Choosing Between a Web Store and a Marketplace - Weighing the Factors
Created: Mar 17, 2021
Updated: Feb 14, 2025
The share of retail sales of Amazon, Walmart, Etsy, and a lot of other marketplaces keeps increasing each day. This is coupled with the fact that a ton of new sellers emerge annually.
Compared to physical stores, online websites tend to have fewer limitations and more advantages. These limitations may include lower outreach, geographical limitations, and fewer metrics. They may help in the measurements of Return on Investment (ROI).
Like a web store, marketplaces such as Etsy, Amazon, and eBay, come with upsides and downsides alike. To be sure of which to choose between a web store and a marketplace, hang on to this read. You'll find out!
Web Store and a Marketplace- What’s the Difference?
Here are some notable differences to note about a web store and a marketplace:
Web Store:
This is a store that can be found online. In most cases, prospective and existing customers know the owner (s) of a web store. As a customer, you can have direct contact with the owner(s) to exchange their goods/services.
Marketplace:
This is the direct opposite of a web store. Here, third-party services are contracted to help business owners make their products available online to their prospects. eBay, Amazon, Walmart, and Etsy are clear examples of the marketplaces that dominate the online space today.
Since Covid-19, many people have been able to adjust to the new normal (social distancing). This development caused the physical stores to embrace innovation as a way of keeping their different businesses afloat. To that effect, "online shopping" which became a recent trend profited and will experience more expansion.
In the middle of the pandemic, Changes in Consumer Behavior Trends has been occurring. Further, most physical stores had to limit their sales to their locally based clientele. This is more reason why online stores are regarded well as they help with more outreach.
If you hope to launch an online store, there are two major ways that you can go about it:
You can employ the use of web stores with some of the best SaaS companies like Shopify, BigCommerce, Woo-commerce, and a host of others.
Sell on online marketplaces like Etsy, Walmart, Amazon, eBay, etc.
Why You Should Sell in a Marketplace
A lot of new sellers when asked to choose between the two online methods of selling usually go for marketplaces. According to an evaluation done by USPS and ComScore respectively, about 97% of prospective buyers go through products on online marketplaces first before making a final purchase.
In all, a marketplace helps a seller to create an online presence.
Advantages of Selling in a Marketplace
Easy to get Started:
One of the main reasons why a marketplace should be considered by sellers is because of the ease that accompanies it. The innovative mechanisms and features put in place on these platforms help for the easy tracking of a product's performance. Also, there isn't a need to invest a huge amount in hosting, domain names. This allows you to focus on the other complexities involved in setting up a standard website.
In-Built Audience:
Hubspot's State of Inbound in 2018 mentioned that up to 61% of marketers confirmed the difficulties involved in attracting the right audience to their products. But in a marketplace, this issue is solved. Loyal customers are ever willing to jump on product purchase(s). Besides, a higher number of people who also revisit frequently repeat purchases.
In other words, as a seller in a marketplace, generating traffic won't be much of an issue as that is already fixed.
Mobile Apps and Their Effect:
In recent times, mobile phones have taken a larger share of e-commerce product searches as opposed to desktops. Since most marketplaces are buoyant with resources, they came up with mobile phone apps. This helps customers navigate through their preferences.
These apps also deliver regular messages that help to keep customers updated and informed on any new changes regarding the products.
Therefore, if you're an online seller registered on any marketplace, your listed products will be shown to your prospects on their mobile apps. This is one of the quick ways to improve your product viewership. This, in turn, results in massive sales and an increase in revenues.
Wider Payments Options:
Marketplaces are known to present customers with a variety of payment options. These payment systems are unified with the marketplace for easier transactions. Doing this helps to prevent cart abandonment.
Faster Shipments:
Aside from Fulfilment by Amazon (FBA), most marketplaces use other shipment services such as ShipBob, eFulfillment Service, ShipMonk, etc. As an online seller, these services help to relieve you of order managing and shipping responsibilities.
Pitfalls of Selling on Marketplaces
As much as it has pros, marketplaces also come with certain cons. While you can get new buyers on marketplaces, it is almost impossible to resell products to them through promotions and offers. Because of this, you may experience loss when it comes to customer retention. Asides from these, there are other disadvantages of using a marketplace as a seller. Let's see them below:
The Marketplace Fee:
Generally, no marketplace would let you sell your products if they won't be getting their monetary share of your sales. To them, it's a business, and everyone who's in a business expects to gain from it.
