from the notoriety of the site. This means getting in touch with different customers, difficult to reach with an e-commerce site.
  • If you have a niche market, vertical marketplaces can act as a real springboard for your business.

II- E-commerce websites

To compete, you must work on two fronts to reach customers:

  • On the organic front, through SEO, which is expensive in terms of budget, manpower and time.
  • On the advertising front, by advertising on social networks and search engines. Doing this is also costly in terms of budget, but allows you to reach more people.
  • Also, let’s point out that e-commerce sites allow companies to have direct control over products, payments and data, as they are owned by them.

Advantages and disadvantages of an e-commerce website

In addition to being ideal for those who already have a mature business, e-commerce can be ideal for those who do not want to invest in a physical space but want to sell products directly to an online audience.

Among the advantages that this option offers, you have:

  • The availability of data: tracking with Analytics, Facebook Pixel, customer data…
  • The possibility of remarketing, very useful when users abandon their shopping cart.
  • The possibility of personalization. With an e-commerce site, you can create real user experiences.

The disadvantages of an e-commerce site:

  • The cost of setting up an e-commerce site is high
  • The brand image: it will take a good strategy and time to build a reputation.

The costs of e-commerce website

An effective e-commerce strategy requires an important economic and professional investment.

First of all, it is necessary to invest in actions such as :

  • The image and graphic identity: this action can cost more or less depending on the provider you choose. But this step should not be neglected! It allows your brand to stand out from competitors.
  • SEO, this technique is a strategy that requires time and a lot of investment. The results are seen in the long term.
  • Newsletter, doing this allows you to create a climate of trust between your prospect and your brand or website.

At the level of economic costs necessary to launch the business project we have :

  • The cost of implementation: to launch an e-commerce site, you will need computer specialists who know how to shape and place the marketing elements in the right places (Option, Freebie, Coupons, Testimonials, Images). For this purpose you can consider the offshore development, which means the transfer abroad of the development of computer applications. it can make you save some money
  • The marketing cost: referencing, advertising, blog, social media, email.
  • The IT budget: this budget is not to be neglected. It is necessary to create the website (via CMS or others), to face the different costs related to technical issues and to manage the digital payments of the customers.
  • Additional costs: you should not forget that you may pay for a CRM or email marketing automation.

Considering all this information, e-commerce is the ideal choice for offline businesses with brand awareness, as it can facilitate a high profit margin.

Conclusion

Today, the web offers various and highly customizable solutions to launch one’s online business. Whether it is a question of marketplaces or e-commerce sites, the costs are high. Each solution has its advantages and disadvantages. The ideal solution is to make a thorough analysis of your business, then make tests to validate or not the solution.

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