eCommerce Platform vs eCommerce Marketplace: Which One Is Right for Your Business?

When your products are ready, you need to choose where to sell them. Picking the right place is very important for your business. Whether you are new or experienced, this choice can make a big difference. 

You might have heard about eCommerce platforms and marketplaces. Both can help you sell products, but they work in different ways. 

In this blog, we will explain what they are, how they are different, and give useful tips to help you choose the best platform to sell your products.

What Is An eCommerce Platform?

An eCommerce platform is a software application that hosts online stores and enables businesses to create and manage a website for marketing, sales, and operations. Through this platform, businesses can directly sell their own products to consumers. The website built and managed using an eCommerce platform is referred to as an online store.

In other words, eCommerce platforms provide the foundation for building and managing online stores. These platforms help companies sell their products directly to consumers through their own branded online store, as opposed to using third-party marketplaces like Amazon or eBay.

For example, if you go to a retailer like Columbia, Nike, or Patagonia and buy an item of clothing there, you’ve made a purchase through an eCommerce platform. 

Here are some well-known eCommerce platforms to consider for building an online store: Shopify, WooCommerce, BigCommerce, and Magento. Each platform offers a range of features and customization options to suit different business needs and preferences.

Let’s look at the key features of an eCommerce platform:

Features	Description
Customizable Storefront	You can design your store the way you want. This means you can choose colors, layouts, and features that best represent your brand and attract customers.
Product Management	You control which products to sell and how they are displayed. This includes adding new products, setting prices, and organizing items into categories.
Customer Data	You can collect and analyze data about your customers. This helps you understand what your customers like and need, so you can improve your products and services.
Payments and Shipping	You manage how payments are processed and how products are shipped. You can choose different payment gateways and shipping options that work best for your business.
Marketing and SEO Tools	These tools help you attract more customers to your store. You can create marketing campaigns, optimize your site for search engines, and track your marketing performance.
Inventory Management	You can keep track of your stock levels and manage your inventory efficiently. This ensures you know when to reorder products and can prevent stockouts or overstocking.
Security Features	The platform provides security measures to protect your store and customers’ data. This includes SSL certificates, fraud detection, and secure payment processing.
Analytics and Reporting	You can access detailed reports and analytics to understand your store’s performance. This helps you make data-driven decisions to grow your business.
Mobile Responsiveness	Your store will look great and work seamlessly on all devices, so customers can enjoy a hassle-free shopping experience, whether they’re using a smartphone or a tablet on the go.

What Is An eCommerce Marketplace?

An eCommerce marketplace is a place where various individual businesses come together to display and sell their products. Typically, these platforms are owned and operated by a third party. 

A prime example of this is Amazon, which not only sells its own products but also provides a platform for other businesses to showcase and sell their goods. As a result, consumers have the option to buy a Columbia t-shirt either directly from Columbia’s official online store or Amazon or a similar marketplace app. 

The marketplace is managed by its owner. The owner does not typically sell their own products but provides a space for other businesses to reach customers. They are in charge of attracting new vendors, ensuring a smooth user experience, providing secure transactions, providing customer support, and handling marketing and promotion. 

Marketplace owners earn money through commission fees, listing fees, subscription fees, advertising, sponsored listings, transaction fees, and value-added services such as logistics and fulfillment.

Let’s look at the main features of an eCommerce marketplace:

Features	Description
Wide Reach	Access to a large number of customers who visit the marketplace. This means you can reach more people without spending a lot on marketing.
Managed Services	The marketplace often handles payments, shipping, and customer service. This makes it easier for you to focus on selling your products.
Easy Start	It is easier to start selling because the platform is already built and known by customers. You don’t need to worry about creating a website or attracting visitors.
Shared Traffic	You benefit from the marketplace’s existing customer base. People who come to the marketplace for other products might also discover your items.

eCommerce Platform Vs Marketplace: What Are The Differences?

An eCommerce marketplace is made using an eCommerce platform. I’ll use an example to make it easy for you to understand.

One key difference between an eCommerce platform and a marketplace is the number of stores or sellers on the website. When you use an eCommerce platform to create a website, it only includes your shop. However, if you choose to sell on a marketplace, you will be competing with thousands of other sellers on the same site.

Here’s an overview of how they work in terms of business and selling products: 

	eCommerce Platform	eCommerce Marketplace
Traffic	Relies on SEO, content marketing, and paid advertising to drive traffic.	Generally attracts more visitors due to multiple sellers and diverse products.
Marketing	The shop owner is responsible for generating leads.	They draw in, develop, and interact with leads via the website.
Inventory	They maintain inventories.	They do not maintain inventories.
Cost	Website development, hosting, marketing, marketing, payment, gateway fees, and transaction fees.	Marketplace fees (commissions, listing fees), shipping costs, and potentially inventory management costs.
Time	They need the owner to set up the complete site, which can be time-consuming.	They are quick to set up.

Benefits Of eCommerce Platform

An eCommerce platform is a software application that enables businesses to create and manage an online store. It benefits businesses by providing the necessary tools and infrastructure to sell products and services over the Internet. 

