Marketplaces vs e-commerce websites

When businesses are thinking about going digital, this is a question that many are asking themselves, should they register for a marketplace or should they go about building their own e-commerce website and sell directly to their audience?

With the announcement of TSTT’s Parlour Caribbean marketplace, this question is sure to be asked even more now. At present, TT has close to 40 online marketplaces to choose from. Further complicating the decision of which marketplace to choose if you decide to go that route, as all marketplaces are not the same. TT is also too small of a market to sustain all of these marketplaces, so let’s get down to the pros and cons, that way you have some assistance in picking the right pathway for you.

Choosing whether to have your own website or use an online marketplace is a business decision and one that must align with your business model, finances and marketing strategy.

If you are thinking about building your own website, here are three key pros to this choice:

1. You have full control of the platform and can create your own branded experience when people land on your website. Your content, aesthetics, checkout processes, payment options, and delivery options are all within your control.

2. You are able to work on your own search engine optimisation, which will allow you to show up in various search engines like Google and Bing. Sixty three per cent of all sales start with a Google search, even if the interaction was conducted at the physical location.

3. Your website is one of the greatest tools on the market for data collection. You are able to add backend tools like Google Analytics, Google Search Console, Bing Webmaster, Hotjar, Microsoft Clarity, Retargeting Pixels, CRM and much more. This data is used to help understand your audience and grow your business.

The main con to building your own website is that there is technical knowledge to get started, you will need to build out your own processes for payments and deliveries and even though you have the website built, you need to learn how a website works in order for it to gain clients, sales and leads for your business. Expenses to build a website can vary. It's cheaper to build it yourself but the cost can rise when hiring developers.

The pros for the online marketplaces are as follows:

1. There is no technical knowledge needed to get set up. You register on your platform of choice, pay your subscription fees and list your products. You don’t have to figure out payments or delivery methods because the platform has built out that system for you.

2. This is the quickest way to get your business online and selling. Since they have removed all of the technical barriers, you can get your business online and selling within a day.

These are two very big pros, I believe there are more cons to marketplaces but ultimately, your business needs to weigh out the pros to see if it is worth it for your business.

The cons are as follows:

1. The marketplace focus on building its own brand, ie Amazon, eBay, and Craigslist. The bigger the brand name of the platform, the more it will attract consumers to check it out. The platform needs to focus on building its brand first and it cannot focus on pushing your individual brand because they are going to be listing thousands of vendors.

2. Your competition is on the exact same platform as you. If you are selling pepper sauce, for example, there can be dozens or hundreds of other brands selling the exact same item as you, it allows the consumers to easily start comparing your brand to others and you can get lost on the platform amongst the noise.

3. You have zero control over the platform. You cannot create an experience on the marketplace, the way you are able to do on your own website. The experience is solely up to the marketplace, their UX/UI, their branding, the checkout processes, payment options, delivery options, and customer services, this is all handled by the marketplace. Choosing the wrong platform can impact your brand and alienate customers if the marketplace chosen isn’t a good platform.

4. Most marketplaces have high subscription fees that you have to pay regardless of whether you sell or not.

5. Marketplace saturation is very high in TT which means that most of the platforms are unable to bring in a high number of vendors, which lowers the value of the overall marketplace and defeats the purpose of the marketplace concept.

Ultimately, you will need to sit down and go over what is going to make the most sense for your business.

Keron Rose is a digital strategist who works with Caribbean businesses in building their digital presence. To learn more, visit Keronrose.com or check out the Digipreneur FM podcast on all podcast directories.