E-commerce sites vs e-commerce platforms – which is better?
I get this question a lot. They are fundamentally the same thing – a sales distribution channel for your business. However, they provide different advantages that benefit businesses differently, based on objectives.
E-commerce sites are created and managed in-house, giving companies full control over the content and backend set up. Technical set up such as analytics, tracking, and SEO can be done easily. On the other hand, e-commerce platforms function like digital malls and companies are merely given a spot on the platform to display and sell products.
My personal strategy is always to start building in-house e-commerce sites. Since building a site takes time, establish alternative sales channels while waiting. This is a great strategy for start-ups and SMEs as it achieves short term (profit) and long term goals (branding).
Short-term E-commerce Sites Goal
It’s normal for businesses to want to be profitable in the shortest possible time. That’s how businesses survive. The fastest way to get sales is through e-commerce platforms. Being on these platforms means tapping into existing platform users and reaching out to potential customers who do not know your brand yet.
E-commerce platforms are also user-friendly, making them great choices for start-ups who lack the necessary expertise to set up e-commerce sites right away. Businesses can also get a better idea of how they’re faring since these platforms have tools for analytics and reporting.
Money Matters
The downside to engaging these platforms is the platform fees. Depending on the platform, the fees may be 3% or a fixed amount per transaction. Some platforms offer a fixed monthly recurring fee regardless of sales.
For businesses with small ticket items, you may find that the benefits of these platforms outweigh their costs. On the other hand, businesses with higher priced products may not see these platforms as a sustainable long term sales channel.
Moreover, these platforms attract users by employing loss leading strategies. This makes it difficult for brands to control their prices. In the world of business, the last thing you want to do is to compete on price.
Long-term E-commerce Sites Goal
With sales channels set up, it is time to look at long term development. This is important for businesses who are looking to stay permanently.
Setting up e-commerce sites usually involves higher upfront costs – financially and manpower. Ultimately, the benefits of having your own e-commerce sites will outweigh the costs in the long run.
In general, e-commerce platforms provide very limited branding solutions. It can be difficult for your store to stand out from competitors on the same platform.
Full Control
Having a site means you get full control over what content to publish and when to publish them. Launching a new product for Christmas? Create a stunning webpage just to feature your new launch. You can also set up a blog to share educational videos and write-ups specific to your brand.
The benefits of SEO has been mentioned countless times, but I have to bring it up again. Setting up SEO helps you create a stronger brand identity. While details such as product description and prices can be configured on the platforms, SEO is often limited.
With e-commerce sites, you can get creative with your website’s SEO and make it easier for your brand to be found through search portals. You can further enhance your marketing efforts by integrating tracking and web analytics with your site.
Ultimately, the strategy on which channel(s) to employ really depends on your business objectives. If your business model is focused on quick inventory turnover and costs are low for you, price sensitive e-commerce platforms work great.
On the other hand, if you are looking at long term business strategy, you’d want to build a brand name that is resilient and recognisable. In that case, you should be weighing the pros and cons of setting up a website (whether or not it supports an e-commerce function).
