Is it better to sell independently or through online marketplaces?

Everyone can become an entrepreneur and sell wares in today’s internet-connected world. There are opportunities to build businesses that can sustain you financially while allowing you to live comfortably.

But while this may sound easy, getting started in this area is challenging, as it feels as though almost everyone is doing it.

If you have started already or are just getting going, the decision to go with online marketplaces such as Etsy or Amazon versus a business website is challenging. In this article we look at the pros and cons of selling through a third-party site and how this compares to selling as an independent.

The pros of going with an online marketplace

So what are the benefits of going with an online marketplace? Here are some to consider.

You get a ready to go site

Getting a website up and running that can store customer details and take payments is more difficult than you might imagine. You want an intuitive website to use whilst keeping your customer details and business IP secure. 

The great benefit of online marketplaces such as Etsy or Amazon is that this is already done for you. There is an out-of-the-box solution that means you can get started almost instantly. There are tracking stats available, the secure payment system, and years of research and development in user experience.

You have greater trust from the start

People are naturally nervous about buying from independent sites on the internet. As an unknown, the customer has to trust that what you say you deliver, you will. When you go with an online marketplace website, you get the instant trust that Etsy and Amazon have created through their brand. These websites also offer promises to customers that insure them if you do not fulfil the order.

These sites’ brand value also means that you are almost guaranteed greater footfall, and you will likely get views on your products instantly. The same would not be true on an independent website, where you would have to work hard to be noticed – and spend a fair bit on marketing.

They supply the customer services

Etsy and Amazon have an established customer service department ready to deal with concerns. Etsy is especially skilled in using its customer support mechanisms to create and maintain an engaged community.

This community is a significant resource for sellers, who can hear their thoughts on what they like to buy from the customers’ mouths. The review system also helps you build the testimonials you need to grow without hiring a customer services advisor to follow up on your sales.

The downsides of an online marketplace

And what about the downsides of an online marketplace? Here are some to to think about.

You have limited control

While online marketplaces are convenient, you are locked into their way of doing business. As a seller on such a site, you are at the mercy of any decisions made by the company and the terms and conditions you signed up to. While unusual, it is possible that a sudden policy change could invalidate all the hard work you have put into creating loyal followers and buyers.

It’s harder to build a brand

Your ability to strike out and create your brand on a website like Ebay or Etsy is limited. You are tied into a template, and you will look like most other stores on the site. You will struggle to differentiate yourself and so take your business to the next level. You may want to optimise your listing to gather marketing information, which is impossible to do on online marketplaces.

If you set up your independent website, you have complete control over where you gather emails, the calls to action you use and any detailed analytics of how your page is performing. 

Therefore, while Etsy or Amazon are an easy way to get started and can help you build a business quickly, you will likely want to change to an independent website sooner or later. Scaling the business is going to be more successful when your brand is distinguishable from your competition.

You are side by side with your competition

The significant problem with online marketplaces is that you are easily compared to your nearest competition. Competing for the buy button is difficult in a space where so many sellers have the same aspirations as you. The website offers up alternatives even when the buyer has chosen to click on your page.

They cost money

Working through an online marketplace will diminish the returns on what you sell. You will be charged for listing your item, and there will be a commission taken at the end. While these costs are usually only a small proportion of what you earn, you will be giving a lot of money to your host website over time.

When to swap to your own site

It seems that the best strategy would be to build your loyal fans through the pre-built online marketplace’s website and then switch to your site at the point you are ready to scale.

With more control over the design and marketing and fewer distractions leading your customers to click away, you can begin to nurture the lifetime value of each click. Make sure you make this swap when you are confident you know what you are doing and you can afford to do it properly.

Laura McLoughlin is a Digital PR based in Armagh, Northern Ireland. She has previous experience as a website editor and journalist, and currently works with Chorus Commerce.

Photo by Christina