Disadvantages Of Opening Marketplace Store

5 Limitations of Selling on Marketplaces

ecommerce, marketplace stores

Today, we will talk about the advantages of opening an e-commerce store vs. a marketplace, such as Etsy, Amazon or eBay.  This doesn’t mean that there are not any advantages of opening a marketplace store, you can read my article on the advantages that these marketplaces have to offer… here.

Fierce Competition –  A purchaser could possibly view exactly what you are selling alongside 20 other stores selling your same product for higher or lesser prices.  Etsy is a choice instance of a ‘flooded market’.  Meaning, that each buyer has many choices when typing in a keyword.  Even when the buyer is on your page, Etsy promotes other stores with like items that draw the engagement away from your store to another.  Standing out from other stores can be achieved, but it requires some time and money to get there.

Prices –   Fairly often they look minimal, $0.20 per listing, but prices quickly do pile up as time passes.   Etsy fees have no monthly charge, however a purchase fee of 3.5 percent on top of $0.20 each time you post a new listing.  The killer is Etsy charges $0.20 every time one item in a multiple item listing sells.  For example, I sell letter initial charms at roughly $1.00 per charm, however, I have 26 different items (A-Z letters), each time ONE charm sells, Etsy charges me a $0.20 re-listing fee.  In one month, my letter initial listing was charged $40.00 in re-listing fees. Outrageous!!  AS opposed to opening an online store and paying $20.00 per month and sell however much you like. Amazon prices are not quite as complicated, but if you are selling over 40 items a month, then a flat cost of $39.99 is not for you. The market owns each purchase of yours, not you.

Marketing – Being a Marketplace owner means that, you cannot request mailing lists, FB information and you cannot upsell your products to raise your product investments.  In this day and age where customer loyalty is everything, this can be a drawback.  Additionally, keep in mind that many marketplaces can opt to shut your shop down at any stage, no notice and permanently.

Branding –  Most marketplaces are rather restrictive in the way you are able to brand your ‘shop’.  Typically, it is possible to give yourself a title, some sort of header picture and perhaps even some sort of ‘latest news’ place.  This is partially because of this ‘trust’ variable.  Marketplaces are extremely restrictive in the way they allow owners to promote themselves and dominate the marketplace experience as it is the market’s sale, not yours.  Marketplaces reaches some countries, depending on the demand and numbers it draws in.  In the event that you or your target market are not found in a few of the more recognized nations, your choices will be severely restricted.

Marketplace Takeaways – Small upfront capital investment implies marketplaces are a fantastic spot to set up shop, because there is a market already in place for selling.  Simplification at it’s best, Etsy makes it effortless for your non-tech nature to receive a bit of the e commerce pie.  As your stock product grows, the above mentioned prices and limitations can make profit and growth hard.

In my opinion, start with both.  Open an Etsy or any other Marketplace store of your choice and at the same time open your own branded website.  Promote your website to your marketplace customers and when you’re comfortable building your own brand, not somebody else’s!

Until next time…

Prosperity and Good Luck

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