Less immediate competition—your products aren’t listed right next to other sellers with similar offerings

Harder to get your product in front of potential customers—you’re operating an independent website, so it takes an extra step to get people to land on it

Easier to get eyes on your product—the “digital shopping mall” has a built-in customer audience

Less control over your brand—your storefront is marketplace-branded, and your pricing may be subject to sales, discounts, etc. beyond your control

An ecommerce platform gives you full control over your online store, and full visibility into your distribution network. You don’t have to follow any marketplace restrictions or regulations, allowing for greater choice and flexibility in terms of your product assortment, fulfillment and distribution channels, and overall operations.

You’re the one sourcing and managing business partnerships with 3PLs, parcel carriers, and other links in the supply and distribution chain. If there’s a disruption, you’re able to deal with it directly instead of having to navigate unfamiliar marketplace infrastructure.

An ecommerce platform is potentially less scalable—you don’t have access to the resources, digital bandwidth, workforce, and operational network of an established retailer marketplace.

An online marketplace gives you less control over your storefront and brand. There might be product restrictions (type, materials, dimensions, weight) and fewer options available for logistics and fulfillment providers, parcel carriers, etc. Supply chain disruptions might be more complicated to navigate.

That said, it might be easier to capitalize on consumer trends. For example, if a certain product goes viral and you have the ability to quickly add it to your store, the marketplace has a built-in audience of people likely to search for that product and find your offerings.

An online marketplace is an established shopping destination designed to accommodate millions of visitors, with a safety net of money and resources. Overall, a marketplace offers greater scalability.

One of the biggest advantages of an ecommerce website is unique, memorable, consistent branding. You have full control over the design, layout, navigation, etc. of your website and marketing materials. The only branding on your website is your own.

It’s also easier to collect data such as customer emails in order to build marketing lists and maintain communication with previous customers, keeping them updated on new releases, sales, and other promotions.

When a customer visits your online store, it’s like walking into a brick-and-mortar boutique—the experience is simple and straightforward, without any distractions, on-site competition, or clashes in messaging. They’re more likely to remember your brand name—and seek it out again in the future.

This is one area where online marketplaces fall short—at least for businesses interested in brand recognition and awareness. In general, marketplaces provide limited access to customer information. All digital touchpoints, interactions, and transactions are managed by the marketplace platform.

Sellers might have access to some data (page hits, conversion rates, etc.) but not the full picture. There’s no opportunity for email capture or similar customer retention tactics. (For example, Amazon does not share customer emails with sellers.)

You can customize your storefront, but everything else is marketplace-branded. Your products stand out less in a sea of competition. If someone asks one of your customers, “Wow, where did you get that?” It’s likely they’ll say, “I got it on Amazon” rather than, “I got it from Brand Name.”

This all sounds pretty negative—but there are plenty of ways to make up for a lack of branding. For example, packaging inserts that offer an incentive for customers to visit your website, encouraging audience engagement through other channels.

With ecommerce, your capabilities depend on your digital infrastructure. If you build a website from scratch, it’s up to you (and/or your web developer) to decide which tools and technologies to utilize, how much traffic to accommodate, and so on.

If you use an ecommerce platform, the essential web design and ecommerce tools are included in the service—i.e., the house is built, you just have to furnish it.

In terms of your broader operations, your capabilities depend on your storage and fulfillment network. If your 3PL provider uses outdated technology or legacy infrastructure, that limits your business. It’s important to choose partners with an eye on the future, not a foot stuck in the past.

When evaluating potential 3PL partners, feel free to ask about their current and future plans to incorporate new technologies into their workflow.

With a marketplace, your capabilities depend on the marketplace platform. One major advantage of selling on a marketplace is that you’re not responsible for tech support—if there’s an issue, it’s up to the marketplace administrator to resolve it. You also don’t have to worry about “traffic jams” or other issues that can affect independent domains.

In terms of your broader operations, it depends on whether you’re using in-house storage and fulfillment services or outsourcing to a 3PL. There are pros and cons to both—whether you go for one or the other, or a combination, depends on your business needs.

Marketplace infrastructure makes for a highly convenient customer experience, especially at checkout—most customers will already have an account with their payment and delivery information set up, allowing for quick and easy purchases. For ecommerce websites, it takes extra work to get customers past the checkout hurdle.

Ecommerce websites—built from scratch or with the help of an ecommerce platform—requires a bigger initial investment. It’s hard to bring in organic traffic, meaning you have to spend time and money on cross-channel marketing campaigns.

You have to make sure your website is as easy, convenient, and enjoyable to navigate as possible. Even when you’re using a platform with built-in tools, making a purchase requires the customer to navigate an unfamiliar website—as opposed to a marketplace where they’re familiar with the layout and they already have an account.

All of this marketing, website maintenance, customer relationship management, etc. means ecommerce is more costly up front. However, the only platform fee is the price of service—you don’t have to worry about additional charges stacking up.

Selling on a marketplace is definitely more cost-efficient up front. You don’t have to build or design a new website. Of course marketing is still important, but you don’t have to worry about driving traffic to the marketplace. The customer base is already there—your goal is to stand out from the competition and convert leads.

Your primary expense is whatever it costs to set up and maintain your online storefront. However, many marketplaces charge additional fees for services such as high or low order volume, higher product rankings, referrals, payment processing, sales commissions, and value-adds like custom packaging or shipping labels. Small fees can add up quickly to decrease your profit margins.

An ecommerce platform gives you full access to customer data, plus the ability to collect opt-in data such as emails. Direct access to customer data—site activity, ad clicks, touchpoint interactions, etc.—not only informs data analytics for marketing campaigns and other decision-making, but it allows you to communicate with customers, provide personalized customer service, and direct your marketing budget toward targeted ads to improve conversion rates.

As mentioned above, online marketplaces allow only limited access to customer data. There’s no way to directly communicate with customers unless they go to your website later, and you won’t gain any insights as to why a customer chose your product over a similar one or vice versa. You have far less insight into the customer journey.

Store owner is responsible for handling entire operation

Marketplace administrator handles certain aspects of operation