It is not David vs Goliath. It is not Rocky vs Drago. It is not Barcelona vs Real Madrid. Although it could well be considered the great battle of the digital era.
Online Store vs Marketplace, that is the question.
There is a lot of talk in the online world about which of these two ways of selling is the best to be successful in ecommerce.
In this guide we will try to shed light on their most hidden secrets in order to make clear the advantages and disadvantages of each of these business models.
It is not about picking sides with one or the other.
It is about giving you all the tools you need to make a decision when starting your way in this fascinating world.
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Advantages:
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Advantages:
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Disadvantages:
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Disadvantages:
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It could be the perfect option if you want to combine a store selling products, services and information through the use of a blog |
Ideal if you are looking for a stable business with which you can combine a full-time job and leave it on autopilot |
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Best CMS:
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Best marketplaces:
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Beeping will help you boost your sales through its merchandise storage system, logistics and cash on delivery service |
With Beeping you can manage your merchandise and send it to Amazon's warehouses to get the most out of their Amazon FBA program |
What is an online store?
Using a simple definition, we could say that an online store is a website where people can buy products from the comfort of their home or using a cell phone.
However, with that definition we would be talking about a store created 15 or 20 years ago.
Today, an online store is much more than that.
The online store is, nowadays, a very important part of an ecommerce strategy.
With an online store you can not only process orders, manage stock, accept payments in different currencies from different parts of the planet or manage the logistics of a package, but also create a community, activate a sequence of emails or even connect it with an informative blog.
The dynamics and constant development of the digital world has also been changing the structure of websites as we used to know them.
Some time ago I wrote an article in this blog in which I clearly show you how many physical stores are considerably expanding their turnover and profits through the digitization of their business.
What’s more, the penetration of business through the internet is so great that, according to the CyberChimps blog, it is expected that in the next 3 years sales through online sites will represent 15.5% of retail sales worldwide.
Advances in technology have changed business processes and feedback. 10 to 15 years ago, the norm was to have a physical store and then transform it into an online store.
While that is still the case, what has begun to emerge is the opposite. That is, stores originally created for the online world have decided to start having an offline presence through physical stores.
Advantages and disadvantages of an online store
Advantages
🤖 Autonomy
If we are discussing the advantages of an online store and, above all, comparing it with a marketplace, autonomy is the main weapon at our disposal.
As the store is managed entirely by you, you can do and undo as you please.
You won’t have to follow general guidelines or a specific order in the creation of products.
For creative entrepreneurs, this will be an ideal environment to develop their full potential.
🔢 Database Management
Another important point is database management. That is, the information you obtain from customers.
Through different tools you can obtain the email address or cell phone number of customers in order to develop a whole charm offensive with the ultimate goal of being able to sell them one of your products or services.
That information can even be used for a launch, to send weekly information or to send greetings on a special date.
🧔🏻 Personalized user experience
UX is a very fashionable term nowadays and it has to do with user experience. In other words, the online store must be adapted to their needs with the sole objective of making the customer make a purchase in a pleasant environment that makes them feel comfortable and gives them a sense of confidence.
This is a very important point since the software of your store will be able to select what to show according to the intention or the searches made by the user.
In addition, you can offer alternatives, added products or even similar items, which will also increase the average purchase ticket of the store.
😎 No competition
Another of the great advantages of an online store is that as it is your own space, you will not run the risk of your potential customer deciding to buy a competitor’s item.
Although it may seem a minor point, marketplaces are flooded with offers and opportunities for items similar to those that your store can offer and, of course, that is a danger that you will not have using your own online store.
🔃 Retargeting or remarketing
Retargeting is the possibility of making an impact with an advertisement on a customer who already knows your brand or who has performed an action within your store.
This is another important benefit that you can take advantage of through ad tools such as Facebook Ads or TikTok Ads.
It is a way to remind that potential customer that your brand is there and has the product they need at their fingertips.
🔜 Scalability
By having full control of your online store’s actions, you are the one who can decide how far to scale the store.
You will not be subject either to the number of monthly searches or the logical limitation generated by competition with other sellers in a marketplace.
💰 Lower commission costs
An online store generates a lower commission per sale compared to a marketplace.
