Decide: marketplace or own web store
Written by Chris Barling
Wednesday, 30 March 2011 00:00
The last few years have seen the rise of ’online market places’ such as eBay and Amazon. You can use their technology to start selling straight away and more importantly, they will deliver visitors to your store from day one. These are major benefits and are the reason why huge numbers of merchants have started selling online through this route. Many merchants with their own websites also sell through Amazon, eBay and others. The benefits are clear, so it’s worth outlining the issues.
- The first is cost, where listing and transaction fees will take a significant proportion of revenue.
- The second is control, where you must adhere to strict policies and your business can disappear overnight if you are deemed to have stepped out of line.
- The final disadvantage is slightly ironic. Because it’s so easy to start up, there is a constant stream of new competitors, many of whom are running their business in the evenings. The most common approach of these start ups is to compete on price, which puts pressure on margins for everyone. While some of these businesses do not last long, there is a constant stream of new ones to take their place. For these reasons we will mostly consider running your own store here, but marketplaces should be considered and some of the advice applies equally to running marketplace-based businesses.