This is a tough question to answer but one everyone starting out first asks themselves. Sometimes the answer is simple in the beginning. If you don’t have any experience setting up a website (or know someone who does) then the allure of marketplaces like ebay, amazon & etsy to name a few can be quite appealing.

With most marketplace websites it only takes a few clicks to have a shop up and running, ready to take orders. But is it really that simple? And is the time you need to invest really worth it in the long run?

To get a more in-depth let try to break down some of the time & expenses for each.

Marketplace Stores

Because of the countless number of marketplaces out there we wont focus on one in particular. Instead, we will generalize using the similarities of some of the most popular destinations.

Pros

Easy Setup

No mater which marketplace you are looking at, chances are setting up your shop will only take a matter of minutes. A fraction of the time it would take setting up customizing your own website. This is a great advantage and if you have little experience with the technical side of things, it may be our only option initially.

Built-in Customer Trust

In addition to ease of use these marketplaces come with their own customer base. People that show on Etsy tent to search on Etsy first for the products they want. The same goes for Amazon, Ebay ect.

But just because shoppers use a platform doesn’t mean you will necessarily get their business. Within these eCommerce platforms show loyalty does play a role. If they’ve bought from a show before they will be more inclined to do it again versus a new shop. So it makes it even more important to stand out from the crowd.

Payments

You usually don’t have to worry too much about setting up payment portals because these marketplaces usually have their own in house setup that all shops use. This is a big advantage and brings us back to the first point about easy of setup.

Community Support

Usually support is offered in terms of a community forum or message board. Here you can get most of your questions answered by other sellers that have had the same issue in the past. It’s a great resource, especially if you take the time to search past topics. You can usually find the answer you are looking for rather quickly.

Cons

Now that we know some of the advantages to selling on marketplaces, lets look at some of the disadvantages.

Official Support

Just like how getting support from the community can be an advantage, official support from customer service can often be lacking. These companies are primarily geared towards their customers and shop owners with issues more often than not receive canned responses or non at all. Some make it hard to even find customer support forms & phone numbers. This isn’t all their fault, they are inundated with numerous request per day and just unable to help everyone so they try to automate the process as much as possible. Your millage may very depending on which marketplace you use.

Spending Time and Money Improving Someone Else’s Website

This is one of the biggest point against selling solely on these marketplaces. At the end of the day, everything you’ve done to get visitors to your shop while it may benefit you, the biggest benefactor is the company that owns the website. After all, the more successful you are, the more successful they are. This can be a a beneficial symbiotic relationship if everything goes right but you have to take into account that at times it may be more beneficial to them than it is to you.

Fees

This goes without saying. Most marketplaces charge you either a monthly fee for your store, listing fees per product or both. On top of that many take a cut of your sale to pay for processing fee ect. These fees usually can’t be avoided though some may offer discounts to high volume sellers.

Your Store Can Disappear Without Much Warning

Like it or not, your tied to the success or failure of the marketplace as a whole. If something happens to the company that owns it, your shop and customer base could vanish overnight. This may not be a big concern for the most popular eCommerce sites but it is something you should consider.

On top of that you could get into some type of dispute with a customer or break the terms of service. If that happens your financial future would be solely in the hands of their dispute resolution departments. If for whatever reason they close your shop, everything you’ve worked hard for is now gone.

Since non that I’m aware of don’t let store owners run mailing lists on their site or downright prohibit off-site communications, you wont have a way to inform customers that your shop has moved. You would literally be starting from scratch elsewhere.

Running Your Own eCommerce Website

Pros

Higher % of the profit

Most all platforms charge an overhead fee for usage on their platform. Some may charge per item, listing fees, Percentage of the final sale value or all three and more. If you are selling on your own website you get to keep that piece of the pie. Whether that’s a pro or con would depend on your website as you would still have overhead, hosting software licenses, tech support ect. If you know how, or are willing to learn your way around WordPress or similar cms (content management system) and hosting setup you could definitely come out ahead in the end.

Full Control

This probably should be first, as to me it’s the biggest advantage to running your own website. You have full control over the content of your domain. You don’t have to worry about your shop getting shutdown because of some arbitrary issue. Since your website will be hosted on a server you do have to make sure you follow all of their rules though. But, keeping consistent backups insures that if you don’t get along with your web host for whatever reason, you can move to another and bring your whole shop with you! Try to do that on a marketplace!

While moving might be an annoyance there is piece of mind knowing that your domain name is registered to you or your business and you can point it to whichever web host you desire.

You are building your website, not someone else’s

Like above, this is huge. When you work on your website, run promotions, sales, invest time and money into improvements, You are the direct benefactor, after your customers of course. Think of it like a rent house. You move in on a lease and pay to remodel the kitchen. While you may enjoy the benefits initially, that kitchen never really belonged to you and all you have done is increase the property value of a very happy land lord.

Likewise, if you buy the house and remodel it you reap the rewards not only with having a nice place but like in housing, websites have property as well.

Better Marketing

No mater what features marketplace platforms offer you, they can never top the potential you would get from marketing your own website. With your own website you can setup mailing lists, newsletters, strategies to reclaim abandoned shopping carts and more. The options are limitless.

Cons

Longer setup process

One thing the marketplace platforms have really streamlined is the setup process. sign up here, click a thing-a-ma-bob or two there and BAM, instant shop. While setting up your own website takes time and some technical knowledge. If you pick a popular CMS you can make the process easier but it’s still a learning curve if you’ve never done it before.

Little Support

If you run your own website, you usually don’t have dedicated technical support aside from your hosting provider. (If you are on managed hosting this can be negated.)

A lot of the popular CMS software is opensource. If you have a problem you are usually stuck searching the web and browsing forums to find an answer. The key here is to research any software you are interested in using. Make sure they have regular updates and a dedicated forum for support issues. Because most of the time, if you have a problem, it’s posts from other users with similar issues where you will find your answers.

No Trust

If you are part of a marketplace platform, there’s a certain amount of customers have in using the platform no mater which seller they buy from. If you sell from your own website you have to build that trust from the ground up. This can take time but it’s not insurmountable.

Conclusion

As you can see, there’s pros and cons to each choice. If you have technical experience or have the patience and willingness to learn, starting your own website could be the way to go. If your experience is limited you may want to get your feet with with one of the many marketplaces.

Ultimately, a multi-vector strategy would be the best approach. If you have a shop setup on your own website, there’s nothing stopping you from telling on the various marketplaces in tandem (so long as it doesn’t violate any tos) This way, if something should happen to one of your stores, you are not left up a creek without a paddle.

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