Selling online on marketplaces or your own webshop?

3D Visuals 10

 

Speed and convenience reign supreme in today’s consumer landscape, with large marketplaces like Amazon catering to these consumer demands. These giants have extensive reach and offer an all-in-one shopping experience. In contrast, smaller, independent online shops are battling for visibility and conversion. An interesting battle to take a closer look at.

Marketplaces: the powerhouses

The success of big marketplaces is undeniable. Here are a few reasons why they’re such powerhouses:

  • Reach and visibility: with millions of visitors daily, platforms like Amazon give sellers access to a massive customer base.
  • Convenience and trust: everything from payment to customer service is streamlined. Moreover, large marketplaces enjoy high levels of consumer trust.
  • International expansion: these platforms simplify international selling, often handle logistics (Amazon FBA), and assist with local VAT compliance.

 

But at what cost?

  • Competition and margins: You’re competing against thousands, often in a race-to-the-bottom pricing that narrows your margins. Most marketplaces charge for product listings, so you’ll incur costs before making a single sale. There’s also often a commission on each transaction.
  • Dependency: Your business operations rely on the marketplace’s rules and whims.

 

Perhaps your own webshop?

Facing the Goliaths of the e-commerce world are the Davids – the independent webshops. Having your own webshop has its pros and cons.

  • Uniqueness and branding: independent shops have the freedom to tell their brand story, build customer loyalty, and differentiate themselves with unique products. You can analyze customer behavior and conduct relevant marketing activities.
  • Control over operations: they have full control over inventory, pricing, and profit margins, free from external commissions.
  • Customer relationships: direct contact with customers means better service and direct feedback.

The downside is that you sacrifice visibility. Without the natural traffic of a marketplace, you need to invest wisely in marketing with an independent webshop. You also face the challenge of managing your distribution and navigating the complexity of international regulations and VAT obligations within Europe.

  • Success example story: Consider the example of an artisanal coffee seller from Portugal. By focusing on product quality, an engaging brand story, and excellent customer service, they’ve built a loyal customer base willing to pay premium prices. They might not have achieved this success on the same scale within a competitive marketplace’s constraints.

 

Conclusion: choose one or combine?

Interestingly, some sellers opt for a hybrid approach. They leverage the visibility of marketplaces and then divert traffic to their own webshops for repeat purchases. Sounds pretty handy, doesn’t it?

Choosing between joining a large marketplace or investing in your own webshop isn’t black and white. It all depends on your business capabilities, strategic objectives, and the nature of your products. Running your shop requires a thorough understanding of your customers, constant optimization of your offerings, and a keen eye on your margins, especially when considering the complexity of international VAT rules and cross-border logistics. On the other hand, while marketplaces offer a vast audience and simplified logistics, they can overshadow your brand identity and squeeze your profits. So, what do you prefer?

 

Table of contents
Most read articles

Scale up in Europe without the legal burdens? Let us take care of your VAT and EPR compliance.