Should I Sell Products at My Own Website or a Third Party Marketplace?

by Chris Warden

Where should you sell your products online? Will they do better if you sell them on your own website, or should you sell them somewhere else, like Amazon, Etsy or Ebay? Here's what you need to know about selling through third party marketplaces versus a product specific website.

website versus marketplace
Image source: Photospin.com

This is a question that seems to come up regularly with new e-commerce sellers. It surprises me actually, because the answer isn’t something that can be given using broad generalities.

For a niche store with hard-to-find products, your own store might work great. The keywords shouldn’t be highly-competitive (which should net you at least some organic traffic) and you’ll avoid the commissions you’d pay out to eBay, Etsy or Amazon. Your own store could prove beneficial is for bid-type purchases that require customization and therefore can’t use set pricing, or even large ticket items that are in the tens of thousands (or more) of dollars range.

For nearly everything else, you’re almost always better setting up a store with a trusted online retailer.

The problem with a niche online store lies within the fact that buyers don’t usually buy at random, and they’re far less likely to buy from an unknown, and by extension, untrusted online retailer.

Why Buyers Buy From Online Shopping “Hubs”

While a niche e-commerce store could mean big business less than a decade ago, chances are you’re far more likely to strike it big in an existing marketplace now. Back then the big brands didn’t control the online shopping market the way they currently do, and if you’re honest with yourself, you know that when looking for an item online, you go to one of a handful of major retailers. Right?

The reason behind this is simple. They trust these sites. They’re mainstream, and chances are they’ve either purchased an item from one of them in the past, know someone who has, or have seen enough marketing material in the form of print ads and commercials to know - or at least assume - that they’re trustworthy.

Amazon, eBay and Etsy are trustworthy because they’re huge, they receive a ton of word-of-mouth, or you’ve seen enough of them to recognize the brand. . In fact, recent numbers show that 86% of online shoppers shop at Amazon.

RELATED: 6 Ways to Boost Your eBay Sales

Buyers know that in large marketplaces, sellers have to keep things above board to avoid being thrown out. This builds trust, and trust turns into sales. In addition, all of these marketplace have systems in place to protect buyers should they run into a dishonest seller. Customers don’t have this same piece of mind at your web store.



Think about it this way, when you purchased your last item on Amazon, do you remember the seller you purchased it from? Chances are, you don’t. That’s human nature. We remember we bought that HDMI cable on Amazon, not from seller “BobFromWashington.”

RELATED: How to Use Amazon as Your Consignment Shop

Knowing When Your Own Store is Worth It

As I’ve said, more often than not a third-party marketplace is your best bet. That said, there are some cases where it makes more sense to run your own store, at your own domain, and with your own branding. The truth of the matter is, there are only a handful of reasons that a store on your own domain makes much sense anymore.

Selling on your own domain allows you to pocket more cash, as well as designing the funnel from start to finish, and even capturing information that allows you the ability to market to this customer later. That said, not every business fits neatly into this model.

RELATED: 6 Ways to Run a Craft Business from Home

“Sometimes it really is better to give up a bit of profit, and control in order to do more volume,” says Ryan Mulvany, Partner at Quiverr.com.

Your best bet is to deal with a professional, or a company that can better describe the unique challenges you’ll face and what options are available to you. Sometimes the best bet is mix of multiple avenues, or perhaps an idea that you haven’t thought of yet.

My general advice is to test across multiple marketplaces when starting out. Find your top performers and spend your time where it matters most. Good luck.

Chris Warden is a seasoned entrepreneur and executive. Starting his entrepreneurial career at age 19, he has performed in numerous capacities owning and managing both offline and online companies. You can connect with Chris via Linkedin or Twitter - @ChrisWarden_SE.
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