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What Is The Difference Between Online Store & Online Marketplace

Author: Payal Sharma
by Payal Sharma
Posted: Jan 18, 2021

eCommerce has changed the way we shop. It’s a lot easier and safer to shop online as compared to visiting several brick and mortar stores to find the exact products you need. You can find thousands of options in online stores and marketplaces.

If you’re looking to sell products online and have a clear idea of what you’d be selling then you must have an idea about how and where you’re going to sell them.

You can either choose to sell on your online store or on the online marketplace. ‘Are these two different?’ I hear you say. Yes, there’s a big difference between an online store and a marketplace.

The way they work, the procedure they follow, the investments, and the resources they need differs from each other.

Let’s look into it in detail.

What is an Online Store?

An online store or an eCommerce store is an individual’s website that consists of the products that the owner decides to sell.

If you’re starting an online store, it would mean that the consumers that visit you will specifically be yours. There’d be no other seller selling on your online store.

Being the owner of the online store, you’d be responsible for the following things:

  • Inventory management

  • Financing

  • Packaging

  • Delivery of products

  • Handling customer support

  • Marketing

  • A domain name, hosting platform, and registered business details

The products that’ll reach your customers would directly reach them under your name with a valid bill provided under the name of your established online store.

When Should You Start an Online Store?

Creating your eCommerce website can be a piece of cake. With so many websites creating and hosting tools available, anyone can build their website in a day or two.

However, starting an online store can be a little more difficult. You should start an online store when you have the following things checked:

  • You have enough strong network of customers that’ll visit your individual eCommerce website and make a purchase

  • You have the ability to manage and fulfill orders

  • You have resources and tools available to make timely delivery

  • You’re capable to handle all the customer queries and complaints

  • You have enough stock and inventory to provide a continuous supply of your products and keep them always available on your online store

  • Time and money to keep the webpages of your online store optimized for a great customer experience

  • Setting up secure payment gateways to fulfill the payment procedure

In a nutshell, you need to be prepared for handling all the aspects of running a business. Having a strong customer base is great for the sales to keep running and your eCommerce store to grow.

What is an Online Marketplace?

An online marketplace is a huge established market where vendors can sell products online. When you sell on an online marketplace, all you need to do is send the products to the respective fulfillment center from where the marketplace will take care of the rest.

The best example of an online marketplace is Amazon. Any valid business can sell their products online through Amazon without having to have any of their own eCommerce websites.

Here’s what gets taken care of when you sell through an online marketplace:

  • Shipping to the customer

  • Customer support

  • Payment procedure

  • Availability of huge audiences already

If you’re selling your products through Amazon, all you need to do is get your registered business verified by Amazon and start listing your products there.

When an order is placed, you’ll get the money directly. Though, Amazon may take commission depending on the category and price of the products.

When Should You Start Selling On Online Marketplaces?

There’s no particular time to start selling on online marketplaces if you’re ready to sell products online.

You can choose to sell on online marketplaces even when you have or don’t have any online store of your own - and that’s the beauty of it.

Though on online marketplaces, you may not get complete recognition for your brand name, here's what you get:

  • Millions of customers who are ready to buy from the marketplace

  • No liability to handle customer queries and complaints

  • An additional income from the marketplace in case you’re selling over your own eCommerce/online store too

Sell on the online marketplace if
  • You are a beginner and have no experience in handling an eCommerce store of your own

  • You are an established eCommerce business owner but want to expand your business by selling on more than one online place.

Why sell on an online marketplace?

As explained, you can sell on an online marketplace whether you are experienced or not. Now, let’s look at what are the benefits in both cases:

For beginners

If you’re a beginner then selling products online through a marketplace is the best option for you. It can, in fact, be a great eCommerce growth strategy. You may start selling on places like Amazon to generate enough income and build your customer base.

Once you see that your products are getting sold easily, you may create your own online store and encourage customers to buy directly from you.

While you sell over the marketplace, simply promote your products over social media and other places and get a hold of the customers as much as you can.

Once established, you can even give away discounts if your customers buy directly from your eCommerce website.

For established eCommerce stores

If you have a strong database, you may still prefer to sell your products on an online marketplace for easy availability and accessibility to your customers.

This also exposes your brand to the customers who are frequently visiting that online marketplace and are not likely to visit your own.

For example, you may buy products of big brands like Apple, HP, Dell, Phillips from Amazon as well as their own online store.

People choose to prefer Amazon as they provide fast delivery with excellent customer service.

Having a brand has nothing to do with selling only over your own store and not on the online marketplace.

Simply put, selling on an online marketplace can promote and boost eCommerce growth even if you are a beginner or a professional.

Conclusion

Selling on an online marketplace and on your online store have its own benefits and procedure. Where opening an online store would mean being an online store owner, where selling products online on a marketplace means being a seller on an open online platform.

As explained in this article, you can choose to sell products online on either one depending on your stage, expertise, and ability to invest and bear any losses if it occurs and implement that best eCommerce growth strategy that benefits your growth and sales.

If you want to sell products online through your own eCommerce store, then I’d highly recommend you read how your eCommerce Delivery Strategy can Increase your Sales.

About the Author

Chetan Menaria is Partnership & Collaboration Manager at PixelPhant, an eCommerce & fashion photo editing service provider. PixelPhant edit product images to make them look professional & eCommerce ready.

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Author: Payal Sharma

Payal Sharma

Member since: Sep 24, 2020
Published articles: 16

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