Let’s have a look at the common benefits of an eCommerce platform:

• Full Control: From design to promotions, you can decide everything about your store. This helps in building a strong brand identity. You can create a shopping experience that reflects your vision and attracts your target audience.
• Customer Loyalty: You can create a loyal customer base by providing personalized services and offers. By understanding your customers’ preferences and buying habits, you can tailor your products and marketing strategies to keep them coming back.
• Data Ownership: You own the customer data, which helps in making informed business decisions and targeted marketing. This data is valuable for analyzing trends, improving your products, and crafting effective marketing campaigns.
• Scalability: An eCommerce platform can grow with your business. You can start a small online business and then expand your online store as your customer base increases. You can add more products, categories, and features without any hassle.
• Higher Profit Margins: By selling directly to customers online, you can eliminate intermediaries and reduce overhead costs associated with marketplaces. This can result in higher profit margins for your business.
• Stronger Customer Relationships: An eCommerce platform allows for direct interaction with your customers. You can collect feedback, answer queries, and resolve issues promptly. This will help your business build trust and stronger relationships with your customers.

Benefits Of Marketplace

An eCommerce marketplace is an online platform where multiple sellers offer products or services to customers. The marketplace operator connects buyers and sellers for transactions and provides a common space for a wide variety of goods and services. 

Let’s look at the common benefits of an eCommerce platform:

• Quick Start: Setting up on a marketplace is fast and easy. You don’t need to worry about creating a website from scratch. The marketplace provides the platform, and you just need to list your products and start selling.
• Large Audience: Marketplaces attract many buyers, giving your products more exposure without much effort. People trust these platforms and visit them regularly, increasing the chances of your products being seen and purchased.
• Managed Operations: Marketplaces handle many operational tasks like payments and shipping, so you can focus on selling. This saves you time and reduces the complexity of running your business, allowing you to concentrate on growing your sales.
• Reduced Operational Costs: Marketplaces often provide the infrastructure, support, and tools you need to sell your products. This can be more cost-effective than managing these aspects yourself. 
• Lower Initial Investments: Starting your business on a marketplace requires less initial investment. You don’t have to invest heavily in developing your website, marketing, or logistics. This makes it easier for small businesses and startups to enter the market and start selling their products.

How Do You Choose Between An eCommerce Platform And A Marketplace?

When deciding between an eCommerce platform and a marketplace for your business, it’s crucial to understand the key differences for each option. You also need to keep in mind how you can benefit from them. Business goals, budget, and controllability are some of the major factors to consider before choosing between these two. 

Consider Your Goals

• Brand Building: If building a unique brand is important, an eCommerce platform is better. You can create a distinctive shopping experience and establish a strong brand presence.
• Reach and Sales: If you want quick access to a large audience, a marketplace is a good choice. You can start selling quickly and reach more potential customers without heavy marketing efforts.

Budget

• eCommerce Platform: Higher initial costs but better for long-term branding and growth. You need to invest in setting up your store, but it pays off as you build your brand.
• Marketplace: Lower upfront costs but higher ongoing fees and less control. While it’s cheaper to start, you will pay fees for each sale, and you have less control over your brand.

Control Needs

• eCommerce Platform: Offers more control and flexibility. You can decide how your store looks and operates. From this, you get the freedom to innovate and improve your project.
• Marketplace: Less control but easier management. You follow the marketplace’s rules and use their tools, which simplifies operations but limits customization.

Scalability

• eCommerce Platform: Better for long-term scalability. You can expand your store, add new features, and integrate with other tools as your business grows.
• Marketplace: Scalable to an extent but limited by the marketplace’s rules and infrastructure. You can grow within the marketplace’s ecosystem, but your growth is tied to their platform’s capabilities and restrictions.

If you want to create and manage your online store with a software solution by yourself, you should choose an eCommerce platform. On the other hand, if you need quick access to a large audience and easier management without the responsibility of building, updating, and maintaining the system, a marketplace would be ideal for your needs.

How Can 6amMart Help You?

If you are looking for a solution to start an eCommerce marketplace, 6amMart can be an Ideal option for you. 

6amMart is ideal for anyone looking to start or expand an online marketplace. It is a multivendor eCommerce marketplace solution that allows you to operate and control various businesses in one place. So, it’s ideal for someone looking to start their eCommerce marketplace. 

Built with PHP, Laravel, and the Flutter framework, 6amMart provides all the things you need, including a Laravel admin panel, a store panel, a store app, a user app, a user website, and an admin landing. It’s got everything from product and order management to coverage area mapping. Plus, with multiple payment gateways and support for multiple languages, you’ll be able to reach a diverse customer base. And don’t forget about the detailed analytics and reports to help you make smart business decisions!

6amMart provides all the tools you need, regardless your business is already established or a new one. You can expand into new markets, diversify your product categories, or manage delivery personnel and zones efficiently with its multi-module system. And if you’re a developer, you’ll love how easy it is to customize and integrate the platform to meet your specific project needs.

Conclusion

In this blog, you learned about the differences between eCommerce platforms and eCommerce marketplaces. An eCommerce platform provides complete control and direct customer relationship maintenance ability. Conversely, eCommerce marketplaces provide a quick start with access to a large audience, but less control over branding and customer interactions.

If you value branding and customer loyalty, an eCommerce platform is best. If you want quick access to a broad audience, a marketplace is suitable. If you want to choose a market-ready solution to build your marketplace, 6amMart is ideal.