Pros and cons of marketplaces

When starting an online store, we often have the doubt if it is worth investing in our own ecommerce platform having marketplaces such as Amazon, eBay or Rakuten at our reach, which allow us to start selling quickly to a very wide audience without hardly investment. Like everything in this life, marketplaces have their pros and cons, and although, at first they like a bed of roses, the truth is that the road is full with traps. Today, we wonder if marketplaces are platforms where anyone willing to sell online should be present or not. We are sharing with you their main pros and cons. We hope this information help you check them and decide if the potential benefits that offer you make up for its risks in the long term. 

And especially in the early stages, which are the hardest. And it is that everyone knows that an independent online shop start to produce its first results must pass between 6 months and 2 years depending on how mature the sector is. Before these figures, and above all investment in time and money that mean, it is not surprising that more than one will feel tempted by the huge traffic which is accessed instantly if when opening a store in a marketplace. The thing is that no independent online store can compete against the advertising investment or with the traffic of Amazon, eBay or Rakuten, and so, most likely, if you open an online shop at any of these sites, you begin to sell more, better and much before that if you only counted with your own resources.

Some marketplaces- lie Amazon-make things so easy- that you may just have to put the product and content; the rest is put by the marketplace. With “the rest”, we refer to everything else: the ecommerce platform, logistics, transportation, hosting, SEO, advertising... It might be the situation that you only have to invest some time in creating your small shop within the marketplace; writing, activating and expanding your catalogue; and in managing the orders you receive. And all these for as mall commission on each sale. It looks the deal of the century, right? In fact it is - as long as you are not too successful, as in that case commissions per sale may already do not look so low to you, and you may start to question the strategical information of your business. 

Be part of a marketplace and sell your products exclusively through this kind of sites does not imply giving up on our own brand, and this is an advantage. As a professional seller, you will have your own brand and logo, and your customers will be able to value you particularly. They can also search your store within the marketplace and buy there and not another seller that sells products in the same category – just like if they were walking in a virtual shopping mall and decided to enter in the store of the brand X and not that of the brand This is a plus, since through the catalogue experience and the support that you offer to the user, you can build your brand without sacrificing the traffic and to the benefits of the marketplace. 

If you have started to sell online through a marketplace and one day you decide that you have already grown enough as to have your own online shop, one of the worst surprises that you can take is suddenly discover that no marketplace will allow you to export your database of customers. Exactly as you heard it: in a marketplace customers are not yours, and therefore, you can never have an own data base of customers that have already purchased on your shop. You will also never have access to relevant data when it comes to promotional activities, such as the order history for each customer, their frequency of purchase, average ticket, and so on. The marketplaces simply allow you to access and sell to their clients, provided that they remain like that. Leaving and creating an own online shop means starting again. 

It is true that you will not  invest a penny in hosting, ecommerce platform, advertising, SEO... but it is also sure that “your store” on Amazon, eBay or Rakuten will never be yours. The marketplaces give in you a space in their catalogue so you, humble vendor, can sell your products to the millions of users who visit the marketplace on a daily basis. But if tomorrow you decide that you are already over and you want to take your online store from Amazon, Rakuten to an own domain, do not get surprised when you discover that you will not be able to duplicate it: you will have to create the catalogue from scratch write the product cards again, upload photos... All this in addition to contract all that you had not done until now, and as we said above, without a single client. In the light of all this, and given that nowadays there are ecommerce platforms like Oleoshop or WooCommerce that, for a more than reasonable price, allow you to have an online store in a few steps with very cool templates, ask yourself if is not worth creating your own an online shop- although it is very simple - from the very beginning. 

Juicy conditions offered by marketplaces to sellers are not juicy by chance: are intended to attract the more sellers the better,because the real business of the marketplace is not in commissions charged to the seller, but in the database of customers which it attracts at the expense of the seller. Moreover, in the strategic information it collects on a multitude of sectors through the seller, which allows it to identify business opportunities and make use of them thoroughly, sometimes unethicaly. 

It is very important that you have clear that the marketplace is your competitor, and that selling your products on its platform you are providing confidential information about your business, about your billing, on the type of product you sell better, on your volume of customers, on the volume of business generated by your best sellers... In short, you are allowing your worst potential competitor, which you will never win, can access, without censorship, to your store's backoffice.