Pros, Cons: Ecommerce Marketplaces vs. Creating Your Own Website

April 28, 2021
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4 minute read

There can be no doubt about it: e-commerce has truly taken off. With the arrival of the coronavirus,  some 36% of new digital service consumers in Southeast Asia started using these services only as a result of the measures that were imposed by governments due to the COVID-19 pandemic. This is according to the report e-Conomy SEA 2020—released by Google, Temasek, and Bain & Company—which also revealed that 40 million users in the region joined the internet in 2020, bringing the percentage of internet users in Southeast Asia up to 70% of the population.

There is no better time to get involved in online selling than right now, but this raises the question: how do I do it? Most people who sell online choose one, or both, of two possibilities: selling on one of the third-party ecommerce marketplaces or building your own ecommerce-enabled website. Each option has its own advantages and disadvantages, which we’ll discuss here.

Why You Should Sell on an Ecommerce Marketplace

Quicker Time to Market

The biggest advantage of choosing to build a digital storefront on an existing ecommerce platform is speed. You’ll very quickly be able to set up your store and get your product (or service) in front of potentially millions of waiting customers. If you build your digital storefront on Lazada, Shopee, or any of the online marketplaces out there, you’ll likely be done setting it up in a few hours, tops. Quicker time to market means quicker sales and quicker returns on your investment.

Reduced Capital Expenditure

Another attractive feature of selling on a preexisting platform is that most times, setting up a store doesn’t require a huge investment of capital. While some sites do charge on a per-transaction basis (more on this later), initial financing needed to start up the store is not necessary.

Drawbacks of Ecommerce Marketplaces

Fierce Competition

The convenience and ease you enjoy when setting up your shop is also available to everyone else interested in selling on the same platform, and many of them will inevitably sell products that are similar to yours. This means from the moment you begin operating, you’ll be competing with so many other sellers who had the same idea you did.

Building Brand Equity Will Be Challenging

The importance of this drawback depends on your personal goals and vision for your product. If you’re content with selling a few units to put a few more bucks in your bank account, this probably wouldn’t matter much to you, but for those looking to establish a true brand, with name and image recall that reaches the vast majority of the population, this could be a dealbreaker.

Most people shopping on an ecommerce site barely even notice the name of the store they buy from. Their main concern is that they get what they need, so most of the time, they don’t really care about who sells the items to them. If you’re not already an established brand that sells under the “mall” section of online marketplaces like Shopee and Lazada, it would likely take a long time for you to build a following comparable to those of well-known merchants. This will put a natural limit on how big your brand can grow and how much recognition you can generate for yourself, if at all. 

Buyer Data Is Owned by the Marketplace

Not only will it be challenging for you to build your brand if you rely solely on an online marketplace to sell your products, but you likely won’t be able to take full advantage of the customer data that is made available to you. This is because all purchase data is kept and owned, not by you, but by the platform that serves as your host. They’re the ones who benefit from knowing which products are most likely to sell, and they’re the ones who have access to customer contact information, not you. Consequently, marketing to people who have already bought your products and may want more of them will be difficult, and it will only be possible with the cooperation of your host.

Here’s Why You Should Build Your Own Website

It’s Great for Customization and Brand-Building

Having your own website means you have full control of the shopping process, with your own colors, logo, content, and user experience to. If done right, your website could be the start of turning your small online store into a nationally recognized brand.

All Revenue Goes to You

Many third-party ecommerce sites or marketplaces tack on checkout charges or other fees as a way to charge for the privilege of hosting your store. Naturally, these fees don’t exist if you own the entirety of the site.

You can even make transactions easier with some help from the products and services afforded by fintech solutions providers like Maya. We offer an easy-to-install payment gateway known as Maya Checkout, which is an all-in-one solution that instantly makes your website ready to accept payments from a variety of payment networks, including Visa, Mastercard, JCB, WeChat Pay, GrabPay, and GCash. There are also individual Maya Checkout plugins  that integrate with the most popular ecommerce platforms, including Shopify, Magento, WooCommerce. This allows visitors to pay with most widely accepted credit and debit cards, as well as some of the most popular e-wallet systems used in the Philippines today.

Drawbacks of Building Your Own Ecommerce Site

Requires Some Investment

Depending on the complexity of the site you intend to build, you’ll probably need to spend for the domain you want, hosting for the site itself, design for the look and flow of the site, and content to fill the site with. You’ll probably also need well-composed photos of your products, which may require some professional photography and styling as well. All of these items cost money, so a budget will be necessary, if you want your site built right.

Takes Time

Above all else, designing and launching a good website takes time. There are ways to speed up the process of developing, designing, coding, and writing the content for your site, but you can expect a timeline of at least a few months before you’re operational.

There’s no magic bullet that will make your online store an automatic success. To be able to make it in the world of ecommerce, you’ll need to consider your personal circumstances and choose which advantages are most important to you.