Marketplace or your own shop

Posed as a strategic choice, this is mostly an arithmetic one with a sequencing answer. Marketplaces rent you demand; your own shop makes you find it. Which is right depends on what you are short of, and most people are short of demand first.

What you are really buying and paying

• On a marketplace you pay a commission on every sale, often with a listing or subscription fee on top, and the rate depends on the category. Check the current schedule for your own category rather than assuming a general figure.
• You get buyers who are already there and already intend to buy, which is the expensive half of ecommerce.
• You do not get the customer. Often not their email, usually not the right to market to them, and never the relationship.
• You compete on the same page as everyone else selling the same thing, which means you compete mainly on price and delivery speed.
• The platform can change the rules, the fees or your visibility, and has no obligation to warn you.

Your own shop inverts every line. No commission, full margin, you own the customer and the data, nobody can suspend you, and you have to produce every single visitor yourself, which is the part that defeats most new shops.

The comparison, worked

Illustrative. An item sells for 40 with 16 of contribution before acquisition. On a marketplace at a 15% commission you pay 6, leaving 10, with no acquisition cost and no work to get the visitor.

On your own shop you keep the 16, and you pay to be found. If advertising brings a buyer for 12, you keep 4, which is worse than the marketplace. At an acquisition cost of 6 you break even with it. Below that, your own shop wins.

So the honest version of the question is whether you can acquire customers for less than the commission. For most people starting, the answer in the first year is no, and that is the argument for starting where the buyers already are.

A sequence that works

1. 01Start where the demand is if you have no audience. Use the marketplace to find out whether the product sells at all, which is cheap research disguised as trading.
2. 02Run your own shop alongside from early, even quietly. It costs little and it is where the brand, the content and the email list accumulate.
3. 03Put something in every parcel that gives a reason to come to you directly next time. Not a discount necessarily: a guide, a registration, a refill, something useful.
4. 04Watch the ratio. When direct and search traffic start producing orders at an acquisition cost below the commission, shift the effort.
5. 05Never let the marketplace be your only channel. A suspension with no warning is a normal event, and a business with one channel has one point of failure.

The pure version of either strategy is the mistake. Marketplace only means building somebody else's asset. Own shop only, with no audience, means paying to learn what the marketplace would have told you in a fortnight.

Pricing across two channels

Selling in both places raises a question people answer by accident: the same product is now listed at two prices, or at one price with two very different margins, and customers can see both.

• Undercutting the marketplace from your own shop looks obvious and some marketplaces restrict it, so read the terms before building a strategy on it.
• Pricing identically means your own shop earns the commission as extra margin, which is the simplest arrangement and the easiest to explain to a customer who checks.
• Charging more on the marketplace to cover the commission is honest, visible, and makes you look expensive on the page where you are being compared directly.
• Differentiating the offer rather than the price is the way out: a bundle, a longer guarantee, a larger size or a refill available only direct. The headline product costs the same everywhere and the better deal is yours.

Whatever you choose, be able to say it in one sentence to a customer who asks why the prices differ. A shop that cannot explain its own pricing loses the argument regardless of the arithmetic behind it.

One further thing to watch: a marketplace listing can outrank your own product page in search for your own product name. That is worth checking, because if it happens you are paying commission on customers who were looking for you specifically.