The trend of startups like marketplaces, food delivery, online grocery has been catching the spotlight. India seems to be having a growing appetite for such startups. Sellers are relying on the marketplaces model to sell their products.
Well, deciding what to sell on the internet is easier than deciding how to sell online. Most sellers choose to use third parties websites to display information and products virtually. That means they let the marketplace operators process the transactions. There are many famous marketplaces out there Flipkart, SnapDeal, Amazon and more… Not to mention they have been increased in last couple of years. However, many experts have realized “These marketplaces can be harmful over time for the sellers“!! That means people can get long-term profits if they build and develop their own e-commerce sites instead of selling on marketplaces.
Why Sellers Choose Marketplaces
Marketplace is a secure and transactional website where sellers can sell their products or services to buyers without any face to face interaction. Buyers transactions are processed by a marketplace operator, and usually delivered by the seller. Marketplaces offer an easier way of setting up a virtual store online. Sellers don’t need to brainstorm about the design and they don’t need any skills. Not to mention they don’t need to deal with sales transactions. In a nutshell, marketplaces take care of everything. What sellers need to do is to prepare and list their products. They can get traffic and potential buyers without much effort. They only have one responsibility. It’s to pay a fee or commission to such marketplaces. Overall, it’s a quite tempting way to sell online.
Many sellers use marketplaces as a shortcut to selling their products on the internet. They don’t need to worry about the competition. Selling products online becomes easier as they only need to rent a space to display their products (sometimes no upfront fees, only commission on each sale). However, they should recognize that it isn’t beneficial for the long run businesses.
Many small businesses have realized this potential, and have chosen to sell their products on Flipkart, eBay, Amazon or even via their Facebook page but this doesn’t give an impression of professionalism.
Winning an online race is also about brand building. That means sellers/suppliers should establish their brand and improve their presence on the internet. This is a great strategy to achieve better profits in the long run. If sellers only focus on the online marketplaces, they can’t build a firm foundation for their business. There’s one problem when it comes to building an own brand. Gaining search presence and quality site to get visitors to their site are daunting tasks. Sellers need to prepare lots of budget and time. Even though it takes much time to grow, an online store can reap the full profits of the sales. The idea is to win the race in the long run. Smart sellers understand how to win the online race as It isn’t only about profits they are making currently. There are many other important factors to think about.
You’d never see a large, successful business sending their customers to marketplaces like eBay or Amazon to buy their products.
For small businesses, this isn’t a good idea. They use online marketplaces instead. It’s because they want to simplify everything. They want an instant result.
Marketplaces are a Bad Option in the Long Run
What makes online marketplaces aren’t good in the long run? The answer is simple. These sites don’t make sellers’ store worthy. Third-party marketplaces aren’t as great as people might think. Often time, it makes more sense to build and run an online store with their branding and domain. Selling products on a personal domain allows sellers to earn more cash. They can build the foundation from the beginning to the end. This method helps businessmen build a stronger relationship with their customers. Many experts agree with it. They consider that it’s better to give up some profits sometimes. Sellers need to focus on more volume, instead.
The competition is high on the internet. Not all sites are able to make sales and profits. However, it’s a long journey. Sellers should patiently establish their own site and brand over time. The goal is a long-term profit. What are the risks of owning an online store? There are many difficulties such as market fluctuation, strict Google algorithm updates, losing popularity, losing search presence, and others. These aren’t a nightmare for sellers. As a matter of fact, some people get more excited about those challenges.
Even though marketplaces help people understand how e-commerce works, they can help people flourish their brand. All businesses require a brand identity. Running an online store can help sellers achieve that goal. However, it takes much time and money to maintain the site. Not to mention people should prepare long-term plans for their online store. In the long run, this site provides lots of profits for the owner. Unlike online marketplaces, the profits don’t come immediately.
Overall, marketplaces aren’t good for brand building. Even though these sites help sellers improve profits and sales, they can’t help with branding. The brand process requires numerous phases. It includes business and audience analysis. Running an online store is a good start to build the business brand. Sellers are able to perform business analysis using a website. They can learn what the clients want to get, their weakness, and strength. In the end, they can find solutions for the customers. Clients tend to learn more information about the products. That means they like to visit an online store to know more about items they want to buy.
Finding the Right Solution
Using online marketing places, sellers can’t provide as much information as buyers need. As a matter of fact, they can’t perform a business analysis. On the other hand, running a site allows them to find clients’ demands. This is quite helpful to discover brand solutions that are matched with their business objectives. It’s true that branding isn’t an easy task. It’s a long-term process, after all. The key is to provide a unique value to customers. Sellers can achieve this by building their online store instead of using marketplaces. How can they survive the competition?