So, you want to start an ecommerce business. Should you build your own online store, or sell your products on Amazon?
Whoa — not so fast! We’re happy to tell you that there are far more options than those two seemingly opposite paths to success (and many, many ecommerce businesses go both ways)! ShipMonk alone integrates with over seventy (seventy!) different shopping carts and marketplaces. That’s a lot to choose from. Take a seat as we explore the differences between ecommerce stores and ecommerce marketplaces, and list the pros and cons of each.
Table of Contents:
What is an Ecommerce Store?
An ecommerce store is a branded website where products from a single seller can be purchased over the internet. Payments are processed electronically and sent to the seller. Orders are transmitted to the seller’s fulfillment center or a third-party logistics (3PL) provider, where the physical products are picked, packed and shipped to the customer.
Building an online storefront can be as simple as adding an open-source shopping cart plugin, such as WooCommerce, to your WordPress website, or as complex as a custom-coded ecommerce platform like BestBuy.com. For those ecommerce brands that fall somewhere in the middle, there are dozens of third-party ecommerce store builders, such as Shopify and Squarespace, with design templates, drag-and-drop capabilities, and built-in features that will have you up and running in no time.
Pros and Cons of Building an Online Store
When you build your own ecommerce store, whether from a template or from scratch, you’re building your own space on the internet that you and your products can call home. You have control over what it looks like, the user experience, navigation and search, how your products will be displayed, and what promotions you’ll offer and so much more. But building an online store is a lot of work, and once built, requires constant maintenance. The successes are all yours, but so are the failures.
- You have full control of your brand image, pricing, and merchandising. If you’re building your ecommerce store from scratch, you can customize it any way you like.
- You have a direct relationship with your customers. You can build a customer list (a valuable asset if you ever sell your company), engage with those customers, and learn from collected data on their shopping behavior.
- Paid advertising and search results can link directly to your storefront.
- No sales/marketplace fees.
- You can use branded packaging to create a delightful unboxing experience.
- You can engage in cross-sell and upsell strategies to increase average order value.
- You have control over inventory management and post-purchase operations, including fulfillment, returns, and customer service.
- Building a web store is a huge undertaking even when using an ecommerce store builder. Building an online store from scratch is incredibly complex and requires a dedicated team of developers.
- It can be a big financial investment, depending on how you go about it.
- Like any retail operation, online stores require constant maintenance.
- You are responsible for building traffic to the web store.
- You are responsible for inventory management and post-purchase operations, including fulfillment, returns, and customer service.
Ecommerce Store Builders and Shopping Cart Options
For ecommerce business owners who want to go the ecommerce storefront route, there is plenty of help available. Some website builders, like WordPress or GoDaddy, offer simple plugins to make them shoppable. Open-source shopping platforms start free and are somewhat customizable. More features are available with upgraded plans. The next step up would be an easy drag-and-drop storefront builder, like Shopify or Squarespace, which require no tech experience, just a thorough knowledge of your product selection and great photography. SaaS (software as a service) platforms come with lots of help and advanced features. Large retailers with deep pockets and household names may decide to hire a development team to custom-code their own websites.
This is a by-no-means-complete list of our storefront integration partners and other third-party ecommerce software vendors.
