MARKETING // EDUCATION // LIFESTYLE // BUSINESS // DESIGN
Online Store vs. Virtual Marketplace — Which is Better?Anyone wishing to get into e-commerce inevitably finds themselves confronted with a question: Which sales platform should I pick to distribute my products or services? There are quite a few virtual marketplaces on the Internet (e.g., Amazon or eBay & Co.,) where manufacturers can sell their goods to consumers quickly and easily. And that brings us to the next question: Is an online shop worth all the effort? A reasonable thing to ask, and we would like to answer it in our article. But before we do, we want you to know one thing: you have a good chance of succeeding in online retail, so we strongly advise you to give it a shot! In the field of e-commerce, a virtual marketplace can be compared with a classic real-life market. Basically, that is a place where completely identical, as well as absolutely different products from various manufacturers, are available to customers. Buyers have the opportunity to browse and compare merchandise without having to leave their physical location. An online store, on the other hand, is a place where products are targeted, promoted, and sold by a single merchant. Possible BarriersEstablishing an online shop requires one to have some technical skills and financial support. Particular emphasis should be placed on usability and high-quality search engine optimization — after all, a successful future needs a solid foundation. You also need to promote your online store in the best possible way so potential customers can find it easily in the vastness of the Internet. Therefore, we recommend you investigate different platforms and the ways they operate in. Other essential success factors include:
One last important point to keep in mind: take your time. Getting an online shop up and managing it is a long-run process, so you shouldn’t count on a quick profit. However, if you choose the right platform, your chances of good sales can increase dramatically from the first day. Meeting RequirementsMeeting the free delivery requirement requires online retailers to invest a lot of time and money. Those who fail to comply are given a warning and, in the worst-case scenario, threatened with permanent suspension. Of course, you get to enjoy some flexibility, too. For example, you can come up with your own delivery terms as per your personal specifications and wishes (as far as the law permits) and, most importantly, according to your available resources. That’s definitely a significant advantage. Brand AwarenessOwners of online shops can improve them technically and visually by themselves or have the necessary changes implemented by a corresponding service provider. Why would they do that? Mostly because any manager needs to project the desired brand image to their target groups. The range of options is quite extensive — from two-for-one promotions to demo versions and leaflets. With every package sent, the manufacturer is free to create original marketing campaigns according to their vision and chances of success. With marketplaces, things are different. There is a uniform shop design all retailers are to comply with. Most platforms don't provide users with an option to present their product or brand differently or create personalized marketing campaigns. Thus, discount advertising frequently remains the only way for them to create awareness of their products and services. One of the world's most famous marketplaces, eBay, is trying to break the status quo by offering special templates which can emphasize the individuality to manufacturers. However, the possibilities are limited, and the use of proprietary templates on marketplaces remains a rarity. ProfitDespite its high entertainment value, ABBA's "Money, Money, Money" song represents a merciless reality — profit is almost the only thing that counts when it comes to ensuring a company’s successful operation. Otherwise, it's only a matter of time before an enterprising entity files for bankruptcy. Marketplaces offer a lot of convenience and security, but they achieve it by charging online retailers high fees. Basically, owners of major platforms make manufacturers totally dependant on them. For example, Amazon requires a percentage of a successful sale (7 to 20%), depending on the product. Besides, you’re required to pay a monthly fee of around €40. Alternatively, you can pay €0.99 for each item sold, but this approach has some doubtful benefits (as of 2017). Online shops charge no fees because they are the manufacturers' property. The only drawback is that the manufacturer has to pay for incalculable technical failures. CompetitorsUsually, marketplaces offer a large number of similar or partly identical products. They’re filtered according to the best price or offer, and the dealer cannot affect it in any way. If your goods or services aren't the cheapest or "best" ones on the platform (according to its criteria), they end up on the last pages of the search results. That, in turn, means that potential customers will have a hard time finding your items. The fight for traffic is also a severe problem for virtual marketplaces. Now, various companies deal exclusively with the Marketplace SEO issue. Since many manufacturers want to keep their virtual market conditions attractive and competitive, they sometimes have no other way but to sell their products at a low price. Of course, online shops are also subject to competition. There is no just-a-click-away comparison of products from different providers, so the price at marketplaces like Rakuten and AllYouNeed is the only way to stay competitive. In the case of online marketing, there are other important considerations to keep in minds:
The price is, therefore, not the only pivotal element of a successful online shop. ConclusionSo, which of the two variants should you pick? It's impossible to provide the right answer because both platforms have their advantages and disadvantages. Generalization would also be inappropriate in this case. Nevertheless, we recommend that you use a rule of thumb: entrepreneurs with insufficient start-up capital and few marketing skills should go with major marketplaces and profit from the advantages they offer. Our suggestion for experienced companies would be to rely on both! It is the only way to generate significant sales and benefit from all the advantages of their line of business.
7 Comments
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