How to Transition from Marketplace to eCommerce
The advent of the Internet and digital technology has radically transformed the way people buy and sell products. The emergence of online stores and marketplaces has enabled greater accessibility, convenience, and globalization in commerce, changing market dynamics and providing new opportunities for both buyers and sellers.
Before the proliferation of online stores and marketplaces in the digital era, commercial transactions were primarily conducted in person, through physical channels and traditional methods.
Currently, shopping online has become a habit. As such, digital culture is something that every type of company, regardless of size, must adapt to in order to survive in the market.
Many businesses choose to sell through marketplaces, although they do not always achieve the expected results due to facing high commissions and fees, dependence on third-party rules, unfair competition, difficulties in building their brand, and limited visibility.
It is important for companies to carefully evaluate their sales strategy on a marketplace, considering the challenges and determining whether migrating to their own eCommerce platform could be beneficial for achieving their long-term business goals. The migration should be a strategic decision that aligns with the company's vision and values.
What is a Marketplace?
A marketplace, also known as an online market, is a type of digital platform that facilitates the buying and selling of products or services among multiple sellers and buyers.
The marketplace brings together many companies that may offer similar or different products, functioning like a virtual shopping mall that gathers various stores and brands in one space, some of which compete against each other and others that belong to different sectors but sell their products through this virtual platform.
Characteristics of a marketplace:
Variety of Sellers
Marketplaces typically host multiple independent sellers offering a wide range of products or services. This provides buyers with a diverse selection and the ability to compare different offerings.
Intermediary
The marketplace acts as an intermediary between buyers and sellers. It facilitates the transaction, provides a secure environment for operations, and in some cases, manages the payment process.
Centralized Platform
The platform itself is the central point where transactions are conducted. Users can access it to search for products, make purchases, and in some cases, leave reviews and ratings.
Payment and Transaction System
Marketplaces often manage the payment process, ensuring that transactions are secure and efficient. Some marketplaces also hold the payment until the product or service delivery is completed.
Evaluations and Reviews
Buyers usually have the opportunity to leave reviews and ratings for the products or services purchased. This helps build trust and provides information to other potential buyers.
Wide Audience
Marketplaces typically have an extensive audience, attracting buyers interested in a variety of products or services. This can be beneficial for both sellers and buyers as it increases the visibility and accessibility of products.
Business Models
Marketplaces can operate under different business models. Some earn revenue through transaction fees, subscription fees for sellers, advertising, or a combination of these methods.
Common examples of marketplaces include Amazon, eBay, Etsy, and Shein, each specializing in different types of products or services. Marketplaces have gained popularity due to their convenience and the ability to access a wide variety of options in one place.
What is an Online Store or eCommerce?
An online store or eCommerce is a website or online platform that allows users to purchase products or services over the internet. Companies manage their own website, each with its own sales operation, from purchase to delivery, and the negotiation is directly between the seller and the customer. There is a single owner of all the products sold on the eCommerce.
Characteristics of an online store:
Product Catalog:
An eCommerce features a catalog of products or services with details such as descriptions, images, prices, and specifications. Users can browse through different categories and select the products they wish to purchase.
Shopping Cart
Users can add products to a virtual shopping cart while browsing the store. The shopping cart allows buyers to review and adjust their selection before proceeding to payment.
Online Payment Process
Online stores facilitate the payment process through various options, such as credit cards, debit cards, bank transfers, and online payment methods like PayPal. Payment systems are usually secure to protect the user's financial information.
Security and Privacy
The security of transactions and the privacy of customer information are critical aspects. Online stores implement security measures, such as data encryption, to ensure that personal and financial information is protected.
Inventory Management
eCommerce typically have inventory management systems to keep stock updated and prevent the sale of out-of-stock products.
Shipping and Logistics
The online store handles the logistics and shipping of products. Some offer options for fast shipping, order tracking, and return policies.
Customer Service
They offer customer service to assist buyers with questions, issues, or inquiries related to their shopping experience.