Americommerce — ecommerce platform for B2B brands
Big Cartel — storefront builder for artists and makers
BigCommerce — storefront builder for enterprise-level companies
Cratejoy — storefront builder for subscription-based businesses
Ecwid — centralized storefront for multichannel brands
FoxyCart — hosted shopping cart for existing websites
GoDaddy — website builder with store-building capabilities, limited to 1,500 products
Magento (Adobe Commerce) — flexible open-source ecommerce platform for DTC or B2B brands
MijoShop — shopping cart and ecommerce add-on for Joomla websites
Miva — storefront builder for modern B2B brands
Maropost Commerce Cloud (formerly Neto) — ecommerce platform for retailers and wholesalers
OpenCart — free, open-source ecommerce platform
Oxatis — a French-based SaaS platform for ecommerce
PayPal — for small-to-medium businesses with PayPal business accounts
PrestaShop — an open-source ecommerce platform and community
Revolution Parts — ecommerce solutions for auto parts dealers, manufacturers and wholesalers
Shopify — a SaaS platform for small to large ecommerce brands
Shift4Shop (formerly 3dcart) — SaaS ecommerce solution for large retailers who want to move online
Soldsie — a bio link tool that drives traffic from Instagram to a curated, shoppable landing page
UltraCart — a storefront builder or shopping cart plugin with eBay and WordPress integrations
Volusion — a free website and storefront builder with premium upgrades for brands with a large number of products
Square Online (formerly Weebly) — free storefront builder has advanced features with upgrade; works with Square payment system
Squarespace — drag-and-drop website builder with ecommerce functionality when you upgrade
Wix — free website builder with drag-and-drop storefront builder
WooCommerce — open-source storefront builder using a WordPress-based platform or plugin for small to enterprise-level ecommerce
XCart — ecommerce solution for large catalogs, high-volume SKUs, and marketplaces
Zen Cart — free, open-source, customizable shopping cart software
Zoey — storefront builder for B2B brands, wholesalers and distributors
What is an Ecommerce Marketplace?
An ecommerce marketplace is like a huge online shopping mall, where thousands of vendors post their wares and millions of customers come to browse, compare prices, and shop. The competition is fierce, especially for an unknown brand, or a vendor selling the same brands as everyone else.
Amazon, Walmart, eBay and Etsy are all ecommerce marketplaces, but they aren’t the only options. Niche marketplaces catering to certain types of products, such as auto parts or musical instruments, offer a calmer and more efficient experience for vendors to sell and shoppers to buy.
Anyone can sell products on a marketplace as long as you play by their rules. There are prohibited products, and strict requirements to follow for product titles, descriptions and photography. There are also strict receiving requirements for inventory packaging and labeling, and penalties for doing it wrong. Most importantly, a portion of your profits will go toward marketplace fees — that’s the price you pay for gaining access to their huge audiences.
Pros and Cons of Ecommerce Marketplaces
If you decide to sell your wares on an ecommerce marketplace, simply make sure you know the pros and cons, and how to make the most of it. Understand the fees and the plan options, and choose the right marketplace for your products knowing that they will appear side by side with other products in the same category.
On Amazon, for example, if your products have a unique GTIN (Global Trade Item Number) such as its registered UPC, ISBN or EAN, you’ll get your own product listing. But if the GTIN matches fifty other items already for sale on Amazon, only one of those fifty items will appear in the coveted “Buy Now” spot, and it’s usually the Prime-eligible product with the lowest price. All other sellers will appear in the “Other Sellers” link. That’s what you’re up against.
On the other hand, 2 billion visitors per month might make it worth the trouble. If the intense competition of Amazon frightens you, start with a low-level plan and a few products, and build from there. Or look for a niche marketplace that might be a better fit.
- Potential exposure to millions of customers.
- Little-to-no tech expertise is required to set up products for sale on a marketplace.
- If you have a unique product, your chances of standing out in your product category are good.
- A full-service 3PL can handle FBA Prep Services for you, to comply with Amazon’s strict receiving standards.
- You can choose to handle your own fulfillment, shipping and customer service, or turn over your inventory to the marketplace to handle everything.
- Access to optional account services, such as advertising and marketing advice, with premium plans.
- You’ll pay fees for listing your products, as well as fees for each item sold. Each marketplace has its own fee structure.
- If the marketplace is handling inventory and fulfillment, you may be subject to inventory-related surcharges, late fees, or removal fees, in addition to the customary storage and fulfillment costs that you’d pay any fulfillment provider.
- If you’re selling products that are available from several vendors, you’ll be competing with those vendors to be the featured seller in the product listing, based on price and shipping speed alone. You may even be competing with the marketplace’s own private-label brands.
- Promotions and sales may be restricted in length and to certain time periods by the marketplace.
- You have no control over fulfillment or customer service.
- No option for custom or branded packaging.
