Selling Online: Marketplaces vs. Web Stores

Selling Online: Marketplaces vs. Web Stores

online business

The e-commerce industry is incredibly saturated, but that means there are plenty of options to choose from. There are so many third-party marketplaces, and so many platforms to host your own web store on—how do you even start to choose? We outline the pros and cons of both options here, so you can make an informed decision. 


What do eBay, Amazon, Etsy, Freelancer, and Uber all have in common? They’re all middlemen—bringing your product or service directly to the eyes of people looking for what you offer. This, of course, comes with a lot of hands-free benefits, but it’s important to consider the consequences of lending your brand to a big marketplace. 

The Benefits

Less of an Investment

Opening up your own web store takes a lot of time and money upfront. For example, the cheapest possible Shopify plan will cost you $348 per year, plus financial and time investment in things like branding, graphic design, initial setup, and your domain name. These things are taken care of for you on a platform like Etsy of eBay. 

Engaged Audience

Marketplace audiences are ahead of the average customer in the buyer cycle—that’s right, they skip the awareness phase completely. They already know what they want, and they’re ready to spend! They’re in the consideration and intent stages of the cycle, not to mention a lot of people browse marketplaces when they’re bored, resulting in a lot of impulsive purchases. 

Simplified Approach

eBay has a great interface for dealing with your customer inquiries. Amazon makes fulfilling an order clear and simple. Etsy gives you a simple and intuitive analytics page—these features make your role much simpler! Selling through a marketplace means less work for you. 


When you’re backed by a big name, people automatically trust you more. Imagine buying something from eBay—you’re pretty sure you won’t get ripped off, and if you do? You know eBay will have your back. Being attached to marketplaces trusted by the masses has some serious benefits in a world where brand trust is everything. 

SERP and SEO Friendly

SEO (Search Engine Optimization) and its effect on the SERPs (Search Engine Results Pages) are essential to getting found online. Popular marketplaces and well-established sites carry a lot of authority, and are much more likely to rank well than your brand new site. Your products, when sold through a big marketplace, are more likely to be seen when someone searches for a keyword related to your product—that’s pretty significant. 

The Limitations

Fierce Competition

A lot of marketplaces are flooded with people trying to sell their goods and services, a lot of which will look like yours. Go to Etsy and type in a simple search—you’ll see how competitive most keywords are. Standing out from the crowd can be really difficult, and it takes time and money to do so. 


The fees associated with selling on a big marketplace may seem small at first, but they add up pretty quickly. For example, Etsy doesn’t charge a monthly fee, but instead they charge a listing fee of 3.5%. Sellers on Etsy pay relisting fees, direct checkout fees, and have the option of promoting their listings for a fee. It doesn’t take long for these little fees to start eating into your profits, and some marketplace charges are more complicated still. 

Missing Customer Acquisition

The marketplace owns every single sale you make. This means you can’t ever add a seller to your mailing list, you never get their Facebook pixel, and you can’t upsell them your own products. With the importance of brand loyalty nowadays, this is quite a setback. It’s also important to remember that most marketplaces reserve the right to close your store at any point, no warning required.

Branding and Sales Experience

Again, you don’t own your sales. Most marketplaces are incredibly restrictive in how you can brand your store within their platform. You can have your store name, some kind of header image, and maybe a “latest news” section—but that’s about it. A marketplace will never let your brand overshadow theirs because, essentially, they’re using you to market themselves. 

To Wrap Up

Selling in a marketplace requires a small, upfront capital investment and is a great place to validate an idea since your audience is already engaged. It’s extremely simple, so even the most technologically challenged business owners can figure it out. Keep in mind, however, that as your brand grows, fees and restrictions will make growth and profit difficult. 

Web Stores

A web store is essentially a personal website that showcases your products. Site visitors can add products to a shopping cart, as well as purchase directly from your site. You control everything—for better or for worse. 

The Benefits


You have total control over your company’s branding, education, experience, layout, design, navigation—everything. You control how people perceive your brand. That means you can change anything, anytime, with zero roadblocks. 

Customer Data

You have complete access to customer data like email addresses, so you can add them to mailing lists and start email marketing. You also have access to information like purchase history, average cart spend, and other data you can use to better the shopper experience and build a loyal fan base. 

More Revenue

You don’t have to deal with any listing or sales fees, which means there’s more money in your pocket. A monthly fee for your platform and a fee for certain payment types could be your only recurring costs. A web store does require more work, especially upfront, but you keep all the profit you make. 

Efficient Marketing

Facebook and Google ads are a great way to get people to your store, but when you’re paying listing and sales fees out the wazoo, paid ads in a marketplace can feel like a total waste of money. 

Long Term

Studies show that 18-26-year-olds are more likely to buy from independent retailers online, and this trend is said to only grow stronger. Sellers of unique products need to create a memorable buying experience and a trustworthy brand, because that’s what more and more consumers are worried about—authenticity. You can use your customizable web store to convey a strong and emotive story, that will eventually create a loyal following. 

The Limitations

More Work

Obviously, opening your very own web store requires much more time and effort than selling through an established marketplace. Brand imagery, branding, terms and conditions, etc. is all up to you. With today’s website building services, it’s easy to make a good web store—but it takes a lot of elbow grease to make an amazing one. 

Manual Marketing

Marketplaces have what we call “automatic” marketing, because they’re marketing themselves which, in turn, markets you. With a web store, advertising is entirely up to you. Influencer, SEO, and content marketing are all great options that don’t cost a lot, but they do take a lot of time. Facebook and Google ads can seem complicated at first, but they’re essential to driving traffic to your site. Basically, you’ll be teaching yourself a lot of things. 

Staying Up to Date

In the last year and a half, the ecommerce industry has watched the live chat feature go from novel convenience, to absolute necessity. Product videos are growing in popularity, as well as user generated content. These are trends you have to keep up with, and there will be new ones tomorrow! Without an overhead company, this is something you’ll have to invest time into. 

To Wrap Up

A web store gives you complete control over everything. This makes things more complicated, but it also enhances your customers’ brand experience. Greater access to customer data means you can figure out what they want, and build a loyal fan base. Email marketing is yours to utilize! You spend some money up front, but don’t have to worry about listing or sales fees later. 

What About Both?

There’s no rule saying that you have to commit to just one method of selling! A multichannel approach works really well for some people, so it’s something to consider. You’ll get your product in front of as many people as possible—a wider net usually means more fish. 

Start in an established marketplace, and then start offering discount codes that are only valid on your actual web store site. This channels already engaged audience traffic (remember, those who skip ahead in the sales funnel!) from the marketplace, straight to you. There are tools out there that will help you stay organized with multiple selling channels, like Shoplo Multichannel, but the best approach would be to start slowly. Figure out what works best for you, as well as what makes the most sense for your specific company or product. 

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