Personalization and User Experience
Many online stores use personalization technologies to tailor the shopping experience according to the preferences and behaviors of the user.
Promotions and Discounts
Online stores often offer promotions, discounts, and loyalty programs to attract customers and encourage repeat purchases.
Some examples of popular eCommerce platforms include Shopify, WooCommerce, Magento, and BigCommerce. Online stores have experienced significant growth due to the convenience they offer to consumers and the expansion of eCommerce in the digital age.
Differences between eCommerce and Marketplace
eCommerce and marketplaces are online business models that involve buying and selling products or services, but there are differences between them.
eCommerce | Marketplace |
|---|---|
Single seller or brand | Multiple sellers or brands |
No competition | Greater competition |
All profits go to the business | Charges commissions on each sale |
Possibility of customization | Platform with standard design |
Both models have their advantages and challenges, and the choice between eCommerce and marketplace will depend on the specific goals and needs of each business.
Advantages of Migrating from a Marketplace to an eCommerce Platform
Migrating from a marketplace business model to an eCommerce platform can offer several advantages for sellers and entrepreneurs. Here are some of the most significant benefits:
Total Control Over the Brand: Owning your eCommerce platform allows for greater control over your brand's presentation. You can customize the appearance of the store, the user experience, and convey a consistent brand identity.
Decision-Making Independence: You can make strategic and operational decisions without depending on the policies and restrictions imposed by a marketplace. This includes pricing, inventory management, and implementing marketing strategies.
Direct Relationship with Customers: With your own eCommerce platform, you can establish a direct relationship with your customers. This enables more effective communication, feedback collection, and building customer loyalty.
Lower Fees and Commissions: By avoiding the fees and commissions associated with selling through a marketplace, you can increase your profit margins and have greater control over your revenue.
Flexibility in Payment Methods: Having your own eCommerce platform allows you to select and manage your payment methods. This offers flexibility to adapt to customer preferences and negotiate payment processing fees.
Greater Control Over User Experience: You can optimize the user experience based on your own criteria. This includes site design, navigation, return policies, and other aspects that influence customer satisfaction.
Personalization and Direct Marketing: eCommerce platforms offer broader options for personalizing the shopping experience and executing direct marketing strategies. Utilize tools such as email marketing, loyalty programs, and customized discounts.
Data Collection and Analytics: Operating your own eCommerce platform gives you direct access to detailed data and analytics on customer behavior. This facilitates informed decision-making and strategy optimization.
Scalability and Adaptability: An eCommerce platform allows you to scale your business more flexibly. You can add new product lines, expand into new markets, and adjust your business strategy as needed.
Diversification of Sales Channels: By having your own eCommerce platform, you can diversify your sales channels and not rely solely on a single marketplace. This reduces risk and increases business resilience.
It's important to note that while there are benefits to migrating to your own eCommerce platform, it also involves the responsibility of managing aspects such as site security, regulatory compliance, and traffic promotion. Careful planning and consideration of available resources are essential before making the transition.
Steps to Migrate from a Marketplace to an eCommerce Platform
When undergoing the migration process, there are many aspects you'll manage differently, and you need to consider factors you may not have analyzed before, such as design, organization, product presentation, payment processes, and establishing and optimizing information hierarchy. Here are the steps you can follow to make this transition:
Evaluate the Feasibility of the Change: Conducting a feasibility study involves simulating what you will encounter once the eCommerce is operational, based on competition analysis and the framework in which your products will compete. Make sure you fully understand the motivations behind this change.
Design a Migration Strategy: The migration strategy is very important. There are excellent eCommerce platform providers with experienced teams ready to offer advice on the migration process, who can help both in designing the strategy and carrying out the migration.
Choose the eCommerce Platform: Research and select an eCommerce platform that fits your needs. There are many options available, so ensure the platform is scalable and suits your business model.
Migrate Products and Relevant Data: Transfer all your products and inventory data to the new platform. Ensure that product information, images, and descriptions are complete and accurate.
