E-commerce and a marketplace: Which one do you need and why?

brillmindztech

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Online marketplaces and sales continue to grow and be established compared to traditional commerce, as a habit option among consumers. That is why more and more companies, regardless of their size, have or are in the process of opening a virtual store, which guarantees the offer of services and products to a wider network of customers.

For this, companies that want to have an online sales channel have two options: open their own e-commerce or be part of a marketplace.

For this, it is important that companies know the type of electronic commerce they want to have, evaluate the digital marketing strategies that they are going to implement, have a solid database, and that they know how to distinguish the business model of online stores and physical stores.

In this article we will tell you the differences between these two concepts and the advantages and disadvantages that each one has:

But what's e-commerce?

Let’s start with the concept of e-commerce which refers to the sale, purchase, distribution, and supply of a product, service or information through the internet.

Generally, this is done through a virtual store where a company sells its own services or products. To do this, the company must buy its own domain and have a marketing strategy that promotes brand recognition and customer loyalty, which will require a higher initial investment.

In addition, a company that decides to have an online store must take into account the entire purchase process of users, from the moment of search, research, consideration, payment platforms, the purchase transaction, and the entire delivery and return process if necessary.

In this case, having e-commerce will allow the company to personalize its page and create valuable content that attracts the greatest number of customers. In addition, you will not have direct competition on the website and the total profits will go to the company.

What’s a Marketplace?

For its part, a marketplace refers to a platform where different products from different brands coexist. It is like a shopping center or a large online chain store. The clearest example of Marketplace is Amazon, a site where people can find different products and both companies and entrepreneurs are under the same market conditions.

Selling in marketplaces will have several advantages, one of the most attractive will be the visibility of the products thanks to the good positioning of these digital markets, which generates greater reliability among buyers to carry out commercial transactions. In addition, it does not require an initial investment as high as in e-commerce and will allow B2B AND B2C electronic commerce.

However, in this second case, the company will not be able to personalize the page, the marketplace is left with a commission for the purchase, and there will be greater competition since the product catalog will be larger and the user’s attention to a product will be shorter.

E-commerce and Marketplace: Which is the better option?

In e-commerce issues there is no magic formula that guarantees the success of online sales. For this, the first and most important thing is to define a strategy according to the business model of each company and its objective with its digital channels.

Now, if it is only about selling a product and you do not want to consolidate the brand in online shopping, the better option is the marketplace. But if you want to consolidate the brand and work on customer loyalty, e-commerce is the better option.

In addition, these two options can be complemented without any problem, so that a company can have its own e-commerce and at the same time offer its products on another digital market platform.