Big and small online sellers can be found in online marketplaces where more shoppers search for what they need. But more established brands also know the benefit of having their own ecommerce platform.
If you’re relatively new to online selling, it’s important to assess what platform is best to effectively sell your products.
Let’s get to know the difference between ecommerce platforms and online marketplaces, and where you can effectively reach more Filipino e-shopaholics.
Also read: Who are the Pinoy E-Shopaholics and How to Win Them Over
What is an ecommerce platform?
An ecommerce platform is a website that enables businesses to manage their online store. These platforms provide tools for product catalog management, payment processing, order tracking, and often include features for website design and marketing to facilitate online sales.
Every transaction is between the seller and the customers only, without involving any third parties.
Some of the popular ecommerce website builders are Shopify, Woocommerce and Bigcommerce.
The pros of using ecommerce platforms
There are many benefits to having your own ecommerce platform, especially if you’re building your own brand online.
It’s convenient. Customers can shop your products 24/7, providing convenience and flexibility, which can lead to increased sales. As there is no third party involved, the communication will occur directly between the seller and the customer.
You can manage your branding. You’ll operate independently and have full control of your website. With that, you’ll have the freedom to work on building your brand instead of just competing with many competitors in online marketplaces for the customers’ attention.
You have global reach: Your ecommerce platform allows you to reach not just local shoppers but a global audience. It’s easy to expand your customer base beyond geographic boundaries. But make sure you’re ready before offering your products to international shoppers.
More importantly, Choose your International Courier Service well.
It has lower overhead costs. Operating an ecommerce store typically requires fewer overhead costs compared to physical stores, such as rent and utilities. You can use your budget on marketing your products more efficiently or on further expanding your business online.
Get insights from analytics and data. Ecommerce platforms offer robust analytics tools, enabling you to track customer behavior — what they like or don’t like, when they shop, what their challenges are, etc. These insights will help you make data-driven decisions, like a more targeted marketing campaign.
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The cons of using ecommerce platforms
Just as there are benefits, there are also a few downsides to keeping an ecommerce platform, including:
Initial setup costs. Setting up and customizing your ecommerce platform can be expensive — including design, development and integration costs. But these costs are still lower compared to opening a new retail shop.
Technical challenges. Managing and maintaining your platform may require technical expertise, which some businesses may lack. The best way to address this is hiring third-party services, such as web maintenance and as payment processors. But choose your service providers well to avoid potential disruptions and issues.
Security threats. Ecommerce sites are susceptible to security threats, including data breaches and fraud, requiring strong security measures. For example, ecommerce websites are prone to online hacking, so you should take immediate action to prevent data breaches and protect the information of your customers.
Learn how you can Protect Your Ecommerce Website from Online Threats.
What is an online marketplace?
An online marketplace is a digital platform that connects multiple sellers or vendors with potential buyers, facilitating the buying and selling of products or services. Meaning there’s a third party involved that helps brands sell their products.
These marketplaces provide a centralized location for a wide variety of goods and services, allowing consumers to compare products, prices, and sellers in one place. They also handle payment processing and may offer additional features like customer reviews, seller ratings, and dispute resolutions. Popular online marketplaces in the Philippines are Shopee, Lazada and TikTok Shop.
Let’s now take a look at the pros and cons of selling in online marketplaces.
The pros of selling in online marketplaces
You have a wider audience reach. Online marketplaces have a large and diverse customer base, providing access to a vast pool of potential buyers. You can attract more customers to your shop as marketplaces already have shoppers regularly visiting them.
Established traffic. As mentioned above, these platforms often have regular and significant web traffic, reducing the need to spend on extensive marketing efforts to attract customers to your shop.
Lower setup costs. Setting up a store on an online marketplace is generally quicker and more cost-effective than building an independent e-commerce website. They also handle payment processing, reducing your administrative burden.
You gain trust and credibility. Being part of a well-known online marketplace can lend credibility to your brand and products, as customers trust these established platforms. This is evident during big double day sales.
You’ll have increased brand awareness. As online marketplaces have millions of active users, it can provide your business exposure that can help raise awareness of your brand among potential customers.
They’re also usually well-optimized for search engines, so when customers search for products or services related to your brand, your listings on the marketplace can appear in search results.
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The cons of selling in online marketplaces
There’s high competition. The high number of sellers on online marketplaces can lead to intense competition, potentially affecting pricing and margins. It can also be challenging to make your products stand out.
Fees and commissions. Most online marketplaces charge fees, including listing fees, transaction fees, and commission fees that can eat into your profits. In some cases, these fees can be high for many small sellers.
It may also take a few days for the payment to reflect into your account since they’re handling the payment process.
You have limited brand control. Sellers often have limited control over branding and customer experience on marketplace platforms.
You have limited customer data access. You may have limited access to customer data, which makes it challenging to build direct relationships and market to your target customers outside of the platform.
Finding a balance between ecommerce platform and online marketplaces
Both ecommerce platforms and online marketplaces can be very effective and beneficial in promoting your brand and increasing your sales. Maximize the advantages of each platform.
Ultimately, the suitability of an ecommerce platform depends on the specific needs and resources of your business. While selling in online marketplaces can be a lucrative opportunity.
What’s important is carefully considering these pros and cons and weigh them against your business goals. And making sure your parcels will reach your customers on time, safely and hassle-free.
Check out more tips for your online business:
The Impact of Double Day Sales in the Philippines
TikTok Shop vs Shopee: The Pros and Cons of Each
