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E-commerce platform or marketplace? The ultimate guide to online success

E-commerce platform or marketplace? The ultimate guide to online success

Who does not sell online? In today’s very competitive business world, being able to sell your products and services online is a must as online shopping has become a habit, if not an instinct.

Retail e-commerce sales worldwide in 2020 amounted to 4.28 trillion US dollars and e-retail revenues are projected to grow to 5.4 trillion US dollars in 2022.


Now, the question becomes where and how to list products and services online. As a business owner, you may choose from creating your own online store using a customizable e-commerce platform like Shopify or selling on one-size-fits-all marketplaces such as Amazon and eBay. Which one should you go for? SleekFlow is here to help you make the right decision.

What is an e-commerce platform?

An e-commerce platform is a software application that allows businesses to manage their website, marketing, sales and operations. Shopify, which powers millions of merchants in more than 175 countries, is one the most renowned e-commerce platforms. Wix, BigCommerce, Squarespace, and WooCommerce are other big names in the field.

ecommerce platform shopify

Want to create an e-commerce store today? Check out the 10 best e-commerce platforms.

What is a marketplace?

An online marketplace is also where businesses reach customers and sell products and services but in a much simpler way. All you need to do is to create an account on the marketplace and start listing using the existing infrastructure. Apart from Amazon and eBay, Etsy and Alibaba are some of the other popular marketplaces.


Want to sell on Facebook? Check out the ultimate guide to sell and reach customers on Facebook Marketplace.

E-commerce platform VS marketplace: What are the differences?

One of the most distinguished differences between an e-commerce platform and a marketplace is the number of stores its website houses. When you use an e-commerce platform to create an e-commerce website, it only consists of your store. But if you decide to sell on a marketplace, you will be facing thousands of competitors on the exact same site.

Here is a breakdown of how they function in different ways in terms of traffic, marketing, inventory, cost and time:

E-commerce platformsMarketplaces
TrafficThe store owner needs to attract traffic to the website.They usually attract more traffic and audience engagement.
MarketingThe store owner needs to take care of lead generation.They attract, nurture and engage leads on the site.
InventoryThey keep inventory.They do not keep inventory.
CostThey involve fees for hosting or maintaining sites.They charge commissions but have low costs upon setting up.
TimeThey require the owner to set up the entire site which can be time-consuming.They are quick to set up.

Benefits of e-commerce platform

1. It allows complete control over the site

Setting up your own e-commerce website does not necessarily mean you have to build everything from scratch as B2C or B2B e-commerce platforms usually offer templates for business owners to kick start. However, if you are an experienced coder, you may choose to utilize your skills and knowledge and design your own site.

With complete control over site functionality, design and navigation, you can customize your site to provide the best user experience. You may also integrate with available tools in the market to boost sales or engage customers such as adding a live chat widget to provide instant customer support.

2. It enables businesses to build their own brand awareness

In the crowded online market with fierce competition, brand awareness is vital to make your business stand out. When customers are browsing on a marketplace, they tend to remember the marketplace instead of the brand, which makes it more difficult for business owners to gain repeat customers.

Selling on an e-commerce website is a different story. It allows you to have the full autonomy to create your own style, whether it is the tone and voice or the visual elements, and make people recognize your brand. It creates uniqueness and differentiates your business. In addition, there will not be any “recommended products” from competitors to distract your visitors.

3. It facilitates the easy collection of customer data for future marketing

While marketplaces have restricted access to customer analytics, e-commerce sites enable owners to collect data and reach out to customers in the most direct way. It comes in handy when you want to dive deeper into the data to analyze customer behaviors for a better understanding and optimize your website’s customer experience.

One of the strengths of an e-commerce website is the ability to retarget your customers, whether it is the people who visit your site with ads or those who have made the purchase. There are also tools available for you to send automated messages to customers who abandon their shopping carts.

Want to send an automated abandoned cart reminder? Check out what you can do with your Shopify store.

shopping cart

Benefits of marketplace

1. It has more traffic and audience engagement

Listing on a marketplace is one of the easiest ways to reach a significant number of potential customers. Marketplaces are designed to connect buyers and sellers together and one of the key metrics to determine their success is the traffic that they can bring. Therefore, it becomes their job to attract customers and encourage purchases.

