Online Store vs. Marketplace: Which E-Commerce Strategy Suits You?

Many e-commerce businesses face the crucial online store vs. marketplace decision, which will shape their digital commerce approach. Particularly in the framework of cross-border trade in Europe, this choice is not only a technical one but also a basic one that can shape a company's direction.

What distinguishes having your own ecommerce from selling in a marketplace? You have arrived at the correct location if you wish to sell online but are unsure where.

Although both platforms and marketplaces provide distinct possibilities for expansion and income creation, selecting one over the other may significantly affect a company's strategy, user interactions, and long-term performance.

Choosing between the two in an online shop vs. marketplace scenario, though, is not a clear-cut choice. Each approach has its own benefits and drawbacks. Choosing the correct route depends on knowledge of these variances. It's also about comprehensively knowing your company's expectations and capabilities as well as your users' needs, and matching this knowledge with the infrastructure that most fits your company.

Main features of an Online Store

A web shop-also called an online store-is a point of sale entirely owned by the company owner-that is, you. Basically, an online store is a regular website with a product inventory and direct buying capability. You sell your products directly to customers, almost as though they were coming into your store. Only digitally.

Advantages of an Online Store

Knowing the benefits and drawbacks of both channels will enable you to decide between online stores and marketplaces only. Thus, we will underline the advantages and disadvantages of online retailers below.

• Create and keep complete control of your brand: Running your own e-commerce site gives you complete control over its appearance, content, and functionality. It doesn't have to be dull or generic. This is your opportunity to let the world see the personality of your brand. Very few rules, cookie-cutter policies, and character limits exist. You get to design the buying experience your consumers would like. Many online stores provide design flexibility, pre-built template selection, and system integration with other entities.
• You can retarget customers to turn into repeat purchases: Managing your own store and website gives you direct access to your consumers, which is one of its biggest benefits. This allows more upsell opportunities in the end and improved customer service. You can stay in touch going forward, advertise to those who have already bought from you, and target visitors to your website with ads. Building an email list lets you raise awareness, generate consistent income, and run promotions to clear stock.
• You make the rules: This is among the key distinctions between a marketplace and an e-commerce. In your own store, you have complete control; in a marketplace, you must follow the platform's rules. That way, you can select the design you like, generate the product data sheets any way you choose, and improve SEO.
• Your customers are yours: A consumer purchases something from Amazon; they are Amazon's customer, even if a third party sells the item. Your own ecommerce gives you ownership of the consumers. Building a database will help you to create more future sales.
• You strengthen your brand: Though the seller's name shows up in a market, most people overlook this. Your company name sticks with the consumer in your own online store; if the purchase experience is good, they will almost probably return to seek for other items in the future.
• You have no competition: Whether on Amazon or other marketplaces, you are up against many other merchants, frequently offering the same goods as you. Your own ecommerce is the only choice accessible; yet, nothing prevents the consumer from departing your store and searching for another one they prefer more.
• Lower commission fees per product: Of course, running an online store also comes with costs. For example, Shopify's basic monthly plan currently costs €27. Added to that are transaction fees for payment methods, which can range from 1.4 % to 2.99 %, plus a maximum of €0.35 per product sold. Overall, these ongoing costs are still significantly lower than the fees marketplaces charge their merchants. So, in the end, you'll be left with more profit.
• Technical independence: One thing to note: Even with your own online shop, you still need to put a certain amount of trust in the system. Hosting, updates, and backups are out of your hands with a cloud-based system like Shopify—which, by the way, saves you time and money! At the same time, however, you're also protected from algorithm changes because, of course, these don't happen on your own sales channel. In addition, your Shopify store is fail-safe, and your customers can access it 24/7, no matter how many people visit you at once.
• Your prices and promotions: You also have free rein when it comes to pricing. You can offer deals and discounts at any time of day or night and adjust your prices as often or as infrequently as you see fit. The key advantage is that your competitors are no longer breathing down your neck, making price wars much more relaxed than if customers were to search for all the products from different providers side by side.

Disadvantages of having your own online shop

1. Rebuild reach

Unlike marketplaces that already have many thousands of monthly visitors, with a store you are starting from scratch. Promoting your website will help you to actively bring people there. Though it may be challenging initially, this will also help you to gain devoted consumers who will buy from you repeatedly.

