Comparison of E-Marketplaces and EC Store Software Options

Comparison of E-Marketplaces and EC Store Software Options

In the long run, it is more beneficial to sell products and services through both marketplaces such as Amazon and eBay, and through one’s own online store. The reason for this is that the marketplace’s infrastructure provides sellers the opportunity to access wider markets, such as overseas regions that the seller may not otherwise be aware of. Secondly, E-marketplaces can offer the sellers reduced marketing expenses as they are already established and are visited by millions of potential customers (Ellis, 2011, p. 280). This increases the possibilities that the seller would receive regular quotation requests from both the existing and new customers. Selling on one’s own online store can also be of great benefit to the business. Firstly, the seller can get higher profit margins because the online store would be a first point of sale, rather than second as in the case of E-marketplaces. Marketplaces are also businesses that seek to make profit, and can achieve this by charging sellers high market fees that reduce profit margins. Secondly, the marketplace infrastructure focuses on the products, rather than sellers in order to build their businesses further. This would be an obstacle to sellers willing to create a market niche for themselves and benefit directly from customer loyalty. Finally, one’s own store provides greater opportunity to monitor the inventory because sells are made directly to the customer, rather than through a second point of sale. Such direct sales can also minimize delays, thereby providing an opportunity to sell goods and services in a timely and efficient manner.

In case I have to choose just one channel when starting my online business, I would prefer selling through a marketplace rather than my own online store. This is because I will have greater opportunities for realizing increased sales as market places have enormous scale of online presence. A marketplace draws millions of visitors that are potential buyers, thereby increasing the chances of making sales. Such a high number of visitors would translate into higher sales volumes that would enable the business to grow at a very fast rate. Secondly, since those visiting a marketplace are looking for particular or specific products, there is a high chance that those who will visit my door and receive excellent service and satisfaction would likely make repeated purchases in the future.  A market place would provide me greater opportunities for customer acquisition as I will be selling products and services that encourage frequent or repeated purchases. Thirdly, I stand to benefit a lot from a marketplace infrastructure as it can draw in a lot of customers who are shopping for a variety of items and services online. This is because a marketplace can actually be compared to a shopping mall in the real world scenario, thus provides customers with a very rich and fulfilling shopping experience (Bajaj & Nag, 2005, p. 41-42). I would also enjoy reduced marketing costs in a market place the high number of sellers makes them enjoy the economies of scale in marketing costs. Finally, selling on an international marketplace can provide me greater opportunities for making overseas sales that I might otherwise not be aware of.

I would prefer selling on Amazon rather than eBay or Etsy for several reasons. Firstly, being the world’s largest online retailer, Amazon has unmatched traffic, which translates to a higher number of potential customers that can purchase from me. This would result in increased sales, which would make my business grow at a faster rate. For example, at the end of 2013, Amazon had more than 237 million active accounts by customers from across the world (Statista, 2014). This global scope and reach has made it among the most valuable brands across the world, thereby drawing in more loyal customers, which can lead to increased sales. Secondly, it has been operating for nearly 20 years, hence has enormous experience and expertise in the field of e-commerce. The upgrading of its systems over the years has made its platform more reliable in preventing sellers from being defrauded by Amazon itself and the retail buyers (Allen, 2011, p. 43-44). Therefore, more customers would visit Amazon as they consider it safer than its other smaller competitors. Thirdly, Amazon has the highest number of sellers. With such an enormous number of sellers, the individual sellers would be charged less marketplace fee because of the economies of scale. This implies that I would enjoy a larger profit margin that would enable my business grow and prosper.

In conclusion, it is evident that a marketplace provides a seller greater opportunities to sell overseas. The marketplace infrastructure further lowers the seller’s marketing costs, thereby increasing one’s profit margins that accelerate business growth. However, since a marketplace is a second point of sale, it denies sellers the opportunity to expand and establish customer loyalty through their brand name as in the case of launching one’s own online store. It is therefore more appropriate or advisable to sell through both the marketplaces and one’s own online to capitalize on the benefits offered by the two channels while minimizing on their respective drawbacks.

 

 

 

 

 

 

 

 

References

Allen, M. (2011). Selling on Amazon: The Newcomer’s guide. Indianapolis, IN: DogEar Publishing.

Bajaj, K. K., & Nag, D. (2005). E-commerce: The cutting edge of business. New Delhi: Tata McGraw-Hill Pub.

Ellis, N. (2010). Business-to-business marketing: Relationships, networks and strategies. Oxford: Oxford University Press.

Statista. (2014). Statistics and facts about Amazon. Retrieved from: http://www.statista.com/topics/846/amazon/