All marketplaces on the internet usually have a fee or a levy that sellers are required to pay. These can come in the form of a percentage of a seller's revenue or a fixed amount. After they are done paying the fees attached to selling on these marketplaces, sellers may have little returns to take home at the end of the day.
The Pressure of Being Affordable:
Many marketplaces make use of the Buy Box system. In this case, if a seller is giving out a deal or service that's better than yours, it means that you won't be making as many sales as you should. With the Buy Box feature available on all marketplaces, a seller with an inferior product might make more sales. This is because of better prices. This can be entirely discouraging.
The Competitor, Just by the Neck:
Unlike a web store where you can make brand moves that are aimed at putting you high above your competitors, a marketplace limits you. It lets you sit just beside your competitor. Here, your competitor knows your every move. This further pressurizes to create a great listing.
If you're not able to do that, it may be impossible to prove how great your services are. This, in turn, allows your customers to choose from the various options available.
Not Generating a Loyal Customer Base:
Many customers who buy from these marketplaces may not know the real names of the businesses they buy from. As a result, each time they need to make a purchase, the first thing that comes to their mind is the name of the marketplace. Simply put, marketplaces obstruct your chances of creating brand awareness amongst your customers.
There are also cases of malpractice by competitors. This can cause your business a lot of harm.
Selling on a Web Store
One reason why sellers would choose a web store over a marketplace is the idea of being in total control of your business.
In a web store, you're expected to set up a website and provide a web address. It acts like a retail store where you can put up any product of your choice and then have customers come and make purchases. The customers who visit a web store are virtual.
Before getting your preferred web store, ensure that your time and resources are put in place. In all, getting a web store saves you from stress and other issues that can be likened to a marketplace.
Open Source or SaaS-Based Platforms for a Web Store:
In creating web stores, there are two main platforms that you can use - SaaS and Open Source. While the owner handled Open source, the supplier handled SaaS. If you're looking to launch your web store, then you must understand how to select the Best eCommerce Platform for your Online Store.
Why Do You Need a Web Store?
You need a web store because the products and services you offer need to be of relevance. Setting up a website will help you to distinguish yourself from your competitors.
To further make your business stand out, a tagline, logo, and a clear brand voice are required. These will help to project your brand message. This isn't possible if you're selling in a marketplace.
Benefits of Opening an Online Store
User Interface:
Whether you're launching your business on a web store or marketplace, there are things you should know. First, you must know that a lot of features accompany these platforms based on SaaS.
These features include language selection, customizable themes, shipment, pricing, order management, etc. All are built to help for easy management of your store. There’s more.
People who come to purchase your products also get to have a wonderful experience while shopping. In other words, using the excellent system of a web store is one of the quickest ways to make a great first impression with your new customers.
Create Your Customer Base:
One other reason why web stores are recommended is that you as a seller can easily obtain the data of your website users. With web stores, you can actively engage in email marketing! You can also create a sales funnel that allows you to reach out to customers who are interested in your product. Loyal customer base is increased, and marketing cost decreases when you sell on your webstore.
Take-Home what you earn:
Unlike a marketplace, websites don't involve you paying for either sales or listing fees. Whatever you earn, you save and take home with you. The only fee that you will most likely worry about is the store maintenance fee. This depends on the SaaS platform it was built with.
24*7 Product Availability:
The desire of every business person is to have enough products to go around for each customer. This feat is achievable with web stores as you're free to list all products that you have in stock.
You can manage your inventory and prevent your store from running out of products. The same can't be said for Marketplaces as they tend to limit your listing to a specific number of products. A web store allows your buyers to shop at any time and any day they want.
Flexibility:
You don't need to wait for sale days like in marketplaces before you can announce discounts and offers on your products and services. Managing the activities of your stores becomes an easy nut to crack.
You can retarget shoppers to become repeat buyers:
Having customers who visit your store more than once is good for business. It helps you to restock your products. It's part of the things a web store guarantees you. It allows you to access your customers directly. This increases your chances of selling to the right audience.
