Is it still better to sell on online marketplaces? Or is time to turn to your own store? Sellers reveal

Rebecca Menezes | Sep 10, 2020

Ecommerce is certainly here for the long run. Selecting the correct online retail platform is what ensures you stay put in this business. Every online seller has considered different platform options at some point in their online selling career. And, each time the burning question on everyone’s mind was:

“Which online platform is the best to sell online?”

Is it:

A – An online marketplace?

B – An online store?

C – A combination of both?

Indian Online Seller (IOS) decided to figure out which of these options online sellers preferred most and why. We collected responses from over 20 online sellers and received the following responses:

A majority of the sellers we communicated with said online marketplaces were the best option for them this far. While a very small percentage vouched for setting up their own online store. But, together with an online marketplace, sellers found it a more favourable option.

What makes Marketplaces a top preference?

In spite of reported troubles with online marketplaces, sellers still prefer them as ecommerce channels. To understand why marketplaces have such a hold on online retail was something only sellers could confirm. So, we inquired further and deduced the following –

“You can kick start your business with the available online marketplaces. If you are strong in your category and have launched your product targeting the supply-demand trend, slowly and steadily you will start getting momentum in terms of sale and visibility. As you start getting sales, it’s time to spend on marketing via various forms,” expressed Ankit Srivastava an ecommerce enthusiast.

Online seller, Farooque Memon of the CottonChef, has a presence on marketplaces and an online store of his own. With regards to online marketplaces, he mentioned that they only help you to understand the meaning and the process of:

  • Sales
  • Advertising
  • Distribution
  • Logistics
  • The need and way to build your brand

“Marketplace rules and policies are so strict and sometimes ugly. Marketplace fees vary from a minimum of 25% to a maximum 40 % (ON SALE PRICE!!) It is difficult to cut your own slice of profits when you realise that you are paying commission to the marketplace, sometimes more than the product cost! Also, in no time, your account can be suspended and you will be left with nothing if that is the only source of income. A smart seller would learn from ecommerce and upgrade and upscale their business gradually and slowly,” the textile and apparel expert discloses after three years in the ecommerce field.

But, in spite of these comments, other sellers pointed the following benefits when selling with online marketplaces:

If Marketplaces are the best, should Online Stores be considered?

Ecommerce enthusiast, Srivastava believes that a main problem most sellers face in the online realm is, generating traffic for their product pages. This is irrespective of whether they sell through marketplaces or online stores.

“The advantage you will get from launching your products on online marketplaces is- If you have done homework on 3Ps (Product :: Price :: Promotion), you need not to worry about generating traffic. In your own store, there will be a huge investment in generating right traffic and conversion turnaround is not guaranteed. Also, there will be an additional cost of maintaining the server and website resulting in loss of capital at the very onset,” he pointed out.

Memon, on the other hand, felt that selling on your own website is the next stage of of online selling. And, you must consider this platform only once you have:

  • An ample database
  • Experience
  • Fine tuning acquired by selling online on marketplaces

“In the initial 2-4 years (of online retail), a small scale business cannot afford to spend on building their own website, generating traffic and maintaining it. The website building cost can go anywhere from Rs.15,000 to Rs.50,000 and maintaining it would be a hole bigger than your pocket itself,” the seller stated.

But those who feel online stores are the one true option for online selling said:

Are there benefits to combined selling on Marketplaces + Online Stores?

The co-founder of Dry Fruit Mart, Ali Reza Zariwala has been in the online retail game for approximately 3 years now and he strongly believes that there are benefits to selling on both marketplace platforms and your own store. The dry fruit and specialty food seller lists the following benefits –

“With your own store you have –

  • Account Security – No account suspension.
  • Limited return issues – It can be accepted if under comp norms.
  • No one can force you to refund – You can issue refunds if you receive proper returned products and if it’s a genuine case.
  • No automated refund delay in delivery – There are no criteria to be maintained even if you ship products after 2 or 3 days. You can handle things by convincing the customer.
  • Promotion – Promote your best product on your best day according to the inventory you have.
  • Commission – No fees to be paid except taxes and payment gateway charges due to which you can offer products at more competitive price.
  • Product Visibility – More Visibility of product due to high traffic
  • Quick Delivery – Deliver quickly with assistance from various logistic partners
  • Customer Service – Offer 24/7 point of contact for customers.”

But, with an online marketplace, things like high speed delivery (like same day deliveries), return pickups, COD cervices, offers, discounts, cash  backs, targeted marketing campaigns, after sales services and visibility to a large audience, the seller adds.

According to Srivastava, “This is the best option if you are looking at branding. But here also, I would suggest, the first 2 years should go solely focussing on online marketplaces. Once you start getting commendable traffic and sales on marketplaces, it’s time to attract the traffic to your website by giving various offers and coupons.”

Memon claimed that using marketplaces without a separate presence through an online store makes it difficult to survive in online retail.

“The third idea was to work on online marketplaces and your online store – This option is better than the other two, but it’s still not a very good option. In this model, a business can learn the tactics and make itself ready to process bulk orders by selling on online marketplaces. It can apply the same ideas and work at an equal magnitude with its own website. The profits that are made from ecommerce business (if any) can be utilised to run and grow one’s own website,” the seller mentioned.

Or, you can work out a fourth online retail model, he said, to ensure business security and definite sales.

“This model is so sustainable in the long run. If there is competition, like fro Cloudtail. Or in case your account is suspended due to a mistake or if you have trouble making profits through the marketplace style of business, you can concentrate more on the other legs of your business – that is the offline sales (brick and mortar) and your own website/ webstore.

This model helps because even if you wish to decrease your online presence on the ecommerce marketplaces, you can still capture the offline market and drive traffic to your own website,” Memon explained based on his business’ offline operations of over 50 years.

However, if you prefer the online retail space only, here are the benefits you can expect from using online marketplaces and online stores together:

Which seller opinion do you agree with? Marketplaces, online stores or both? Share with us your opinion in the comments section below. 

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Rebecca Menezes

Rebecca Menezes

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