Ecommerce VS marketplace. This is the clash in the minds of entrepreneurs who are preparing to create an internet shop for the first time.
The different schools of thought amplify the confusion of those who want to expand their Insurance business online, providing varied options without explaining in depth the various pitfalls that the two options entail.
There are various ways to facilitate the meeting between supply and demand. Such as opening your shop on social networks, creating e-commerce, or opening the shop on marketplaces.
The Topic of This Post
- 1 E-commerce vs marketplace: the value of analysis
- 2 Marketplace: what it is, types and advantages
- 3 When to choose the marketplace
- 4 E-commerce: what they are, costs, and advantages
- 5 When to choose e-commerce
- 6 E-commerce VS Marketplace: conclusion
Ecommerce VS Marketplace: the value of analysis
But what is the best option? There is no single answer.
Each niche is a world of its own and the success of this investment is also influenced by the market, consumer habits, and competition.
Therefore it is wrong to reduce this decision by looking at it as if it were a match to be reduced to a banal ” e-commerce vs marketplace “.
Before establishing a priori which of the two options can bring a profit, it is necessary to start from the analysis.
To make the investment in the creation of an online shop profitable, you must first know the online platforms, their strengths, and their weaknesses.
Ecommerce vs marketplace: a conscious choice
In parallel, as you will discover in the next lines, to have an ROI. The ROI (Return Of Investment, “return on investment”) is the income generated by a given investment, less the cost of the investment itself. ROI is typically the measure …interestingly, it is necessary to consolidate a solid strategy aimed at achieving medium-long term objectives.
In short, if you desire to grow, reach new people in target knowing in depth the role of e-commerce and the marketplace could be advantageous to develop a strategic plan to expand without damaging the company.
Marketplace: what it is, types and advantages
Marketplaces are online platforms where entrepreneurs sell products against payment of fees and monthly fees.
Today there are various types of marketplaces – vertical and horizontal – aimed at trading with certain targets -B2B.B2B (Business-to-Business) is an adjective used to describe companies that sell to other companies. For example, Studio Samo is primarily a B2B company, because it sells …, B2C and C2C -.
Among the main advantages, we find a strong positioning on SERP.
Types of marketplaces
On the web, you can find different types of marketplaces, according to your needs and those of the target audience.
When we talk about digital shopping platforms it is good to make two distinctions: the purchase purpose and the target audience.
For purchase purposes, we mean whether we are dealing with a vertical or horizontal site.
- Vertical Marketplace: ultra-specialized on the only sector.
- Two key examples: Zalando [Clothing] and Etsy [Crafts];
- Horizontal Marketplace: Used as an aggregator of various categories, as in the case of Amazon.
A second analytical measure is the target audience:
- B2B market: some marketplaces target companies.
- The marketplace leader in negotiations with this target is Alibaba ;
- B2C market: most of these platforms are specialized in commerce with consumers. The first marketplace based on the B2C market is Amazon ;
- C2C market: some sites put individuals in contact to facilitate the sale, as in the case of eBay;
- Hybrid Markets [B2B, B2C, C2C]: a classic example of a 360 ° marketplace that satisfies every type of consumer is eBay.
Analysis of the positive and negative aspects of the Marketplace
Online you can find the perfect marketplace according to your needs.
Despite this premise, it is not uncommon to find entrepreneurs or simply curious to ask “Is it advantageous to open a shop on these platforms?”
The simple answer is “it depends.”
To have a complete and neutral view, let’s first address the benefits these sites offer to entrepreneurs.
- Strong positioning on the SERP ;
- Daily consultation by thousands of users;
- Authoritative and reliable – especially in the eyes of consumers;
- They assume the role of search engine.
Speaking of negative aspects we find:
- Costs: subscriptions, fees, advertising. Advertising (abbreviated ADV) means advertising, it is a paid message that a company sends to inform or – influence the people who receive it …;
- Direct competition: both marketplaces – horizontal and vertical – are aggregators of products from different companies, so the clash is on products, not on companies;
- Often the data is not available: email, tracking with Analytics. Analytics, or web analytics, is the measurement, collection, analysis, and reporting of web data for understanding and optimizing the use of the web. When…;
- Retargeting is a luxury not available.
