You know the saying: “Life happens when you’re making other plans.” Well that’s how I feel about businesses online. While many retailers, wholesalers, distributors, and basically any type of online merchant contemplate whether or not to pay attention to or even build out their website, something has been evolving and crystallizing over the past 5 years. The dominance of the online marketplace.
Wikipedia explains “An online marketplace (or online e-commerce marketplace) is a type of e-commerce site where product or service information is provided by multiple third parties, whereas transactions are processed by the marketplace operator. Online marketplaces are the primary type of multichannel e-commerce and can be described as a “simple and convenient portal” to streamline the production process.”
Amazon of course is the USA’s biggest marketplace in terms of sheer numbers. 2.6 Billion visits a month. Ebay has recently altered their business model towards representing themselves as a marketplace. Walmart.com, Sears, Jet, and Newegg are other marketplaces have committed to this business model.
So if I were starting an e-commerce business today or even if I was in the e-commerce business today, I would question the investment it would take to build and market a full e-commerce website.
How many ad dollars, Google Adwords clicks, how much patience and money to make my SEO work and how much faith do I have in social media to attract visitors to my site and then hope they buy?
What if I focused on the marketplaces where I have a built in audience, built in traffic, and where people are actively searching for products to buy?
I don’t need to be casting a wide web, so to speak, at least initially, I could be attracting buyers to my products through their search habits on existing marketplaces.
So do you need an e-commerce website? I would ask myself questions such as:
- How important is branding?
- Do I have deep enough pockets?
- Do I have a way to attract traffic to my site that is cost effective?
- Will my site provide me the real estate to get my message across in a way that a marketplace can’t?
To answer the question, I would always recommend at least having a one-page website that represents your brand… but development of a simple site is different than developing a full e-commerce website.
Marketplaces can be tough when it comes to keeping up MAP pricing and the fees can be high and you are beholden to the whims of the marketplace, so it’s not a panacea.
But it is a place of opportunity with tremendous upside.