How do you turn the right customers into repeat buyers? This can be done by targeting the people who click on your ads. You can also re-advertise to those who have purchased before and maintain contact with them by building an email list.
Personalizing the Shopping Experience:
When you sell through your web store, you can present and market your products in a way that's specific and unique to your brand. It's also a means of letting your customers get in touch with the personalized part of shopping. By doing this, trust and loyalty are built. This, in turn, translates to more sales!
Marketplaces, on the other hand, provides you with already existing customers. The only disadvantage of this is that it may take some time to gather customers. It might take time before they trust you. This is especially if you're new to the platform. But if you're selling unique products, you will make faster and better sales.
Problems and the Solution While Operating a Web Store
When you're choosing between a marketplace and a web store, you must understand that they both come with different issues. As a web store owner, you will most likely have less time and resources in your beginning days. The management of products, orders, and some other areas of running a store may take up a chunk of your time. The "time-consuming" aspect of running a web store makes you pay less attention to other important areas that will be beneficial to your business.
To manage these time issues, some SaaS platforms like Shopify built custom-built app pages. You can also get other wonderful applications from CedCommerce which is a partner with Shopify. It allows store owners to join their web stores and bring in products from marketplaces. If you want to make importing from other marketplaces easier, you can get the Multichannel Importer app.
With the Multichannel Importer app, you can import and list products from multiple marketplaces such as eBay, AliExpress, Amazon, etc. Some Shopify custom-built apps are used to integrate these stores. To make sales on multiple selling platforms easier, products are synced.
Setup can be time-consuming and technical:
Setting up your website can either be easy or complicated. This depends on what you want. In most cases, you can get your site running within a short period using innovative do-it-yourself tools. Nevertheless, you may run into some technical drawbacks or time-restricting issues.
The several steps involved in launching a web store includes:
The several steps involved in launching a web store includes:
Purchasing a hosting service and a domain name
Setting up a cart (for shopping)
Setting up software that will be used for processing credit card
Creating content for your store
While there are modern ways to handle tasks, you might need help. One way to solve this problem is by a web design agency to get the work done.
You have to work to get shoppers to your site:
As soon as you're done setting up your website, the next step is to get people who will buy your products. Usually, exposing your website to your target audience is the best way to go about this. To attract customers, you will need to invest in the right marketing campaigns such as PPC or hiring an SEO agency. This helps to improve your brand's visibility.
After attracting visitors to your website, it’s time to move a step further. You can plot strategies on how to make them pay for your products or services. Enhancing the mobile user experience is a great way to achieve this.
How to Choose the Right Platform for Your Business
In the fast-paced world of e-commerce, choosing the right platform to sell your products can be the difference between success and failure. With so many options available, including the best marketplace websites and the best free web store platforms, it’s crucial to evaluate the unique needs of your business and your long-term goals before making a decision. Whether you’re considering an ecommerce website vs a marketplace or looking into the difference between website and online store, understanding what each platform offers will help you make the most informed choice.
1. Evaluate Your Product and Target Audience
Before choosing a platform, think about the nature of your products and the audience you want to reach. Marketplaces like Amazon and Etsy attract large, diverse audiences, making them perfect for sellers looking to gain quick exposure. On the other hand, if you have a niche product or want more control over branding and customer experience, an ecommerce webstore could be a better fit.
2. Budget and Cost Considerations
When it comes to setting up your online store, budget plays a huge role in the decision-making process. Best free web store software options like WooCommerce or Shopify’s free trials can help you get started without breaking the bank. However, keep in mind that running a store on a marketplace typically comes with listing and transaction fees, which can eat into your profits over time. If you're looking for a cost-effective solution, consider a best free web store platform that offers scalability as your business grows.
3. Ease of Setup
If you're looking for simplicity and speed, an easy web store may be the way to go. Many platforms like Wix or Shopify offer drag-and-drop functionality that doesn’t require technical expertise. If you're new to e-commerce, opting for free web store software that provides intuitive design and setup tools might be your best option. Conversely, setting up a marketplace account is often quicker, as you’re simply listing products on an established platform. However, you’ll need to factor in whether you can control how your brand is represented.
