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When starting an online business, you must determine what platform you will use to sell products. Many people choose the marketplace as a platform for doing business because of the convenience it offers. On the other hand, quite a few also advise business people to have an online sales website to show professionalism.
Website vs marketplace, which one should you choose? This question often haunts business owners who want to sell products or services offered online. Indeed, both have their own advantages and disadvantages for selling.
Fortunately, you don't need to bother thinking about the answer yourself. Through this article, we will help you find a comparison of marketplaces and websites. That way, you can easily decide which one is more suitable for your business.
So which is better for an online business, an online shop website or a marketplace? Below are the advantages and disadvantages of each platform that you can consider before making a decision.
Comparison of Websites and Marketplaces
A marketplace is a platform, either in the form of a website or application, which is managed by a company to facilitate sellers and buyers meeting online. For example, a marketplace is like a market filled with business people who sell various types of merchandise in the same location.
New business people who want to sell their products online may still be confused. Which is better, selling products on a personal website or a marketplace?
Let's look at the complete discussion below so that you can more easily consider the pros and cons of promoting products on websites vs marketplaces. Here's a comparison between a website and a marketplace:
1. Competitors
The first comparison of websites vs marketplaces is in terms of market competition. Just like in traditional markets, you will find many business people selling the same products as you. So, the competition with competitors in a marketplace is very high.
Moreover, the marketplace displays products from various shops and brands at the same time according to the keywords written by consumers in the search column. So, you have to be able to compete on price, quality, security of packaging, and speed of delivery.
Well, this very tight competition is a disadvantage of the marketplace which makes it difficult for you to find buyers because there are so many choices for potential consumers.
Comparison Results:
Business competition in the marketplace is tighter because all competitors will appear at the same time when potential buyers are looking for a product.
2. Management
One of the advantages of the marketplace is that your shop is equipped with various important features. Examples include product images, description columns, and review columns. But, what if you want to change the design and layout of your store? Or maybe you want to add new features to it?
Unfortunately, these are all marketplace drawbacks that you need to consider. Without these features, you cannot make your shop more interesting and interactive. But don't worry, you can still manage the design and features of your shop on the website!
Creating an online shop website is also not a difficult thing. Moreover, now there are Content Management Systems like WordPress which make it easy for you to build a website instantly.
With WordPress, you can install themes to change the design and layout of your online store. Apart from that, you can also install plugins to provide various interesting features to it. In essence, make sure the design and features installed suit your business needs.
Comparison Results:
Managing stock and product details on the marketplace is easier thanks to the features that are already available, but you cannot freely adjust the appearance and other features that are not provided.
3. Building Relationships with Consumers
The next comparison of websites vs marketplaces is about how to build relationships with consumers. In the marketplace, you can build relationships with consumers. However, the methods are very limited. Because you can only contact them via chat.
On the other hand, on online shop websites, you are free to interact with buyers in any way, such as:
- Install the live chat feature.
- Offer visitors to subscribe to emails to get the latest promo info.
- Direct visitors to social media accounts.
That way, you can more easily build relationships with customers or potential consumers.
Comparison Results:
In terms of building relationships with customers, both are equally easy, but you can implement more marketing strategies with websites such as email and newsletters.
4. Cost
Transaction costs are one of the most important parts of online business. Usually, these costs consist of shipping costs, warranty costs, and administration costs. If the costs incurred do not match the buyer's expectations, they may switch to competitors.
Unfortunately, you cannot set transaction fees flexibly on the marketplace. Because, of course you have to follow the marketplace platform policies regarding fee structures.
The main difference between a marketplace vs a website is that with a website you are free to determine the transaction costs. Usually, marketplaces have administration fees that are charged to both sellers and buyers for each transaction.
Unlike using a website, profits from buying and selling activities that you carry out will not be free from administration fees. Of course, this is a win-win solution for you and potential buyers.
Comparison Results:
Transaction fees are usually charged per order, and must follow marketplace policies. With a website, you are free of admin fees or transaction fees and can manage it yourself.
When Should You Use a Website or Marketplace?
If you plan to sell products online, there are two options available, namely: marketplace vs website. To be more confident in your choice, we have summarized each of the advantages that websites and marketplaces have.
Here are the advantages of websites and marketplaces that you need to know:
1. Advantages of Online Shop Websites
a. Full Control
By having an online shop website, you have full control over the platform, from design, navigation, catalog display, to the consumer shopping experience. You can regularly update your business website according to the campaign or promo that you are running. This allows you to design a shopping experience and a more personalized approach for consumers.
b. More Freedom to Do Branding
On the online shop website, you can build your brand freely. You can adjust the appearance of your website starting from colors, writing, and so on to suit the image or persona you want to present for your business. For example, if you sell women's fashion products, you can design the front page of your website with feminine colors.
By having strong branding, target consumers will more easily remember your business. Moreover, currently there are many e-commerce website creation services that offer flexible designs with basic templates that can be personalized and integrated with other channels. You will also find it easier to build awareness.
c. Can Access Consumer Information
If on the marketplace you cannot retrieve data regarding consumer behavior and shopping habits, on the online shop website you can access this information. From this data, you can analyze which strategies are successful and which are not, which products are most liked by consumers and which are least liked.