Marketplaces are the guarantee of traffic and audience engagement, especially those mega-sized ones. Take Amazon as an example. The number of paying Amazon Prime members worldwide reaches 200 million in 2020, with more than 10.19B AMZN shares outstanding, which means selling on Amazon allows businesses to showcase their products and services to millions of Internet users, potentially bringing in more revenue for you.

2. It is quick and easy to set up

You do not need any technical knowledge to start selling on marketplaces. Marketplaces have their own experts to develop and maintain the platform and they have everything ready for business owners like you. All you need to do is create an account and start adding your products.

"For Amazon, you can utilize SEO tools such as Helium 10 to further enhance your product listings. These tools provide insights into keyword optimization, competitor analysis, and performance tracking, helping you stand out and increase the visibility of your products.

3. It has low or no costs upon setting up

Developing an e-commerce website can be costly. Think about the fees that you need to pay to the platform and the cost to hire web developers and designers if you need a team of experts to do the job. On the contrary, marketplaces help you save the hiring costs.

Marketplaces charge you fees, but usually at a lower rate at the beginning. For instance, eBay charges 10-15% of the final value once your item sells while Amazon charges Individual plan subscribers $0.99 per item sold plus additional selling fees.

woman shopping

How to choose between an e-commerce platform and a marketplace?

Every coin has two sides. Before you start building your e-commerce store, weighing the pros and cons is the very first step. Below are some questions that you may want to consider when making your final decision:

1. Do you have limited resources or technical knowledge?

As mentioned above, one of the key differences between an e-commerce platform and a marketplace is the cost involved. Selling on a marketplace requires no technical knowledge and the setup cost is relatively low. If you are running a small business with limited resources, a marketplace may be a better choice for you.

But if you have the technical skills or you can afford to hire a team of experts to maintain your site, you may want to set up the store using an e-commerce platform to save additional costs. Fees and commissions that come with each transaction on marketplaces will limit your profit margins and as your e-business scales up, the costs may add up to a significant amount.

2. Is your business a well-recognized brand?

If you are already a well-known brand, you do not have to worry too much about attracting traffic. That is why setting up your own e-commerce website can be a way to go. It also allows you to build brand awareness and nurture your own community. 

But if it is not the case, a marketplace may help you bring more traffic at the early stage so you can focus on other areas of your business.

3. Do you plan to market your products using the data and contact information of customers?

There are numerous ways for you to market your products online. Whether it is on an e-commerce platform or on a marketplace, you can attract a wide range of buyers with search engine optimization (SEO), sponsored ads, social media posting, or influencer partnership.

For those who want to run successful email marketing campaigns, you may consider setting up an e-commerce website. It allows you to send out a post-purchase follow-up to ask them to write a review of your product or an abandoned shopping cart reminder to offer assistance.

women looking at the laptop

Secret tip to maximize your e-commerce sales

No matter you are setting up an e-commerce website or starting your business on Facebook or Instagram, it is likely that you will need to manage more than one customer communication channel. Here is where SleekFlow can step in and make a huge difference.

SleekFlow, an omnichannel social commerce platform, allows businesses to communicate with customers across different channels simultaneously. It helps shorten your response time and ensure your customers receive prompt support.

The response time has become much shorter (after we use SleekFlow). At the same time, we will not miss messages anymore. This elevates customer satisfaction.

Cheuk Ying Wong

Founder, Weirdo Beauty

What SleekFlow can do:

  • integrate all the messaging channels, including WhatsApp, into one place to provide efficient customer support in real-time;

  • enable multiple logins to team up with colleagues and boost productivity instantly;

  • assign conversations automatically to co-workers for immediate assistance;

  • categorize contacts to launch targeted marketing campaign;

  • add Live Chat widget plus customer form to generate leads.

Now, SleekFlow has upgraded customer relationship display to reinforce your e-commerce ecosystem. With Shopify integration, you can:

  • show purchase history and order status alongside the chatroom; and

  • automate messages upon customers’ actions on Shopify

Want to step up your e-commerce game?

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