Trying to choose the best selling platform for your eCommerce business?
Step 4 in the How to Start an eCommerce Business series is all about achieving exactly that. If you haven’t already, catch up on this exclusive series about building an eCommerce business through the links below.
Step 1: Choose a Product Niche
Step 2: Choose a Fulfillment Strategy
Step 3: Build Supplier Relationships
In this column, I want to present you with the options that you have to sell your products online. I’ve been selling products online for the past 6 years and have experience selling on Amazon, eBay, Newegg, Craigslist, my own online store, and client’s online stores. I’ve had a comprehensive experience of the different selling channels and I want to inform you of the pros and cons of each one.
By the end of this column, you should have a strong idea of where you should begin selling your products and, more importantly, why. If you have any questions, feel free to leave them in the comments section and I will get back to you quickly.
Importance of Choosing the Right Online Channel
I can’t express enough how important it is to choose the right sales channel as you start your first eCommerce business. The major decision that any eCommerce business owner must make is where they will first offer their product(s) for sale.
Will you sell on your own website?
Will you sell through an online marketplace?
1. Your Own Website
If you choose to sell through your own website, you then must decide how you’re going to get that online store built. From my experience, you have 2 core options that have emerged as the leading online store builders of today.
Option 1: Shopify
Shopify has quickly become one of the most popular store building platforms for young eCommerce businesses and for brick and mortar companies expanding into online retail. I’ve been using the platform for the past year and have had a very positive experience. From customer support to the different functionalities of their admin panel, the experience has been as expected and more.
Pros of Shopify
- Easy to set up https and domain
- Great design themes available in app store
- Large ecosystem of developers in the app store
- Easy to set up check out process
- Simple management mobile app to access store on the go
- Ability to receive upgraded versions with more functionality and reporting
Cons of Shopify
- Monthly fee that is more expensive than other options
- Has its own programming language called liquid that makes it difficult to edit HTML or CSS without advanced knowledge
- Odd set up for product categories
- Requires technical or eCommerce background to fully optimize store for operations
Option 2: WordPress + WooCommerce
WooCommerce is a free plugin that integrates directly your WordPress site. It gives you the ability to easily add products, accept payments, and manage customers. I have been using WooCommerce for the past year as well and it’s definitely a strong option if you don’t want to invest into a monthly payment plan and more expensive custom theme.
Pros of WooCommerce
- Extremely easy set up into WordPress site
- It is free
- Massive developer ecosystem with thousands of plugins constantly being added and updated
- Integrates easily with PayPal and Stripe
- Intuitive user management interface
Cons of WooCommerce
- Limited with ability to design store to professional standards without developer
- Need to set up SSL on domain or sub domain on your own
- Usually need to create a sub domain and purchase new design theme if main website theme is not optimized for eCommerce.
- It’s only a plugin
If you choose to sell through your own website, you need to factor in the time and cost that it will take you to build the store to your liking.
2. An Online Marketplace
Over the past 10 years, online marketplaces have become more and more popular as they offer a one stop shop for all your shopping needs, low prices, and the ability to purchase from many sellers through one platform. I’ve had the experience of selling on Amazon, eBay, and Newegg and am also very familiar with Walmart, Etsy, and the new Jet.com. Each has its own unique pros and cons, but the overwhelming pro is that they take care of the marketing for you. Let’s take a look at each.
Option 1: Amazon
Amazon is the largest online marketplace in the US and is rapidly expanding into new countries and continents where eCommerce is becoming a part of everyday life. Millions of shoppers use Amazon for their shopping needs and its Prime membership makes its customers even more loyal because of the fast shipping times it offers.
Why Use Amazon?
- You want to capitalize upon the millions of eyeballs that they bring to the site on a daily basis
- You want to tap into using their FBA network of fulfillment centers to outsource order fulfillment
Option 2: eBay
Similar to Amazon, eBay has been around for 10+ years and continues to be a top niche marketplace for specific groups of buyers. They have many of the same seller policies and advantages as Amazon and offer a great channel for sellers with unique items. If you didn’t know, they started as a “garage sale for the Internet”. While Amazon dominates for everyday goods, eBay is your destination to find more off the grid products.
Why Sell on eBay?
- You have niche products that are not sold or in supply on eBay
Option 3: Newegg
Newegg is in the top 5 largest online marketplaces specializing in electronics and tech products. Unless you have a specifically techy selection of products, Newegg won’t be right for you. They have been attempting to break into new product categories, but it has been difficult with the dominance of Amazon in the US. Their customer support team is extremely hands on compared to other marketplaces.
Why Use Newegg?
- Your products are tech and electronics focused
Option 4: Etsy
Etsy has become the leading marketplace for handmade sellers and items. The company just recently went public and it continues to add more sellers and products everyday. Its content quickly gets picked up by moms and women searching for unique products on social media and offers a great channel for handmade sellers to get exposure on their goods.
Why Sell on Etsy?
- You are hand making all of your products.
Other Options: Walmart and Jet.com
Walmart and Jet.com both have growing marketplaces with a large variety of consumer goods. While these are absolutely options, I would not recommend choosing them as your primary strategy to sell your products as they are still young and the top 4 are much better options to get your eCommerce company off the ground.
Compare and Contrast: Your Own Online Store versus an Online Marketplace
There are certainly pros and cons to having your own online store versus selling through an online marketplace. Many eCommerce companies eventually capitalize on both opportunities, but my suggestion is to perfect one before you move onto another. I was in situations while running my first eCommerce company where we tried to expand into new marketplaces and it led to internal issues for the company. We were trying to do too much instead of staying focused on what we were best at. Stay focused on what you do best!
Pros for Your Own Online Store
- Greater ability to brand your company
- Greater ability to control the customer’s experience while shopping on your store
- No need to pay a % of every sale to the marketplace
- Fewer restrictions on selling than on a marketplace
- Greater ability to customize the design and feel of your store
- No dependency upon a larger company like Amazon or eBay
Pros for an Online Marketplace
- Customers are brought to your products –> much lower need for marketing efforts
- Easier to set up thank your own online store
- Larger ecosystems of sellers for advice, etc.
- Customers that trust the marketplace brand from the time you sign up
Cons of Your Own Online Store
- You have to generate traffic and convert those visitors into sales
- You have to build trust with the customer before they are willing to purchase through your store without thinking
- You have to take the time or hire someone to build your own online store
Cons of an Online Marketplace
- 10-20% of each sale goes to the marketplace
- You are limited by their selling guidelines –> you can get kicked off the marketplace if you do not follow their policies
- You are dependent on them for all sales
- You cannot brand your company as easily
- There is increased competition if you are selling pre-branded goods –> tens to hundreds of other sellers on each listing fighting for each sale
Making the Decision – “Which Do I Pick?”
Both your own online store and online marketplaces will require a certain degree of learning to get the ball rolling. The choice of which to choose really boils down to three core questions about your eCommerce business.
- What type of product are you selling?
- Handmade products are best for Etsy.
- Unique, hard to find products are best for eBay.
- Electronics and tech gear are best for Newegg.
- Pre-branded products could go either way.
- Private label products could go either way.
- How much do you want to brand your company or product?
- If a lot, then your own online store is best.
- If not a want, go with a marketplace.
- How much do you want to spend on marketing and attracting new customers?
- If you are a marketer and love this aspect of selling, start your own online store.
- If you are not an expert and want to simply compete for sales, go with a marketplace.
