Your own online shop or Amazon and ebay: Where should retailers sell?

Sales multichannel

There are many different ways and solutions to design your first entry into online trading. On the one hand, there is the possibility of approaching carefully and on the other hand, retailers can also go straight to the start with their own extensive online shop and a broad product portfolio. Whether your own online shop or via the marketplaces Amazon and ebay ? One thing is certain, whoever wants to trade online has a whole range of options. In this blog post we reveal which sales platform is best for you.

Check out the advantages and disadvantages of online marketplaces and your own online shop

Online shopAmazon & ebay
Investment & reachCapital is usually required for your own online shop. A fee is usually due monthly (for cloud-based systems) or annually (for licenses) for using shop software. In addition, the site must be set up with all the necessary functions and filled with content, which calls for special knowledge or external experts, whose services may incur additional costs. If the page is then ready to start, it takes time for the first customers to find it. In addition, there is an urgent need for marketing to make users aware of the shop.

No seed capital is required to sell on the marketplaces. In addition to sales commissions, which are only incurred when a sale is made, additional monthly fees may apply. Both can be seen in advance and stored in the terms and conditions, which means that the costs are always manageable. The biggest advantage: pretty much everyone knows Amazon and ebay, which has an incredibly positive effect on user numbers. Once the product has been entered, it can be found almost immediately using the search function and ordered without the retailer having to invest further costs in marketing.
Technology & serviceThe shop operator is primarily responsible for the organization, administration and costs of technology and service. Depending on which shop system is used, support can be used and certain tools made available. It is a great advantage if the shop operator is already active in the industry or has the appropriate prior knowledge, which allows him to manage and implement a lot himself without having to use external staff.Marketplace traders pay fees and receive working software in return, so that the processing of sales can be guaranteed without any problems. But here, too, it should be noted: Should problems and technical difficulties arise, the retailer can usually not exercise any influence on the problem solving and is dependent on the provider.
Design optionsYour shop – your rules! With their own online shop, retailers can choose their own individual functions and designs and offer their own customers the experience they themselves deem appropriate.

Retailers have very little influence on the product presentation and the corresponding design. Marketplaces have strict guidelines that traders must adhere to. Colors, fonts and layouts are largely standardized, even if ebay offers more options than Amazon. In the event of a violation, dealers can be warned or the product can be excluded from sale.
Pricing & PricingHere, of course, retailers have the great freedom to calculate their prices appropriately and individually. Since there are no fees in contrast to sales via the marketplaces, the profit margin is generally significantly higher. Another important effect is that visitors to the shop do not have a direct price comparison as long as they are on the site. While the price is often the decisive criterion on marketplaces, general consistency plays a major role in your own online shop.At the market places where customers can choose between many similar offers, the price is often decisive. Users choose the retailer where the product is only a few cents cheaper or where there are no shipping costs.

However, there are already great repricing tools for retailers that support price calculation and make them competitive on the marketplaces without destroying the margin.

competitionOnline shops also compete as soon as they offer similar products. The motto here is to build up your own customer base, to bind regular customers to the company through targeted marketing measures and to increase awareness through branding measures.Price dumping and competition is a known problem on marketplaces. Because the more retailers with the same products are represented on the platform, the more the pressure increases to achieve the best possible price. This results in products being sold below the margin and traders gradually having to distance themselves from the marketplaces.
Customer loyaltyA good online shop convinces first and foremost with good product quality, shipping speed and friendly service. If these criteria are met, the customers remember the name and can thus be permanently linked to the online shop. Here, too, of course, your own online shop offers a lot of freedom when it comes to remarketing.In general, one can say that customer loyalty on the marketplaces is rather limited. For many users, it is not necessarily relevant who they order from. What counts here is the seller’s rating profile, a good price and problem-free delivery.
BrandingWhen it comes to building a brand, there is no question that having your own online shop naturally offers more options. As already mentioned, it takes a while until the shop is up and running and can be found by the first customers. So retailers are initially starting from scratch and have to work to raise awareness of the shop through targeted measures. There are already excellent opportunities to draw attention to yourself via social media channels, Google, partner sites and many more. However, it should be noted here that this can be time-consuming and costly.

Basically, the marketplaces forbid traders from mentioning their company in any way. Amazon is particularly strict here; the shipping giant forbids its retailers to insert business cards, for example, or to mention their own shop on invoices that are included in the packages. Branding for one’s own brand can therefore hardly be carried out on the marketplaces. However, retailers who sell private label products have advantages in terms of branding. In addition, products can be placed more prominently within the platforms through fees or advertising bookings, thus promoting sales.

Conclusion

Selling marketplaces or online shops

Our recommendation: Rethink multichannel! In fact, when choosing a distribution channel, there are enough good reasons to use multiple tracks. It is recommended, for example, to start online sales on a platform in order to try out and analyze aspects of implementation before setting up your own online shop. In this way, among other things, you can of course test very well whether online trading is even suitable for your own company, internal processes work and the selected logistics partner is reliable. If retailers opt for a single sales channel, in the worst case scenario they may fail to take advantage of the opportunities.

Tip: Our ASIN advisor can help you to find new niches and articles with potential and to find out the prices of the competition. Find out more here!

In summary, one can say that the marketplaces are a very good school for e-commerce newcomers, as they are extremely focused on customer satisfaction and do not involve any special investment or knowledge. If the retailer gains the necessary experience, he can approach the plan of opening his own web shop more calmly because he now knows what his customers want and what a successful shop needs.

We are also happy to support your start in e-commerce with our broad product portfolio. Find out more about our solutions here!

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