4. Control Over Branding and Customer Experience
With a webstore or an ecommerce website, you have full control over the look and feel of your site, which can play a huge role in building your brand identity. You can create a unique shopping experience tailored to your customers' preferences. In contrast, marketplace websites may limit your ability to customize your storefront, and you may have to compete with multiple sellers offering similar products.
5. Scalability and Long-Term Goals
While marketplaces offer instant access to customers, they can be restrictive in the long run. If you plan on expanding your business, building an e-web store from the ground up offers better scalability. You can integrate tools, track customer behaviour, and utilize SEO strategies to drive traffic directly to your site. Ultimately, a marketplace may be a great place to start, but an ecommerce webstore is better for growth and sustainability.
Choosing the right platform is all about understanding what fits best with your business needs. Whether you opt for an ecommerce website vs marketplace or decide on a best marketplace website, the goal is to build a foundation that supports your business vision.
Conclusion:
Above all, listing and selling products are quite easy when done on marketplaces. But as a seller who's thinking long-term, it may be impossible to achieve your visions with a marketplace. This is why web stores are recommended. Web stores help you to operate better, generate leads, and convert visitors into buyers.
Because marketplaces and web stores both have disadvantages, the best thing to do is to make use of their advantages to the best of your ability. You can start by increasing the number of your customers. Then, try to get them to visit your web store through discounts and referral codes.
The Role of SEO in Marketplaces vs. Web Stores
In today’s digital landscape, businesses must decide whether to sell their products on marketplace websites like Amazon, eBay, or Etsy, or to create their own online store vs website. Each approach has its advantages and challenges, and SEO (Search Engine Optimization) plays a crucial role in determining visibility, traffic, and ultimately, sales.
SEO for Marketplace Websites
Selling on marketplace platforms provides an immediate audience, but competition is intense. Since marketplace websites already have high domain authority, sellers can leverage this to rank higher in search results. However, SEO within a marketplace focuses more on product listing optimization, including:
Keyword Optimization: Titles, descriptions, and tags should include relevant keywords.
Product Images & Descriptions: High-quality images and detailed descriptions improve rankings within the marketplace.
Pricing Strategy: Competitive pricing influences rankings, especially on platforms like Amazon.
While marketplaces provide a strong SEO advantage within their own ecosystem, they offer limited brand control. Sellers are bound by platform rules and face competition from other vendors, including the marketplace itself.
SEO for an Independent Web Store
If a business decides to open a website that looks like an eBay store, SEO becomes more complex but also more rewarding in the long term. A self-hosted web store, especially with open-source web store solutions like WooCommerce or Magento, allows full control over branding and marketing. Key SEO strategies for an independent web store include:
Content Marketing: Blogs, guides, and videos drive organic traffic.
Link Building: Backlinks from reputable sources enhance domain authority.
Technical SEO: Proper site architecture, schema markup, and meta tags help search engines index the site efficiently.
Marketplace vs. Own Website: Which One is Better for SEO?
When comparing marketplace vs. own website, marketplaces provide instant traffic but limit branding and customer relationships. Setting up a web store requires more effort but offers greater long-term rewards, including higher profit margins and full marketing control. Businesses seeking sustainability often use a hybrid model—selling on two online shopping websites while maintaining their own website for brand credibility.
Ultimately, the right choice depends on business goals, resources, and marketing strategy.
How to Manage Multiple Channels (Web Store + Marketplaces) Effectively
Expanding your business across multiple sales channels, such as a web store and a web marketplace, can significantly increase reach and revenue. However, managing both effectively requires the right strategy, tools, and optimization techniques. Whether selling through a web app marketplace, an independent web shop, or a combination of platforms, businesses must streamline operations for maximum efficiency.
1. Centralized Inventory and Order Management
Managing stock across a web store and multiple marketplaces can be challenging. A centralized inventory system helps:
Prevent overselling and stock discrepancies.
Automatically sync inventory levels across platforms.
Track real-time sales data for better forecasting.
Many web store design software solutions integrate with marketplaces, making it easier to manage products in one place.
2. Optimized Product Listings for Each Platform
A well-optimized web store design and marketplace presence require tailored product listings. Each channel has different SEO rules and ranking factors:
Web Store SEO: Focus on structured data, long-tail keywords, and high-quality content.
