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Profit Generation: Marketplace vs. Hosted Website

You’re hoping to sell products online, or maybe you already do. The issue is “online” is too general. Just as you would for a brick-and-mortar store, you need to decide where you want to sell your products online.

Despite your position, at some point, you may have battled with selling your products on an online marketplace or selling your products on your own hosted website.

Ideally, you want to increase profit margins. But at the same time, you may not want to overwhelm yourself with the work involved selling your products on multiple platforms.

So what do you do?

There are pros and cons of both tactics, and even a hybrid approach you can take.

With that said, before you make a decision, it’s important to understand the nuances of both tactics to help you make an informed decision as to what will be best for your business.

In this blog post, we’re going to compare marketplaces vs selling your products on your own e-commerce store to see which fares best and will help you generate the most profit.

Marketplaces vs. Own E-Commerce Website

A marketplace is defined as an e-commerce site where products are provided by a number of different third party sellers and are processed by the marketplace operator. Examples include Etsy, Amazon, eBay. Especially Amazon has developed a great variety of options for resellers since it was started operating. Don’t forget to check other online marketplaces across the globe.

Online Marketplaces Across The Globe

Your own website is a self-hosted platform, you build and design yourself, drive traffic to and handle all the sales and processing yourself.

It’s easier to get started on a marketplace

The best thing about selling on a marketplace is you can get set up pretty much the same day.

For example, on Etsy, getting started is as simple as pressing the “open your Etsy shop” button.

marketplace vs own website

To make things even easier, you can sign up using your Google or Facebook account.

marketplace vs own website

From there, it’s as simple as choosing a password, answering details about your store, what you hope to sell and your contact details and you’re good to go. The whole process will take around an hour depending on how much of the required information you have to hand.

marketplace vs own website

But the point we’re making here is the process is quick, intuitive and there will be ongoing support along the way for if you get stuck. The same goes for signing up to sell on other marketplaces such as eBay or Amazon.

However, when you want to sell your products on your own website you need to do the following:

  • Choose a domain name that represents your business and hasn’t already been taken.
  • Find a suitable platform to sell, whether that be Shopify, Magento, or Woocommerce
  • Choose, design and customize the theme for your website.

Unless you’re a web developer or have extensive experience, this process can take some time, and for those who want the process expedited, you may have to spend a lot of money for someone else to sort it out for you.

So if you’re looking to start generating profit quickly, then you should probably consider first offering your products on popular online marketplaces.

There is already traffic on a marketplace

One of the struggles many eCommerce owners face when they launch their own sites is they struggle to generate traffic. They’ve spent a load of time building a beautiful site, have some really awesome products they think consumers will love, but the issue is no one is visiting their site.

Here the options are to spend money working with an SEO specialist to help create content that pushes your website further up the Google rankings.

The second is to spend money on paid advertising to directly target potential customers with your awesome offering.

For a new eCommerce store, money might be tight and this perhaps isn’t a viable option straight away, not if you’re hoping to generate profit quickly.

However, let’s look at marketplaces. If you look at the total visits to Amazon, you’ll see there is already more than enough traffic on the site to help you generate traffic.

marketplace vs own website

Etsy also has a large market share of traffic too. Because these sites already have traffic running through them, the chance of a potential customer finding a product like yours is much higher.

marketplace vs own website

So, if you’re keen to get as many eyeballs as possible on your product and don’t currently have any budget available for SEO or paid advertising, then consider selling your products on Amazon, eBay, Etsy or any other marketplace in your niche.

You don’t have to directly compete with your competitors on your own website

At Prisync, we try to teach people the importance of understanding what your competitors are doing whether it be their pricing strategies or their marketing strategies.

We help our customers do this through our eCommerce price comparison software, but we also try to explain the importance of standing out against your competitors and finding a competitive advantage.

One of the issues with selling on a marketplace is that when a customer searches for a specific product they’re looking for, they won’t just see your product, but they’ll see your competitors too.

marketplace vs own website

Here we can see three iPhone chargers, all sold by different sellers. How does a customer pick which one they want? Usually, they’ll base their decision on the reviews and prices.

But what if your product is ultimately more expensive than your competitors, you might be priced out of the market because a consumer will see these cheaper products with good reviews and won’t give your more expensive one a chance, even if it has better qualities.

You can create a better brand entity with your own site

One of the issues with selling only on a marketplace comes with if you’re hoping to turn your product not just into a viable business but a brand too. People may never actually realise you exist if all you’re doing is selling on a marketplace.

They’ll say “oh I bought this from Etsy”

As opposed to “oh I bought this from ‘The Good Jewelry Co”.

marketplace vs own website

Although getting yourself set up on Etsy is quick and easy, positioning yourself as a brand is much harder.

Let’s look at the rings above as an example, Really, you’ll look at the reviews, the price and the photos.

You probably won’t look at the person who is selling it, simply because you don’t really care. Your main concern does you like the ring in question.

It’s much harder to position yourself as a brand when you’re selling solely on online marketplaces than when you have your own website.

Retargeting customers is much more streamlined within your own website

Something you have to remember is that not every customer is ready to buy right away. This means whether they land on your Etsy, Amazon or eBay product listing or your own website they may not be ready to buy straight away.

However, one added benefit of selling your products in your own store is the ability to retarget your customers.

Marketplaces vs. Own E-Commerce Website

It works by using cookies to track what a customer has been looking at and then when they’re elsewhere on the web, send them super personalized ads to remind them of what they were browsing.

This is often enough to generate a sale.

However, this process is much harder when you’re selling your products on a marketplace.

The Hybrid approach – marketplace and your own eCommerce store

But why do you need to pick just one approach? Clearly, as listed in this article, there are benefits of using both strategies, so why not do just that: use both strategies.

If you want to generate serious profit, you should take the advantages of both strategies and work on a hybrid approach where you have your own store, but you also make use of the traffic provided by large online marketplaces.

One thing to be aware of, however, is if you’re taking this approach be sure you have the manpower to maintain all of it. It can very quickly become a lot of work. And you don’t want to spread yourself too thin by trying to do everything for everyone.

Marketplaces vs. Own E-Commerce Website

In this post, we’ve looked at the advantages and disadvantages of selling your products on either an online marketplace or your own eCommerce website. We’ve also looked at a hybrid approach whereby you utilize both platforms to your advantage.

When making this decision, think carefully about what sort of business you want to create, how quickly you want to generate revenue and how to plan to differentiate yourself in the mind of the customer.

Doing so will put you in a good position to dominate whatever selling approach you choose.

Where do you sell your products? An online marketplace? Your own store? Or both? Leave a comment below.





Hope you are doing great!

I am Alishba, works for an online digital marketing agency Futuristic Artists
I came across your site and got impressed with the frequent updates on it
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Yigit Kocak
Yigit Kocak


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