In 2021, selling online and online shopping is nothing new in Singapore. Carousell, eBay, Qoo10, and Shopee—it’s hard to remember what it was like before these and other marketplace giants made it possible to get any item shipped directly to our doorsteps!
eCommerce Websites vs Marketplaces
From the seller’s point of view, there are many eCommerce websites and marketplace options to choose from. However, this choice seems equally difficult to make, especially for business owners with no previous online sales experience.
There are many options for selling online. You can start selling in existing marketplaces, or you can invest in developing an eCommerce website. If you are not sure which option you should go for, keep reading. This post will help you make the right decision.
First Thing’s First: What Is a Marketplace?
An online marketplace is a website that includes presents products from a ton of sellers to shoppers. The most popular marketplaces in Singapore are Shopee, Lazada, Qoo10, and Amazon Singapore. You can create a seller account and start selling your products immediately.
The marketplace itself does not belong to the seller. It belongs to the company that created it. The sellers need to ‘rent’ a shop page from the company to start selling in the marketplace, just like City Square Mall and Bedok Marketplace do in real life.
What is the process of selling in an online marketplace? Let’s take the popular online marketplace Shopee as an example.
Shopee maintains a website, invests time and money to attract potential customers to increase the website’s traffic, and provides secure shopping and payment processes.
However, once the sale is completed, Shoppe doesn’t ship the product itself; all items are stored and sent by the sellers.
Now, how does the marketplace make money? As you might have guessed, it either charges sellers a fixed membership fee, a fee per transaction, or a combination of the two.
What is an eCommerce Website?
An eCommerce website is an online store that belongs to a single seller (your specific business or brand). You can use SaaS or open-source eCommerce platforms to develop an eCommerce website.
This option also provides you with the opportunity to carry out marketing activities and build customer loyalty. Because the website belongs to the seller, only two parties are involved in the sales process: the seller and the buyer.
Sounds complicated? It doesn’t have to be! Building your own online store (aka, eCommerce website) does not mean you have to know how to code or program. Many eCommerce platforms offer a variety of predefined functions and templates to choose from.
The top three eCommerce platforms we recommend are EasyStore, WooCommerce, and Shopify. Comparing them is far beyond the scope of this article, but we will have a comprehensive breakdown of each platform in our next article.
Which One to Choose?
It may be difficult to choose between these two online sales methods. Why? Because on the one hand, building an eCommerce website requires some investment, and you can sell in a market for free.
On the other hand, competition among sellers in a marketplace is fierce, and marketplaces do not provide the same branding and personalisation opportunities as eCommerce websites.
Below we have collected the pros and cons of selling products through marketplace platforms and eCommerce websites.
Online marketplaces are not for everyone. The world’s marketplace giants such as Amazon, Wal-Mart, and eBay have taken advantage of the ease of setup and brand recognition they have established in online sales.
Below are the benefits of how these marketplaces bring to small business and home business sellers.
- No technical experience or marketing resources required
- Easy to start right away
- No website or server maintenance required
- A huge customer base
- Existing brand familiarity
- Multiple competing brands on the same website
- Customers may never realise your or your brand’s existence
- Can’t build a customer list to market to in the future
- Commission charged for each sale (fee varies from site to site)
- Restrictive terms and conditions on how to communicate with customers.
eCommerce Website Pros
- Full control of website functionality, design, and navigation
- Collect customer data for future marketing
- No on-site competition
- Build your own brand recognition
- No reliance on another company’s fee structure and pricing
- Fewer sales restrictions and rules
eCommerce Website Cons
- High start-up costs (web hosting fees, eCommerce platform subscription fees, payment gateway subscription fees)
- Need for a comprehensive marketing plan and budget to bring traffic, improve search engine rankings, and make sales
- Low traffic can also mean high competition
As you can see, both options have their unique advantages and disadvantages. But don’t panic! We will not leave you behind without providing solutions and hope.
The Solutions Is … Both!
Both options have their advantages and disadvantages, and the best way to choose between them is to choose both. That’s where multichannel selling comes in.
Multichannel selling is a strategy for listing your products on online marketplaces to get large audiences, leading the marketplace shoppers to your eCommerce website, letting them become your customers, and converting them into loyal customers.
The sooner you do this, the more potential income you will earn in the future. The customer database is also in your hand, so you can remarket to them. Customer databases are business gold, after all.
Multichannel Sales Pros
- Increase customer reach
- Have a backup plan in case anything goes wrong
- Provide customers with a convenient shopping experience
- Better understand your audience
- Increase sales during peak spending periods (11/11, 12/12, Black Monday)
Most eCommerce platforms have marketplace integration, allowing sellers to sell their goods in a marketplace (Shopee, Lazada, Facebook Marketplace, etc.) and manage orders in their eCommerce website management dashboard.
This combination is common among EasyStore users.
Marketplaces are a great starting point for eCommerce beginners because they allow you to reduce the cost, risk, and time required to create an eCommerce website.
However, if you are a mature brand and do not want to share your revenue with a marketplace or need tailormade solutions to perfectly meet your customers’ needs, then creating your own eCommerce website may be your best choice.
With a new plug-in, there is no need to decide where to sell. eCommerce platform integration allows products to be released on your eCommerce website and in the most popular marketplaces.
Being able to list in marketplaces is a great solution for those who want to make substantial profits while developing their brand.
Without a doubt, expanding your online business is a challenge, but it is definitely worth a try.
If you are looking for a team for eCommerce website design and marketplace integration, we are here to help. Submit your project details in the contact form here, and we will contact you as soon as possible.
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