The Pros and Cons of Selling on Online Marketplaces

The advantages of selling on online eCommerce marketplaces vs their drawbacks and how having your own online store can prove to be a good idea.

Electronic commerce, well known as E-commerce, has provided a platform for retailers to sell their products online across the globe. Selling products online has grown into more prominence over the last year due to the global pandemic. As a result, online shopping activity has increased in well-known online shopping sites such as Amazon, Target, eBay, and Walmart. Before you embark on a journey to sell your products and services online, you need to do enough research to understand better the advantages and disadvantages of trading online.

In this article, we look at the pros of online marketplaces VS selling on your own website.

Pros of selling on online Marketplaces

1. Less time consuming

Once the business website has been initially set up to operate, you should not have to spend so much time running it because there is an operating system that takes care of the orders made, the finalized purchases, and the mode of payment. This provides you with so much time on your hands to improve on the products and reach more customers through personal customization of products.

2. More accuracy on sales

Because of how online businesses have been structured, it is much easier to measure sales than through offline selling of products and services. You can view online marketplace statistics through your business cart; by how many goods have been sold, the goods that are still on the cart, and the number of goods that have been abandoned. Most online sites use Google Analytics which helps keep facts on records. This platform enhances growth for so retailers on affordable fees.

3. Direct contact with the customers

The marketplace offers a direct support link between buyers and sellers. This is an advantage because it eliminates business middle persons; hence the seller gets immediate feedback from the client, and the buyer can acquire the best services available. This helps you grow the business faster because the reviews are quick to come in and as a seller you create a customer base.

4. No time restrictions

Ecommerce businesses run 24 hours a day, so time restrictions on any time zone do not limit the customers. Most online businesses operate globally; hence a customer can access services anywhere and at any time. Your company ends up maximizing sales and profits. Most physical businesses work for eight up to twelve hours a day at most; online selling of your products provides you an extended platform to do much better. Amazon as a brand makes sales other companies don`t on this factor and are able to meet demand.

5. It allows room for creativity.

Selling your products in the online marketplace allows you enough room to be creative constantly and enough room to implement the changes. This is because you will add that to your website, and it will create a ripple effect on everyone else, and that information will get to the clients in any part of the globe with a click of a button. Offering market value initiatives like flash sales, promotions, up-selling goods, and cross-selling products increases online activity on your website and gains you more clients.

6. You can operate the business from anywhere.

Ecommerce market websites reduce any geographical restrictions suffered by other office-based businesses. You can be anywhere in the world and still run your business to your maximum satisfaction and that of your clients. What you would need to run an online business is your website, email address, contact number, gadget, and internet, essentials you can acquire anywhere on the globe.

Cons of Selling on Online Marketplaces

Let's take a look at the cons of selling at eCommerce marketplaces and why having your own online store may prove more effective.

1. High competition

With selling products on online platforms comes competition from multiple sellers that have a similar catalogue to yours. There are sellers on the online marketplace who have been around longer than you have, they have built a brand and have loyal customers, so this makes it hard for start-up businesses. Different retailers provide discount offers to their customers and quality delivery services, due to such high competition small businesses are unable to make and improve sales.

In contrast, selling on your own website eliminates the factor of direct competition. Moreover, with your own website, customers can focus solely on your products and you do not have to worry about consumers being distracted by direct competitors.

2. More focus on the products instead of the brand

Online marketplaces consist of brands selling similar products; this makes it difficult for customers to focus on the brand. As a business person, if you are working to create your brand image, as opposed to just selling products, this will be a hard field to navigate as customers just care about products.

3. Social media marketing costs

With the increased competition from retailers, there’s a need to promote products and services on social media platforms. Sellers end up incurring social media marketing costs and ultimately this impacts their profits. There`s no guarantee that the money used on product promotion can be recovered, for start up businesses this may create losses.

These costs can be worthwhile for starting an online store with your own website. This is because social media and marketing activities will also establish a brand name for your store and website.

4. Delays in payments

When customers make payments, they do so through bank and credit cards which have a process in releasing funds. This could take up to 7 days; this delays growth and progress in the business as the money gets to the seller after few deductions have been made before cash transfer. Online sites such as Amazon operate globally, which means their buyers are from different countries with different sets of codes on the bank and mobile payments; hence the payments take a while longer.

With your own website, you can choose to integrate payment solution like XanPay via an API or any other method. Having your own checkout solution with XanPay ensures that you receive payments directly and almost instantaneously in your bank account. Furthermore, you can also provide the option of local payments to your customers as XanPay allows local payment options from more than 15 countries.

Bottom Line

Selling your goods and services on the online marketplaces comes both with its advantages and disadvantages. This post can help you come around to making the best decision from now on, as you weigh in all the pros and cons. You can also weigh in the consequences for longer run.