The difference between the two can be up to 10% depending on the niche and the platform.
This is a very important aspect to take into account as it will allow you to play a little more with prices and also be more competitive than in a traditional marketplace.
Disadvantages
🔎 Organic traffic generation
One of the main disadvantages that you will have when setting up an online store will be the generation of organic traffic.
Organic traffic is that which is generated naturally through the positioning of keywords within search engines such as Google.
Commonly called SEO (Search Engine Optimization), it is the most stable and free way to get visitors to the store.
The main problem is that generating that traffic requires the work of a specialized person or agency and, above all, time.
📊 Instability
Related to traffic generation, instability is another negative factor when it comes to having an online store.
This is especially true if you base your strategy on the use of paid advertising such as Facebook Ads or TikTok Ads.
With the risk of receiving bans or suspensions in advertising accounts, visitors will also stop coming to your store, so it is essential that while you grow through paid traffic, you develop an SEO strategy with which you can generate traffic organically.
🚛 Logistics
Order delivery is often a real headache. Especially on key dates such as Mother’s Day, Father’s Day, Christmas, Black Friday or Cyber Monday, delays are always the norm.
For this reason, it is very important to have additional services that can solve this problem. Later on we discuss Beeping and how it can become a great solution to one of the most common problems of a digital store.
📃 Lack of knowledge of the legislation
Many of the entrepreneurs who are starting out in ecommerce do not know the different pages that are obligatory in their own store.
Privacy policies, legal notice, data processing, cookies policy and terms of service are just some of them.
For you to take this into account, I have prepared an e-book that you can download in order to have all this information standardized and be able to use it in your own ecommerce business.
Each of the policies is prepared by specialized lawyers, so you will simply have to change the sample data for your own and then they will be ready to be published in the store.
⌛ Larger time investment
Keeping an ecommerce business alive is easy, the problem lies in doing so efficiently.
It is very common that, in the beginning, all those entrepreneurs who run an online store are a real one-man band.
You must learn to manage finances, establish sales and digital marketing strategies, manage stock, prepare orders and even provide customer service.
All that stress and time invested often makes you lose focus on cyclical issues that do not allow the normal development of the store.
When to choose an online store versus a marketplace
One of the most recurring questions you may ask yourself when choosing how to start your ecommerce journey is which of the two business models to start with.
Although there are plenty of success stories in each model, the truth is that the first thing you should do is to establish your business objective.
Are you only going to sell physical products or will you also provide a service to your customers?
From this question, you will have your answers.
Starting with the most obvious, if your business includes a service in addition to physical products, it is best to start with an online store.
The reason is very simple: none of the current marketplaces offers the possibility of combining the sale of products with a service.
Another point to consider is the way you want to manage your business.
If you are a person who likes to run the business “your way”, then the online store will be the perfect option for you.
The main reason is that you will have complete control of your store and you will be the one who can set the rules as well as the handling and shipping times of the products without the risk of being banned or terminated, as is the case in a marketplace.
Best CMS for an online store
First of all, let me explain what a CMS is.
A CMS is a Content Management System or software that will allow you to publish and manage all aspects of your online store.
From the creation of products, the configuration of payment methods and shipping methods, as well as everything related to the visual appearance.
That said, I will present the best options for you to set up your online store.
Shopify is the best solution today if you want to set up an online store to sell products.
Mainly because you don’t need to have programming knowledge and because its interface is very friendly for all types of users.
In addition, it has a large number of additional applications with which you can perfectly fulfill all the features of your business.
It is compatible with almost all payment gateways as well as with stock management software such as the one offered by Beeping.
Some time ago I created a video course in which I showed you step by step how to set up a Shopify store from scratch and have it ready in 4 hours.
Although this platform costs 27€ per month, I suggest you sign up with my exclusive offer so you can start your store at practically zero cost.
Woocommerce is not only compatible with Beeping software, but it is also the ecommerce platform of WordPress, the world’s largest blog manager.
While its store customization possibilities are greater than Shopify’s and is even free, it is also true that in order to take full advantage of its full potential you need to have programming skills to install its various applications and features.
Apart from this, it must be acknowledged that it is another of the very good options that exist today in the market.