So you can develop your business based on valid data and plan the right marketing strategy for the future.
d. Not Dependent on Other Parties
By having your own online sales website, you don't depend on other platforms. Not just for sales, but also for your entire business. If you only sell on the marketplace, for example, when the marketplace is experiencing disruption your sales will certainly be affected.
Moreover, business payment methods on the marketplace depend on the methods provided by the marketplace. Meanwhile, on your own website, you can decide according to your needs and consumer behavior. Therefore, an online shop website plays an important role in the long term of your business.
2. Disadvantages of Online Store Websites
a. Requires Capital
One of the reasons many business people start from a marketplace is because it requires a fair amount of capital to create an online sales website, especially when compared to selling on a marketplace which can be started without requiring capital. To create a website, you need to buy a domain name and pay design fees. Then when your business grows, you will also need to upgrade your sales website.
b. Good Management is Required
Just like having a physical shop, having your own online sales platform means you also have to be able to manage it well, starting from the server, payment system, speed and other technical things. You must be able to ensure that every page on your online shop website can be accessed.
When you release a new product, for example, you must be able to organize the product catalog well so that consumers can browse comfortably. To ensure everything runs smoothly, you should take the time to check your sales website regularly.
c. A Strategy is Required to Reach Consumers
In contrast to marketplaces where the market has already been formed, you need to implement a number of strategies to reach consumers. You can't just leave your sales website alone because it will be difficult for you to get traffic.
To increase traffic, ranking, and ultimately sales, you need to develop a strategy and allocate a budget, for example implementing an SEO strategy and creating content. When you already have high enough traffic, you need to provide fast customer service such as a chatbot to serve questions from visitors.
3. Advantages of Marketplaces
a. Easier to Get Started
In the marketplace, you don't need to start everything from scratch like on an online shop website because all the systems and templates are already available. You as a businessman only need to register and start selling. How to register is relatively easy. Most marketplaces only ask you to fill in your name, email and cellphone number to register. In just a few minutes, you can create your own online shop.
b. Doesn't require large capital
Apart from being easy, starting to sell on the marketplace also doesn't require a lot of capital. In fact, you can get started for free. If you want to upgrade your stall, marketplaces usually charge a service fee. Tokopedia, for example, charges a service fee of 1% for each product sold. On average, marketplaces also offer various advertising prices so you can adjust them to your budget.
c. There's a Market Already
Marketplace is a trusted sales platform. This means that there are already thousands of consumers who are comfortable and accustomed to shopping through this platform.
So, you don't need to bother implementing various strategies to make your shop known because basically the name of the marketplace is what buyers will remember. This will certainly help those of you who are just starting a business. Therefore, choose a marketplace that is credible and trustworthy.
d. Large Choice of Programs and Features
Marketplace has regular programs that you can take part in, such as free shipping promos, Harbolnas, and many more. Apart from that, the marketplace also has features that can help increase your sales such as Star Seller on Shopee or Power Merchant on Tokopedia, feeds features, ads, and many more.
They also certainly implement various strategies to continue to increase the number of people who shop via their site or application so that you just have to make optimal use of the features provided.
4. Marketplace Disadvantages
a. High Competition Level
One of the biggest challenges selling on the marketplace is the high level of competition. There will be many other shops selling products similar to what you are selling. In the midst of so many online stores, it will be more difficult for your product to stand out.
What's more, in the marketplace visitors will only see photos and prices of your products. Unless they click on the image, they won't know the details of the product or who is selling it. This means that your sales really depend on photo quality and price competition.
b. Low Awareness Level
Another disadvantage of the marketplace is that it will be difficult for you to build awareness of your brand. Again, because visitors can't see your store profile unless they click on an image or visit your store in person, it will be more difficult for you to highlight your brand.
Moreover, the space to personalize stalls in the marketplace is also limited. You can only do branding through your shop profile such as banners, descriptions and feeds while the main marketplace appearance will always be the same for all visitors.
Even people who buy your product don't necessarily know the existence of your brand because basically buyers focus more on the product they buy and not who the seller is. This can be a challenge for you to build customer loyalty.
c. More Difficult to Analyze the Market
Because visitor and buyer data is completely owned by the marketplace, you do not have complete access to consumer shopping patterns. As a result, you don't have a customer list so you can't analyze consumer behavior in detail. Even though from there you can find out the right strategy to develop your product and business.
Both marketplaces and online shop websites have their respective advantages and disadvantages, it all comes back to your business needs. In fact, you can integrate the two to maximize sales. For example, you can put a link to an online sales website on your stall profile in the marketplace. Vice versa, you can connect your stall to your sales website.
Marketplace vs Website, So Which One to Choose?
At this point, you already know the advantages and disadvantages of websites and marketplaces. By understanding the differences between websites and marketplaces, you can make the right decision for your business.
Marketplaces do offer broad exposure. However, creating a website has more advantages than just selling through the marketplace. For example, the ease of managing an online shop and greater profits from selling in the marketplace.
However, you won't be able to feel all the advantages of an online shop website if the website is difficult to access. Because, a website that takes a long time to load will definitely make consumers run away and not want to come back again. Therefore, make sure you provide your website with quality hosting service support.