In recent years, online sales have become essential to the success of many businesses. With the expansion of digital commerce, several platforms and ways of conducting transactions over the internet have emerged. Among the most discussed terms in the digital universe are “ecommerce” and “marketplace”. Although many may confuse them, they have very distinct characteristics and offer advantages and disadvantages that should be considered depending on the business model. In this article, we will discover What is the Difference Between Ecommerce and Marketplace, their benefits and when to choose each one.
What is ecommerce?
The term “ecommerce” refers to a virtual store, where a seller or company sells its products or services directly to consumers. Basically, it is an online platform where customers can make purchases without leaving home. Ecommerce is managed by a single entity, which controls the entire sales process, from the presentation of the products to delivery to the end consumer.
Main Features of Ecommerce:
- Exclusive Ownership: In ecommerce, the website is owned and controlled by a single company or individual. This means that all decisions, from website design to marketing strategies, are defined by the store owner.
- Personalization and Total Control: One of the great advantages of ecommerce is total control over the brand and customer experience. It is possible to customize the website, payment options, delivery logistics and even promotional campaigns, offering a unique experience to the consumer.
- Brand Building: Having an ecommerce allows the owner to create a unique identity for the business. All branding, from the store layout to customer service, reflects the company’s values and mission.
- Independent Management of Prices and Products: In ecommerce, the owner has the freedom to set product prices, launch promotions and make changes according to the sales strategy. The company is responsible for all the profits, without the need to share them with third parties.
- Initial Investment and Maintenance: Creating an ecommerce requires an initial investment, both in the development of the store and in its maintenance and digital marketing. In addition, the owner must manage operations, such as logistics, customer service and inventory.
- SEO and Digital Marketing: An e-commerce allows greater control over SEO (Search Engine Optimization) and digital marketing strategies, enabling better website optimization for search engines and targeted campaigns.
What is a Marketplace?
A marketplace, on the other hand, is a platform where multiple sellers can market their products or services. The marketplace platform serves as an intermediary between sellers and consumers, providing a ready-made infrastructure for sales. In other words, it is like an “online shopping mall” that brings together different brands and products in a single location.
Main Features of a Marketplace:
- Multiple Sellers: The main feature of a marketplace is that it houses multiple sellers. Each of these sellers has their own “store” within the marketplace, offering their products to consumers who access the platform.
- Less Control over the Platform: When selling on a marketplace, the merchant does not have full control over the user experience. The layout, sales policies, and interface are managed by the platform owner. The seller simply lists their products and uses the structure provided by the marketplace.
- Fees and Commissions: Marketplaces generally charge commissions on sales made on the platform. These commissions can vary depending on the marketplace and the type of product sold. In addition, some marketplaces may charge membership or usage fees.
- Greater Visibility: One of the great advantages of selling on a marketplace is the existing traffic. Platforms such as Mercado Livre, Amazon and OLX attract millions of visitors per day, offering sellers greater visibility without the need to invest as much in marketing.
- Intense Competition: Since several sellers are listing their products on the same marketplace, competition is fierce. Sellers often compete for the same customers, which can result in a price war and lower profit margins.
- Support and Facilities: Most marketplaces offer comprehensive support to sellers, taking care of logistics, payments and even customer service in some cases. This makes it easier for new sellers to enter the digital market, without the need for large investments in infrastructure.
What is the Key Difference Between Ecommerce and Marketplace
Now that we understand what ecommerce and a marketplace are, let’s compare some key aspects:
- Control and Customization:
- In ecommerce, the owner has full control over the store, from the design to the sales policies.
- In the marketplace, the seller has less control over the presentation of their products and the sales policies, since the platform is controlled by third parties.
- Initial Investment:
- In ecommerce, there is a higher initial investment for the creation and customization of the store, in addition to recurring costs with marketing and maintenance.
- In the marketplace, the initial investment can be lower, since the seller uses a ready-made platform, paying commissions or fees.
- Brand:
- In ecommerce, the company has the opportunity to build its brand and its own identity, controlling the entire customer experience.
- In the marketplace, the company’s brand can be “hidden” behind the brand of the marketplace itself, which can make it difficult to retain customers.
- Visibility:
- An ecommerce needs to actively work on SEO and digital marketing strategies to attract traffic to the website.
- In the marketplace, traffic is already guaranteed by the popularity of the platform, but the competition is also greater.
- Customer Loyalty:
- In ecommerce, there is a greater potential for customer loyalty, since the interaction occurs directly with the brand, without intermediaries.
- In a marketplace, loyalty can be more difficult, since the customer usually returns to the platform, and not directly to the seller.
- Logistics and Payments:
- In ecommerce, the owner needs to manage the entire payment and logistics process.
- In a marketplace, these processes are often facilitated by the platform itself, which manages payments and even product delivery.
When to Choose an Ecommerce?
If your goal is to create a strong brand, have full control over the customer experience and personalize every aspect of your business, an ecommerce may be the best choice. This is especially true for companies that want to differentiate themselves from the competition and create a long-term relationship with their customers.
In addition, for those who are willing to invest in digital marketing, SEO and ad campaigns to attract traffic and build a loyal customer base, ecommerce offers greater flexibility and growth potential.
When to Choose a Marketplace?
Knowing the Difference Between Ecommerce and Marketplace, if your goal is to start selling quickly and take advantage of the existing traffic from large platforms, a marketplace may be the ideal choice. This is also true for small entrepreneurs who do not want to invest in their own infrastructure or do not have experience in digital marketing.
A marketplace is a good option for testing new products and reaching a larger audience without the need for large initial investments. However, it is important to remember that competition is fierce and profit margins may be lower due to the commissions charged by the platform.
Now that you understand the Difference Between Ecommerce and Marketplace and want to start your own ecommerce and have full control over the brand and operations, learn about the ecommerce development services that I, Wellington Faria, offer. With a customized platform, you will be able to stand out your company in the digital market and win loyal customers. Get in touch and start building your online store today!
