The Advantages and Disadvantages of Different eTailing Channels

The Advantages and Disadvantages of Different eTailing Channels

Online retailers, or eTailers, have many choices when it comes to selling their products online. In general, the choices come down to hosting your online store or selling your product using an online Marketplace. Many online sellers will choose a combination of the two to maximize their reach. However, each option has advantages and disadvantages, which we discuss below.

Selling through marketplaces

Marketplaces like Amazon,, and provide a fast and simple way to sell your product online. In fact, it is quite possible to set up your account and make your first sale within the first hour.

Marketplaces bring multiple vendors together to sell a variety of products. Buyers visit the marketplace and search for an item. If you happen to sell that item, you will be listed among the possible choices available to the buyer.

Marketplaces provide many resources that make it easy for you to get going quickly, such as product descriptions, credit card acceptance, warehouse space, and fulfillment options.

But while there is much to love about marketplaces, there are also some negatives.

First, you are competing with everyone else in the marketplace that sells the same or similar products as you do. The competition can be fierce, and without strong brand recognition, it can be difficult to compel buyers to purchase from you among all your competitors.

Second, many marketplaces restrict how you can represent your company or your products. Hosting your own eCommerce retail store allows you to exercise more originality and freedom in promoting yourself or your product.

Another downside is that marketplaces charge multiple transaction fees for their services. These fees can add up and make it hard to charge a competitive price for your products while remaining profitable. If you use their fulfillment services, there are additional fees.

For example, Fulfillment by Amazon (FBA) allows sellers to rent space in Amazon’s warehouses. Once an order comes in, Amazon will pick, pack, and ship the item for you in addition to collecting the money and sending the sales price minus any fees to your account. Using Amazon’s Fulfillment by Merchant (FBM) lets them handle the sale and notify you of the details so you can perform your own pick-pack-and-ship. Amazon will even allow you to sell on other websites and still ship your items for you.

Online vendors should read the fine print for any marketplace and understand how fees will impact your profitability.

Hosting your online store

Another alternative is to host your own web store. This way, you have creative control over the form of your eCommerce website and have no fear of fighting off competitors that list their products on the same website as you. Hosting your own web store comes in two basic flavors: You can host it yourself using a product like WooCommerce or Adobe Commerce (formerly Magento), or you can use a hosting platform like Shopify or BigCommerce to take care of things like product listings, product descriptions, shopping carts, credit card acceptance, and more.

One of the most significant downsides here is that while you have creative control over the look and feel of your site, you must build up support for your brand to drive traffic to your web store. To stand out, you must look at ways to build brand awareness, which can be expensive.

Another downside is that choosing a self-managed site like Adobe Commerce can be expensive and require more technical ability than you might have. In addition, commercial web stores like Adobe Commerce or hosting sites like Shopify charge subscription fees that add up.

Many hosting platforms will provide credit card gateways, and you must decide how to offer fulfillment services on your orders.

Mix ‘n Match

As previously stated, many online retailers choose a combination of solutions, selling their products on several marketplaces and social media outlets as well as having their own web store. This option provides the most coverage, but can add complexity.

Integrating with your ERP

Because the success of your business relies on accurate inventory counts, the ability to collect payment, and the ability to fulfill orders as they come in, tight integration with your company’s financial, warehouse, and inventory management systems is vital. This integration helps with sales forecasts, real-time inventory information, replenishment indicators, and customer tracking.

Find out more

If you are struggling to get your eCommerce efforts moving in the right direction, ask the experts at ArcherPoint.

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