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marketplace vs own website

With the boom in ecommerce revolution in India every budding entrepreneur wants to launch his products via digital shopping methods. Every legacy brand now is either already available online or just waiting to launch themselves. In todays world with a boom in digital transactions in India the ecommerce industry will continue growing next 10-15 years. The market is expected to touch $100 billion in next 3 years.

There are 2 primary ways in which one can launch its brands, Marketplace & Brand Website. Below are the difference between the two.

Marketplace

Marketplace is a third party platform where a brand registers itself as a seller and sells its products to the buyers which visit these marketplaces. Popular marketplaces in India are Amazon, Flipkart, Myntra, Ajio & Meesho. There are several other small and medium sized marketplaces. These marketplaces have built a reputation over time with buyers and sellers. They have large catalog sizes and act as a medium between buyers and sellers. Today majority of ecommerce business market share is with these platforms.

They charge a commission, fixed fee, sponsored products ads and shipping fee from sellers based on category and price point. Sellers have to abide by all rules of the platform to list and ship. All marketplace have a strict policy of shipping SLA and adherence to these is a must.

Features of Selling on a marketplace

  1. A ready pool of buyers for your products.
  2. Help from seller support teams to start and grow your brand.
  3. Almost no tech knowledge required.
  4. Quickest and easiest way to lauch your business online.
  5. No trust issue for buyers.
  6. Best for general product categories and Low ASP products.
  7. First hand experience of how online industry.
  8. No major markiting skills required.

However there are lot of difficulties too in doing business on Marketplaces

  1. High overall cost of selling.
  2. Difficult to make healthy margins due to high competition.
  3. COD & returns Issues and buyer frauds.
  4. Complicated Accounting policies.
  5. Pressure of maintaining visibility in first pages.
  6. No control over your listings.
  7. Tough to sell premium product categories.
  8. No ownership of data.
  9. No brand identity.

Brand Website

Having your own website is a must today to create a reputaion and grow your brand in long term. A brand website though easy to setup and maintain could be tough and costly to market and get sales. There are several challenges in a brand website but if you are thinking for a long term goal and you have a unique product offering then you should consider your own website.

Below are some facts about having your own website for your brand.

  1. You own the Customer and data.
  2. Better gross margins.
  3. No dependence and interference of any third party in policies.
  4. Suitable for all Types of Products, categories and markets.
  5. Control over COD, Returns and frauds.
  6. Achieve long term Goals.
  7. Build your own brand identity.
  8. Geographical control of marketing.

Difficulties

  1. You need to have some tech knowledge to run your own store.
  2. Many website fail because they couldn’t market themselves.
  3. Require understanding of every aspect of running an online business.
  4. Could be non profitable in short term.
  5. Need investments in Digital Marketing.
  6. Customer support.

Conclusion:
What is best for a brand. There is no ideal answer you can arrive to a conclusion on basis of several factors. Below are a few criteria which will help you in taking a decision.

FeaturesMarket Place Own Website
Premium ProductsLow SuccessHighly recommended
Low ASPYesNot recommended
Medium ASPMaybe in selected PortalsRecommended
Unique ProductsLow SuccessHighly Successful
Custom ProductsNot RecommendedRecommended
Short Term GoalsYesNot Profitable in Short Term
Long Term GoalsRecommendedBest
Brand IdentityNo Identity createdOnly way to create your identity
MarginsVery Low marginsHigh Margins
Technical SkillsNot requiredSome skills required
CompetetionVery ToughLow Competition
Marketing SkillsLittle Good skills required
Data ownershipNo data You own the data

However there is another option of Omnichannel Selling. Omnichannel Means selling on both marketplaces and yur own website, there could be some situations where in you want to test your products or need huge volume as well as brand identity then you should opt for both the channels.

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