Web Marketplace SEO: Prioritize keyword-rich product titles, descriptions, and images to match marketplace algorithms.
Using a web development marketplace approach, businesses can hire professionals to refine their listings and improve conversions.
3. Unified Customer Support & Communication
Customers expect seamless service whether they buy from a web site store or an online marketplace. Implementing a unified support system ensures:
Faster response times for customer inquiries.
Consistent brand messaging across all platforms.
Better review management to maintain a positive reputation.
4. Multi-Channel Marketing Strategy
A balanced marketing approach is essential for visibility and brand recognition. Effective strategies include:
Email Marketing: Direct engagement with web store customers.
Social Media & Ads: Promote marketplace listings and web shop products.
Content Marketing: Drive organic traffic to the web store while supporting marketplace credibility.
5. Choosing the Right Tools & Integrations
Automation is key to efficiently handling a web design marketplace alongside an independent store. Popular integrations include:
Customer Trust and Retention: Marketplaces vs. Web Stores
Building customer trust and retention is critical for any online business, whether selling through a web store ecommerce platform or a popular marketplace like eBay or Amazon. While marketplaces provide instant credibility due to their established reputation, independent web stores offer greater control over customer relationships. Understanding how each model impacts trust and loyalty can help businesses choose the right approach.
1. Customer Trust in Marketplaces
Marketplaces like Amazon, Etsy, and Webretailer eBay offer built-in trust due to their established reputation. Customers often feel more secure purchasing from well-known platforms because of:
Buyer Protection Policies: Marketplaces provide refunds, guarantees, and dispute resolution.
Verified Seller Ratings: Reviews and ratings influence purchasing decisions.
Brand Recognition: Shoppers already trust the marketplace, reducing skepticism.
However, businesses face challenges such as:
Limited brand identity, as the marketplace controls customer interactions.
High competition from other sellers and even the marketplace itself.
Dependence on platform rules, which can change unexpectedly.
2. Customer Trust in Independent Web Stores
When operating a standalone web store system, trust must be built from scratch. However, businesses benefit from full control over:
Branding & Personalization: A well-designed web shop creates a professional image.
Customer Experience: Businesses can offer tailored support, loyalty programs, and exclusive deals.
Secure Payment & Data Protection: Implementing SSL certificates, secure checkout options, and trust badges reassures customers.
Investing in a reliable web store platform with features like user-friendly navigation, fast loading speeds, and seamless checkout can significantly improve trust.
3. Customer Retention Strategies: Web Stores vs. Marketplaces
Retaining customers differs between web stores and marketplaces. Key strategies include:
For Marketplaces:
Encouraging positive reviews to improve credibility.
Offering competitive pricing and fast shipping.
Providing excellent customer service to boost repeat purchases.
Email Marketing: Personalized emails with special offers increase engagement.
Omnichannel Strategy: Implementing a web to store approach encourages online shoppers to visit physical locations if available.
4. Web Store vs. Marketplace: Which One Wins in Customer Trust?
When comparing a webshop or web shop to a marketplace, the choice depends on business goals. Marketplaces offer instant credibility but less control, while independent web store solutions require effort to build trust but foster stronger customer loyalty.
Ultimately, a hybrid approach—selling on both platforms—can maximize trust and long-term retention.
How to Leverage Analytics and Insights for Business Growth
Data-driven decision-making is essential for scaling a business, whether operating a website as a marketplace, an independent webstore ecommerce, or selling through website marketplaces like eBay and Etsy. By leveraging analytics and insights, businesses can optimize operations, enhance customer experiences, and drive sales growth.
1. The Role of Analytics in Online Selling
Analytics provides valuable data on customer behavior, sales trends, and marketing performance. Whether running an independent webstore online or selling through website selling marketplaces, insights help businesses:
Understand audience demographics and preferences.
Improve product listings and pricing strategies.
Optimize marketing efforts for higher ROI.
Businesses using websites like Etsy and eBay must analyze both platform-specific and external data to refine their strategies.
2. Key Metrics to Track for Business Growth
To effectively use analytics, businesses must monitor:
Traffic Sources: Where customers are coming from (organic search, paid ads, social media).
Conversion Rates: Percentage of visitors who make a purchase.