Set Up the Online Store: After transferring the data, the next step is to configure your shipping and payment methods, customize your theme, and install any extensions you need. Don't forget to test your store before making it public to ensure it functions correctly.
Optimize for Search Engines (SEO): Ensure your new platform is optimized for search engines. This includes setting up relevant keywords, product descriptions, and user-friendly URLs.
Establish a Marketing and Promotion Strategy: The goal is to reach the audience you had in the marketplace, identify it, and direct it to your website. The strategy should encompass both Google navigation and social media to capture the audience at different conversion stages. Use multiple channels tailored to your customer profile, which could include a blog, social media, email marketing, among other strategies.
Inform Your Current Customers: Clearly communicate the change to your current customers. Provide them with information on how they can continue purchasing your products or services through the new platform.
Start Online Sales Operations: Once everything is planned and set up, it's time to inform your potential customers about your website and start selling your products. Advertisements should be published to attract as many customers as possible.
Offer Quality Customer Service: Ensure you have a solid customer support system. Respond quickly to inquiries and provide quality service to build trust in your new online store.
Monitor and Optimize Store Performance: Constantly monitor your eCommerce's performance. Analyze metrics such as conversion rate, website traffic, and customer feedback. Make adjustments as necessary to improve the user experience and increase conversions.
Maintain Fluid Communication with Customers: Implement a customer relationship management (CRM) system to efficiently track interactions and customer needs.
Remember, transitioning from a marketplace model to an eCommerce platform is a process that requires careful planning and execution. Consider working with professionals or consultants if necessary to ensure a successful transition.
Useful Tools for the Migration Process
Migrating from a marketplace business model to an eCommerce platform can be a complex process, but there are various tools and resources that can facilitate this transition.
Here are some useful tools to help you in the migration process:
eCommerce Platforms
Shopify, WooCommerce, Magento, BigCommerce, PrestaShop: These are some of the popular eCommerce platforms that allow you to create and manage online stores. Select the one that best suits your needs and preferences.
Data Migration Tools
Cart2Cart, LitExtension, FG Magento to WooCommerce Migrator: These tools facilitate the migration of data such as products, customers, and orders from one system to another. They help minimize the time and effort required in transferring information.
Payment Processors
Stripe, PayPal, Square: Choose a payment processor that integrates easily with your eCommerce platform. These tools provide secure and efficient options for managing online transactions.
Security Tools and SSL Certificates
Let's Encrypt, SSL.com, Sucuri: Ensure to implement an SSL certificate to secure transactions on your online store. Tools like Sucuri offer additional security services.
Analytics and Tracking Tools
Google Analytics, Hotjar, Crazy Egg: Use analytics tools to monitor traffic, understand user behavior, and make continuous improvements to your website's experience.
Inventory Management
TradeGecko, Skubana, Veeqo These tools assist in inventory management, stock tracking, and real-time data synchronization between your eCommerce platform and other sales channels.
Marketing Automation
Mailchimp, Klaviyo, HubSpot: Implement marketing automation tools to send emails, create promotional campaigns, and engage customers.
Customer Service Platforms
Zendesk, Freshdesk, Help Scout: Use customer service platforms to manage inquiries, provide support, and maintain effective communication with customers.
SEO Tools
Yoast SEO, SEMrush, Ahrefs: Optimize your online store for search engines using SEO tools that help improve your ranking and online visibility.
Backup and Restoration Tools
UpdraftPlus, BackupBuddy: Implement backup solutions to ensure your data is regularly backed up and can be restored in case of any issues.
Before proceeding with the migration, ensure to perform complete backups and test the new platform in a trial environment to avoid any service interruptions.
Migrating from a marketplace model to an eCommerce platform can be successful when executed strategically, paying attention to market needs, and providing additional value to customers and sellers. Each case is unique and requires careful planning to address specific challenges and capitalize on opportunities.
It's important to note that the choice between a marketplace and eCommerce depends on the specific goals and circumstances of each business. Some companies may benefit from the visibility and reach provided by a marketplace, while others may prefer the autonomy and control offered by owning an eCommerce platform.