Ecommerce Marketplace Options
For those ecommerce business owners that want to go the marketplace route, The largest ecommerce marketplaces in the US are Amazon (2B visits per month), eBay (688.9M visits), Walmart (388.8M visits), Etsy (288.4M visits), and Target (175.7M visits). Some marketplaces are geared toward a specific audience (NewEgg for tech, Reverb for musicians, Etsy for handcrafted goods, and so on). Others offer a wide selection of consumer goods (Amazon, Walmart, Target), though you may have to jump through a few hoops to prove that your brand is worthy of a store in their marketplace.
Here is a starter list of ecommerce marketplaces available.
Amazon — the largest U.S. marketplace with 2.5 million products from roughly 30,000 businesses in all categories
Back Market — global marketplace for refurbished tech devices
Bonanza — resellers of new and gently used goods
Cratejoy — marketplace for branded subscription boxes
eBay — resellers of new and gently used goods
Etsy — handcrafted and personalized goods
Groupon Goods — marketplace for local experiences, shops, restaurants, and businesses
Houzz — furniture and home décor
Newegg — tech products
OpenSky — 70,000 independent merchants offer an eclectic shopping experience
Reverb — new, used and vintage musical instruments and music gear
Sears — marketplace for any merchandise category on Sears.com or Kmart.com
Sophio — auto parts
Storenvy — social network for shopping, with “Envies” instead of “Likes” to boost trending products
Target Plus — an invite-only marketplace for third-party sellers who must apply for consideration
Walmart — Walmart, online. Third-party sellers simply create a seller account.
Wish — low-price, mobile-first marketplace for drop-shipping vendors and bargain-hunting buyers
Which is Better?
If your brand offers a unique, quality product that solves a vexing problem, it will probably do well no matter where you launch it. But if you have to choose, a lot depends on your product, the customer you’re trying to reach, and the business owner’s personality. Which of these options sounds better to you? Starting small, perfecting your game, and owning your image? Or jumping in the deep end and swimming with the sharks?
Ecommerce Stores Work Best for:
- Brands that want to build a loyal following
- Brands that want to engage with and learn from customers
- Brands that want to maintain control of the end-to-end customer experience
- Brands that don’t want to compete on price alone
- Brand owners that want to keep every penny of their hard-earned profits
- Brands that can offer a low-cost or free shipping option
Ecommerce Marketplaces Work Best for:
- Sellers and resellers willing to compete on price
- Brands that can promise fast shipping
- Brands with name recognition
- Small-to-medium-size brands that don’t have the capacity or desire to handle fulfillment
- Brands that are willing to accept smaller margins for a chance to swim with the sharks
Choosing Your Ecommerce Platform
The truth is, today’s consumers have so many options for shopping and scrolling that there is no single sales channel that will reach them all. In fact, 70% of consumers visit 2-4 websites before making a purchase. According to a 2022 survey conducted by ChannelAdvisor, when US consumers go online to research products, they begin their product search on:
- Amazon (44%)
- Search Engine (35%)
- Brand Website (10%)
When they go online to buy a product, they begin their search on:
- Amazon (52%)
- Search Engine (29%)
- Brand Website (8%)
These numbers indicate that a branded storefront (which would also show up in search results) and a marketplace presence are both pretty important. That’s why smart brands use multiple sales channels to extend their reach and lower their risk. They can’t afford not to! Keep in mind that you can always start with one or the other, test the waters, and learn as you go.
Two more things before you go:
- Make sure your ecommerce store is optimized for mobile!) Amazon states that over 42 million unique desktop users visit each month, while over 126 million unique visitors are on mobile.
- Before you jump into multichannel sales, make sure your fulfillment center or 3PL can handle multichannel fulfillment, and that their software system consolidates order and inventory management for you. ShipMonk’s industry-leading 3PL software does all of this and more. Plus, we’re experts at multichannel fulfillment including FBA prep and Seller Fulfilled Prime fulfillment, and can help you build a fully integrated tech stack that meets your growing needs.
We hope this comparison of ecommerce stores vs. ecommerce marketplaces helps you take the next step in your ecommerce journey, wherever it leads. We’d love to help you fulfill your ecommerce dreams! Contact us to learn more.