Some of the most popular websites are ecommerce hubs and marketplaces. They specialize in providing web merchants with a “one-size-fits-all” solution to selling products online. Does that mean that these websites will always have your best interests as a seller at heart? If not, it may be time to consider setting up your own ecommerce website!

When One-Size-Fits-All Isn’t The Best Fit

The holiday shopping season is fast approaching, and ecommerce sales are once again expected to grow at an impressive rate. Leading that marketplace are two internet goliaths, Amazon and eBay. Another smaller competitor, Etsy, rounds out an ecommerce trifecta that accounts for hundreds of millions of customers and sales around the world. With that kind of market share, it is no surprise that many web merchants choose to utilize one of these three platforms to sell their products. However, it is important to note that utilizing one of these third-party websites to set up shop online isn’t the best solution in most cases, and it may be time to reconsider setting up your own ecommerce website and having complete control over your online ecommerce presence.

Using A Household Name

The biggest advantage that eBay, Amazon and Etsy offer to merchants is their huge, built-in base of new and existing customers. When your ecommerce marketplace is not just popular, but literally a household name that is known to even the least-experienced Web user, you don’t have to worry about marketing, Search Engine Optimization (SEO), or the stability and reliability of the platform itself. Each website provides easy-to-use tools that allow non-technical sellers to quickly set up online storefronts and begin selling products, and each site also offers checkout and payment processing options that are often just as easy to setup and use. When these sites make the process so easy and painless, why would any online merchant choose to take on the perceived expense and hassle of setting up their own virtual storefront? Well, because the benefits of using a third-party marketplace, and the cost and limitations of building your own ecommerce website, are often both overstated.

Being A Small Fish In A Very Big Pond

In the world of ecommerce, eBay, Amazon and Etsy all boast impressive numbers, however, merchants on these sites are essentially small fish swimming in three very large ponds. This leads to problems with exorbitant fees, getting help and support when something goes wrong, and ultimately distinguishing yourself in a very crowded marketplace.

E-Commerce Fees

Many merchants don’t realize that the fees that sites like eBay, Amazon and Etsy charge can take a significant bite out of sales revenues. The built-in customer base and ease-of-use aren’t cheap – eBay charges a 10% fee up to $250, and charges extra for advanced listing upgrade fees. On Amazon, fees can go as high as 25% of the item’s price! Etsy charges significant fees as well, and both eBay and Etsy utilize PayPal, which includes another set of transaction fees.

Online Buyer Bias

It is important to remember that buyers on these sites are considered customers of the marketplace, and many disputes that arise between buyers and sellers on these sites are resolved with a bias towards the buyer. In particular, eBay has a number of controversial policies in place that explicitly favor buyers, including a 180-day return policy and a restriction on seller-to-buyer feedback. Setting out on your own doesn’t give you the right to cheat or abuse buyers – in fact, many Amazon and eBay policies need to be emulated by their independent sellers.

Race To The Bottom

Many sellers who commit to these large marketplaces overestimate their ability to distinguish themselves and their products. eBay, Amazon and Etsy limit the ability of sellers to customize their storefronts and product pages, and often sellers are perpetually on a “race to the bottom” when it comes to product pricing. Worse, most Amazon sellers find themselves competing directly with Amazon! As with customer policies, operating your own ecommerce site doesn’t provide a magic ticket to charging unreasonably-high prices – savvy customers will still comparison shop, and specialty search engine services will still aggregate product prices from multiple websites.

Host Your Own Store

Hosting your own ecommerce store gives you the power to fully customize your storefront and product pages, which can present a product more uniquely and favorably to online shoppers. Setting up and operating your own ecommerce site isn’t free, but you have a choice of hosts, ecommerce platforms and payment processors. Read more about choosing your ecommerce platform in our next blog.