Advantages and Disadvantages on Selling Leading Marketplaces such as Amazon, eBay and Etsy

• April 14, 2018 eCommerce Catalog Management, Tips and Tricks

In today’s eCommerce marketing scenario, every business owner has many options to sell their products online. You have to choose from two options. One is that you open your own eCommerce site using a number of comparatively reasonable shopping carts and second is you can set up shop on leading marketplaces such as Amazon, eBay and Etsy.

Now, the question in your mind is which one is best for your eCommerce business? Standalone or marketplace or both? Let’s focus on advantages and disadvantages of selling products on these marketplaces to answer your question.

AMAZON

Advantages:

• Enormous Customer Base: Amazon is one of the biggest online store that have approx. 200 million active members.
• Reliability and Trust: Almost all new customers feel more relaxed while purchasing from Amazon as compare to purchase from any new website.
• Excellent back-end infrastructure and support, including tax collection and shipping: Amazon offers a great back-end infrastructure and support so that you need not to figure out how to do all the setup yourself.

Disadvantages:

• Fee: Amazon fee begin with one dollar and goes up to as high as 25 percent of the product’s price. Additionally, if you want to fulfillment by Amazon, in which Amazon warehouses and fulfills your product, in that case you have to pay a listing fee plus typically a few dollars in fulfillment fill, all it depends on the product.
• You are a commodity: If you sell products on Amazon as well as on your own site, you are competing with Amazon directly that can hurt your sales.
• No control over branding: The main cons of selling products on Amazon is that you don’t get more branding options. You have control only on your products photos and text description. All other control is in the hands of Amazon. In other words, everything else is Amazon branded.
  
  

  While purchasing product mostly customers what to know who the vendor of this product is but Amazon disconnect you from the customer, hence does not support your brand.

• You can’t capture buyers’ email addresses or remarket to them: On Amazon, you can’t capture buyer’s email address as amazon do not allow you. On the other hand, if you have your own site, you can simply set up an email newsletter and motivate customers to sign up for it.
• Lack of customer loyalty: When you sell your products on Amazon, customers become loyal to Amazon, not to your brand. So, you can lose the repeat business from them.

EBAY

Advantages:

• Easy of use: eBay has easy to use inventory tools that helps to list products easily on the site.
• Instant access to millions of potential customers: You can instant access to million of potential customers as eBay has approx. 150 million active buyers from across the globe.
• Global Reach: With the help of eBay, we can reach the international market easily.

Disadvantage:

• Fee: On eBay, fee is depending on what you sell and how you sell it. Generally, sellers have to pay 10% of the sale price.
• Favors buyers over sellers: From the last few years, eBay has make it tough for sellers by 180-days return policy and buyers can leave negative reviews even if it is not the seller’s mistake.

ETSY

Advantage:

• Large, targeted customer base: Etsy has more than 40 million active members. So, you can get large customers easily.
• Easy to set up shop: It is very easy to list and advertise products on Etsy.

Disadvantage:

• Fees: You have to pay listing fee, final sale fee as well as PayPal processing fee at Etsy.
• Little or no ability to customize or personalize your shop: On Etsy, there is a limit how much personalize a customer can do. On other side, you can make it much better for your customers at your own website.

STANDALONE ECOMMERCE SITE

Advantage:

• Access to customer information: You can get all information of your customer for future communication if you have your own website for product listing.
• Capability to run promotions/offer discounts: The main advantage of listing your product on your own website is that you can easily show discount rules/offers like Buy One Get One Free, $5 off on Item etc. You can also easily add and modify your promotions.

Disadvantage:

• Lack of visibility: If you list your products on Amazon, eBay and Etsy, it makes a more chance of visibility of your product for possible customers. You need not to pay anything for advertise.
  
  

  On the other hand, your own website can take months to shows up on a search engine. You also need to advertise otherwise it can be hard for customers to find you.

• Time consuming and expensive: It can be very expensive and time consuming when you manage and marketing your own site.

Conclusion: In our opinion, if you are new online seller then you should start off on marketplace to learn of the business and gain potential customers. Also, if you don’t have much experience with a website in the beginning of business, so you should take shortcut and set up your products on Amazon, eBay and Etsy.