E Commerce is an ever-changing industry, day by day more and more customers are getting onboard to boost the growth of the Ecommerce business especially in India.

But with an increasing market , a raging force of competition is also scaling. The main battle for new consumers is taking place between Ecommerce Stores and the Marketplaces.

Let’s understand in a little brief

There are two types of front in the internet product selling industry commonly known as ecommerce industry, first ones are the business owners with there own website on which they are selling their products and the second ones are the enormous marketplaces such as Amazon , Flipkart, Meesho and others which provide a complete ecosystem where a large number of independent sellers are selling their goods to the customers.

Now the question arises which one is better and who will win the race in 2023.

Let’s understand this with a comparison between eCommerce stores and Marketplaces.

Competition and Reach plays a major role

Having an Ecommerce store of your own is effective in many ways as all your products come in prime focus for the visiting customers on your website. 

There is zero on site  competition , which is favorable for the business while being on a marketplace such as Amazon and others as a seller is an open invitation to a large amount of competition with other sellers , most possibly selling in the same category either the same product or similar to the customers. 

But the game changes when it comes to the reach of customers, an Ecommerce store offers a very limited reach which can grow with consistent effort but yet it is limited, which means less users visiting the website, less exposure of products and eventually less number of purchases.

While Marketplaces have a global reach as they have been on the top of the tide from the beginning, the enormous financial fuel keeps them always way ahead in terms of customer reach.

So a seller on a marketplace has a chance to attract a large number of customers because of the extended reach given by the platform.

Data Insight for Business Growth 

Another key difference comes with the insight of the business in terms of data , marketplaces provide very limited data , the key important data which connects a seller with the customers who have shown interest in your product , have made previous purchase and left the item in ad to cart in not shared.

This is where having your own ecommerce store is beneficial as you can have a dedicated customer base, by having a complete track of all the activity they do on your website as a user, which is helpful in determining the next planned strategy for better sales, branding and awareness for a business in the long run.

For Brand Awareness,Which is better: Ecommerce Store or Marketplace?

A new website is like a new baby learning to take its first steps, which makes every step  time consuming to establish. The real challenge is making people aware of your new ecommerce store, this involves a hefty cost investment which still will show results in the due course of time.

While Marketplaces like amazon are already pre established in the market , the customers trust this platform when they buy a product, placing your product on a marketplace can help you in quick branding as compared to an ecommerce store.  The cost for branding will also be better on a marketplace as it will reach more interested customers who are regularly buying from it. 

Commission Policy: Which one is pocket friendly?

As a marketplace gives you more reach, trust of the customers and daily substantial range of visiting users with every sale they charge you a fee known as platform fee or simply commission. 

A self owned ecommerce store makes you free of any such commission based situation, as you get to keep the complete pie without sharing it with anyone. The profits are completely of the business owner.

Cost of Initial Setup 

Again the marketplace proves to be more cost effective when it comes to initial set up for a new seller, as they do not charge anything for the seller registration. 

But an ecommerce store is like starting work right from the foundation of the building and thus with it comes to the costs of initial setup such as domain charges, hosting charges , design and development of the website a marketplace proves to be a more cost effective setup as the

domain and hosting charges are yearly renewable which means an ecommerce store owner will bear the cost every year.

Price Comparison a differentiating factor in Sales.

In the end it’s the sales which grow a business strong, the price comparison factor comes in because of the nature of the platform on which we sell our product. 

A marketplace is designed for sellers and customers both, to keep a fair play and price for both , a price comparison terminology is used where a customer gets to choose the lowest price on which different sellers are selling the same or similar product.

This is a drawback from a seller point of view, which is not present on the ecommerce store, as you get the freedom to keep the price as much as you want for your own product and there is no comparison available, which gives you better margins on every sale.  

In conclusion both ecommerce store and marketplace have advantages and disadvantages but with these growing industries both will have an impact at their own pace. 

Which one will you choose to grow in 2023?

As seller we would love to know your point of view on this, do comment below

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