When to choose the marketplace
Marketplaces are one of the many solutions to enter into business with prospects in the digital market.
When should you choose them as a touchpoint then?
I place international expansion as a starting point since marketplaces favor sales outside national borders.
For example, by opening a shop on Amazon, the platform allows the entrepreneur to also sell to various foreign sites.
For an entrepreneur this means coming into contact with different customers, difficult to reach with e-commerce [especially when the budget. A budget is an estimate of income and expenses over a specified period in the future and is usually compiled and re-evaluated periodically.
THE… it is limited and you don’t have the funds to invest in multilingual sites that can be positioned with SEO.
The marketplace is excellent initial testing to monitor the response of the foreign public.
A second case that these shopping sites are worth investing in is when the niches are alive and profitable.
In the case of entrepreneurs selling handicrafts and verticals, Etsy could play a crucial role in tapping new one’s prospects. A Prospect is a prospect for whom we have contact information and who has been qualified as meeting certain criteria.
Ecommerce: what they are, costs and advantages
Ecommerce is a proprietary site where the company has direct control over products, payments, and data.
Unlike what one might think, even e-commerce are subject to competition – direct and indirect – since to reach customers you have to work on two fronts:
- Organic, thanks to SEO – Expensive in terms of money, manpower, and time;
- Advertising, thanks to Ads on social networks on the search engine – Onerous in terms of budget to scale and reach more people.
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 physical spaces but want to sell products directly to an online audience.
Analysis of the positive and negative aspects of Ecommerce
Ecommerce is one of the solutions to extend sales in the digital world.
Among the advantages that this option offers we find:
- Data availability: tracking with Analytics, Facebook Pixel, customer data;
- Retargeting ads: useful when users do not complete the purchase and leave the site;
- Personalization: here the user experience factor comes into play. A functional and well-organized site prevents the prospect from feeling confused.
Ecommerce, in addition to being focused on the product and the customer, is affected by huge start-up and maintenance costs.
Let’s analyze the disadvantages:
- Costs: building e-commerce is not cheap;
- To do branding. Branding is a marketing technique used by companies to create the desired image of a product or company in the consumer’s mind. The… it takes years and investments, even if this factor is secondary;
- Consistent budget ;
- You need to be clear about your medium to long-term goals.
The costs of e-commerce
Strategic and functional e-commerce requires an economic investment and professional figures.
First of all, you need to invest in qualified and competent professionals:
- Copy ;
- Images and graphics;
- Email writer;
- Customer service.
Once the personnel costs have been calculated, it is good to talk about the economic resources necessary to start the business project.
1 – Construction costs: Strategic e-commerce needs IT specialists who know how to shape it and place the marketing elements in the right places [Optin, Freebie, Coupon, testimonials, Images].
3 – IT Budget: to cope with the various costs related to technical problems, to better manage the digital payments of customers, to create the site through CMS. A Content Management System, often abbreviated to CMS, is software that helps users create, manage and modify the contents of a site.
4 – Extra costs: CRM.CRM (Customer Relationship Management) typically refers to software for managing relationships with customers and prospects. CRM stands for Customer, Email marketing automation.
When to choose e-commerce
Ecommerce is the ideal choice for those with an authoritative and well-known business at the offline level since it could facilitate the achievement of a high-profit margin.
In addition to the authority of the brand. A Brand is an identification symbol, trademark, logo, name, word, and/or phrase that companies use to distinguish their product from others. A combination …- questionable or not – a second crucial factor concerns the objectives that the entrepreneur has for the future.
As we have seen, opening e-commerce involves high and constant costs, therefore the expense – to be sustainable – needs to be accompanied by achievable medium-long term objectives.
Ecommerce VS Marketplace: conclusion
The web offers varied and highly customizable solutions to start an online business.
Ecommerce and marketplaces involve high costs, albeit in different areas. Each of the two solutions can bring benefits and drawbacks since there is no definitive solution.
The ideal solution comes from analysis, testing, and an entrepreneurial mindset.