Why owning a store is better than selling on Amazon or eBay?

Research
 
19 January 2018 989

If you’re just starting with eCommerce, one of the biggest decisions to make is whether to create your own store on an eCommerce platform or to sell on the big marketplaces Amazon and eBay.

 

Yes, there are businesses that do both and some of them are successful, but I wouldn’t recommend it for one simple reason: it’s still hard to monitor your business performance on the various channels, gather all data in one place and use it profitably. 

 

That’s why we’ll focus on choosing one or the other.

Building your own stand-alone store may sound harder to do but it’s the same like building any business - if you do it from scratch, it’s your own and you have complete control. If you rely on somebody else, any change on their side might bring you down.

Control over brand

One thing anybody selling on a marketplace will tell you is that they have little control over branding options, positioning, content and so on.

 

The big players are just not interested in giving too many customization options because, after all, they don’t care who sells more as long as they get a percentage of the sales.

 

On Amazon, unless you’re a really big fish, you don’t even have a company page where you can show your brand values, vision and so on. All merchant pages look the same.

 

People are starting to prefer buying from companies with values (ethical supply chain, for example) so if you fit that, better be on your own and showcase your brand with tutorials, usage tips, content, partnerships, events and so on.

Owned customer support

Shopping assistance and post-purchase support can really set an online store apart. 

 

If you help people choose the best option, walk them through the process and make sure they use the product right, they're more likely to be satisfied and to buy again.

However, on the marketplaces, such communication before the purchase is impossible and is hindered post-purchase. Amazon lets you exchange emails with customers from its platform, not yours, and makes it too hard. 

 

In the 21st century live chat should be the norm, but you can only have it on your own store. 

Free to do promotions

People begin to notice that prices on Amazon/ eBay seem to be always crossed out as if there’s a sale. And soon that won’t be working any more.

 

The flexibility to do your own thing on your own site is awesome. You’re not blocked by marketplace rules and don’t have to stick to the limited tools for promotion they offer. 

 

For example, when cross-selling, you’ll offer your own products (of course!), not someone else’s (competitive) products from across the marketplace. You can even pick which products to cross-sell for the best customer experience.

Or, you can recover abandoned carts with promo codes. And do a “three for two” promo. You can’t even do email marketing to buyers outside Amazon to stimulate repeat orders. Yikes.

Exposure can be a bad thing

Unfortunately, there have been cases when the bigger player seizes an opportunity opened by entrepreneurs like you, goes to the manufacturer behind merchant’s back and seals a deal for a hot product on better terms (because of quantities). I don’t mean to make you paranoid, but it happens.

 

If they don’t see how well your products sell, they won’t go after you in the first place. 

 

Plus, there’s the thing with arbitrage, a scheme where people buy your products cheaply on Amazon and resell them profitably on eBay (or vice versa). Setting up your own site, supply chain and shipping will largely eliminate those scammers because it’d be too much work to do it. 

Keep your own data safe

This leads us to probably the most important reason to sell on your own site.  The marketplaces have access to your data and see your results. This gives them leverage to compete with you so if you rely heavily on their channel, you might be put out of business.

 

In comparison, for your own online store you can use third-party ecommerce analytics so you and only you have access to all data and insights.

Then, you’ll be able to use that data independently to drive more sales. Here are just a few examples, although there are many more ways:

 

  • Optimize your marketing channels for conversions
  • Do customer segmentations and tailored promotions
  • Work on customer retention with behavior-based email marketing
  • Optimize customer loyalty with loyalty-inspiring products
  • Make your own product bundles

More options for personalization

The marketplaces put merchants together in their email marketing and make you fight for sponsored listings. The most personalized offers are emails with products people have been looking at. Wow.

 

Having control over your data and marketing, on the other hand, means you can do different things for your different types of customers and get better results: 

 

  • Reach customers on their preferred channel, lead them to custom landing pages and tailor the discounts.
  • Do proper email marketing - upsells, reactivation, abandoned cart recovery, content, feedback and so on.
  • Do meaningful cross-sells of your own products, not someone else’s.
  • Retarget on FB based on people’s behavior.
  • And generally, use your data to market to your customers - something you’re not allowed to do as a merchant on a marketplace.

Local for the market

If your business operates on a smaller scale than the global marketplace, you won’t really earn much from being on there, right? If you only deliver locally, it’s not worth paying the fees and frustrating potential buyers.

 

But in some local markets, the big players are not too strong. Amazon Australia just launched last November! Countries in Eastern Europe often have to use an additional delivery service because Amazon UK largely doesn’t ship there.

 

This puts local companies in a favorable position. You can also open pop-up stores or showrooms, organize events, and talk to your customers in the same language.

In conclusion

Having your own online store is more work now but more profit for you later. Selling on marketplaces like Amazon and eBay is insecure and if they decide to change their policies, it can hurt you instantly. 

 

So to choose wisely and make it easier to launch, get a certified developer to build you a professional store on a platform that fits your business needs, spend a few bucks on qualified support to make sure everything runs smoothly all the time and start making yourself money.

Author:
Dimira Teneva

Dimira Teneva helps eCommerce entrepreneurs do better marketing and sell more. She is in charge of the blog of Metrilo, an eCommerce analytics, CRM and email platform in one.