Customer Lifetime Value (CLV): The total revenue generated by a single customer over time.
Cart Abandonment Rate: Percentage of customers who leave without completing a purchase.
Sales Performance: Best-selling products and revenue trends.
For a webstore ecommerce platform, tools like Google Analytics and Shopify Insights provide these metrics, while website marketplaces have built-in reporting tools.
3. Using Analytics for Website Marketplaces vs. Independent Webstores
The approach to analytics differs between selling on website marketplaces and running an independent webstore online:
Website Marketplaces (eBay, Etsy, Amazon)
Use marketplace analytics tools to track sales performance.
Optimize product titles, descriptions, and images based on search trends.
Monitor competitor pricing and adjust strategies accordingly.
Independent Webstores
Utilize Google Analytics, heatmaps, and A/B testing to improve user experience.
Leverage email marketing insights to engage and retain customers.
Implement SEO strategies based on keyword performance data.
4. Turning Insights into Actionable Strategies
To maximize business growth, data must be translated into action:
Improve Marketing Campaigns: Use traffic and conversion data to refine advertising efforts.
Enhance Customer Experience: Address pain points identified through user behavior analysis.
Optimize Product Offerings: Stock more of high-performing products and improve underperforming listings.
By strategically leveraging analytics, businesses—whether operating a website selling marketplace or a standalone webstore ecommerce—can drive sustainable growth and increase profitability.
Future Trends in E-Commerce: Web Store vs. Marketplace
E-commerce is evolving rapidly, with businesses facing a critical decision: sell through webstores or marketplaces? Understanding the key differences between these models and the future trends shaping them can help businesses stay ahead. While marketplaces offer massive reach, webstores provide complete control over branding and customer experience. As technology advances, both approaches will see significant transformations.
Future Trends in Marketplaces
Marketplaces are becoming increasingly sophisticated, offering new tools for sellers and buyers. Some key trends include:
AI-Driven Personalization: Platforms like Amazon and eBay are using AI to personalize product recommendations.
Faster Delivery Expectations: Marketplaces are investing in same-day and drone delivery to stay competitive.
Sustainability & Ethical Shopping: Consumers prefer marketplaces that promote eco-friendly and fair-trade products.
Voice & Visual Search: Features like image-based shopping and voice assistants are enhancing the search experience.
While marketplaces will continue to dominate in terms of traffic, sellers will face growing competition and higher fees.
Future Trends in Webstores
The future of webstores is shifting towards greater independence and innovation. Businesses running their own web store can expect:
Headless Commerce: Separating the front-end and back-end for more flexible and custom user experiences.
Augmented Reality (AR) Shopping: Virtual try-ons and 3D product previews will enhance engagement.
Subscription & Membership Models: More businesses will offer exclusive content, discounts, and VIP experiences.
Omnichannel Integration: Webstores will seamlessly connect with physical stores, social media, and mobile apps.
Web Store vs. Marketplace: Which Will Dominate?
Marketplaces will continue to attract new sellers due to their massive audience and convenience. However, competition will be fierce, and fees may rise.
Webstores will gain traction among brands seeking more control over their business, particularly with advancements in technology that make launching a store easier than ever.
Many businesses will adopt a hybrid approach, selling on marketplaces for visibility while using their own webstore to build long-term customer relationships.
FAQs
Which one allows me to have more control over my brand?
A web store will give you full control over your brand: design, customer experience, and pricing.
Are marketplaces more cost-effective than web stores?
While marketplaces' setup fees are lower, generally, on every sale, they charge, so ultimately it may prove to be more costly.
How does the acquisition of customers work differently with a web store compared to a marketplace?
Since marketplaces attract a large audience organically, this cuts down on your marketing efforts, while the case of a web store requires you to struggle with more marketing and drive traffic to your site.
Can I build a stronger brand identity with a web store or a marketplace?
A strong, unique brand identity can be built with a web store since you have full control over user experience and elements of branding.
What are the possible disadvantages of the marketplace?
The drawbacks to this include limited control over branding, having to be behest to marketplace policies, and undeniable competition from other sellers that share the same platform.
Can a web store and selling on a marketplace coexist?
Yes, many companies do both, to maximize reach, but it requires careful management of pricing, inventory, and the customer experience.