2. Setup time until launch

Setting up an online store from scratch involves a lot of work—even though platforms like Shopify have significantly shortened and simplified this process. You'll need to factor in considerable time and effort to add all images and product descriptions, and crucially, to prepare all necessary legal documents. This includes a site notice or “Impressum” (a mandatory legal disclosure for businesses in Germany, reflecting the “Impressumspflicht”), comprehensive terms and conditions, and a detailed privacy policy. Furthermore, for businesses operating in or selling to customers in Europe, ensuring strict adherence to data protection regulations like the GDPR (General Data Protection Regulation, known as DSGVO in Germany) is paramount. This adds to the initial setup complexity and ongoing operational responsibilities, especially since you directly own and manage sensitive customer data. Finally, you'll also need to select the right corporate design, themes, and apps.

3. No trust

As a retailer on a well-known marketplace, you automatically benefit from the positive image and trust of buyers. This isn't the case with a newly created online store. Here, you have to build trust from the ground up to convince potential customers. Rating systems, good customer support, a transparent approach, and a look behind the scenes, for example, through social media or company videos, can help.

4. Catering to local payment preferences

While you have full control, you're also solely responsible for researching and integrating payment methods preferred by your specific target audience. This can be more complex than relying on a marketplace's pre-configured options. For instance, to succeed in the German market, offering popular options like PayPal, Sofortüberweisung (often known as Sofort or Sofort Banking), Giropay, and “Kauf auf Rechnung” (purchase on account) is crucial and requires dedicated technical setup and potentially separate agreements with payment providers.

Online Store Examples

Online stores are brand-owned websites where companies sell directly to their customers-think Nike’s official e-commerce site (Nike.com), direct-to-consumer labels like Glossier or Warby Parker, and niche Shopify boutiques such as Beardbrand. Even traditional retailers maintain their own online stores-Sephora.com and BestBuy.ca let you shop their curated product lines with full control over pricing, promotions, and loyalty rewards. Unlike marketplaces, these standalone stores manage everything from site design and checkout flow to inventory and post-purchase support, ensuring a seamless, on-brand shopping experience.

Main features of a Marketplace

Several characteristics influence how buyers and sellers interact on marketplaces:

• Many different sorts of buyers and sellers

This underlines the diversity that characterizes a market. Unlike a traditional online store, where goods or services are sold by one provider, a marketplace is a digital meeting place for many independent sellers and buyers. This diversity offers a wide range of products and services since it allows consumers to select and compare based on factors including price, quality, and seller reviews.

• Confidence and Openness

Usually, markets provide means that ensure transparency and trust between buyers and sellers. Among other things, these include seller rating and review systems, clear and comprehensive product information, and safe transaction practices.

• Mediation and Regulation

The marketplace operator runs the platform, guarantees the correct transaction processing, settles conflicts between buyers and sellers, oversees payments, and usually collects a sales commission in return for these services.

• Ease of use and accessibility

Modern technology has made online stores mostly accessible and user-friendly. While sellers reach a bigger consumer base than in a conventional store, buyers can browse and buy products from several sellers in one location.

• Data-driven insights

Online marketplaces can gather enormous amounts of data on consumer behavior, therefore enabling sellers to gain useful insights and analysis that could enable them to maximize their offers and strengthen their sales tactics.

Every one of these elements helps to make a marketplace more efficient and appealing, therefore underlining its relevance in the contemporary retail scene.

Advantages of a marketplace

• You can start selling immediately: Another significant difference between operating your own e-commerce and selling on marketplaces. If you want to start selling quickly, a marketplace is a really great choice. Obviously, you must create your seller account and sync your products; still, markets are much more immediate than creating your own e-commerce.
• Access to a large, existing customer base: Think of a marketplace as a traditional retail hub. They put the system in place, provide you a space for your store, and manage marketing campaigns to attract customers. Online markets run on their brand; they control Google placement, they run sponsored campaigns... Your store's traffic is therefore guaranteed, which implies you won't have to waste money on marketing activities.
• Selling abroad is simpler: Many markets let you sell in many other countries; eBay, for example, is accessible in more than a dozen European countries. Selling in a marketplace lets you internationalize your sales more easily than operating your own e-commerce, since you are using this platform's cross-border strategy.
• Reach-wise, the present audience is already there: Usually, markets have been around for a long time and offer many products from various stores. Over time, this has ensured that the target audience knows the name of a marketplace, trusts the platform, and therefore visits there frequently. The platform's good reputation as well as its present reach could help you.
• Choosing payment methods: Marketplaces know their consumers and hence typically provide all locally pertinent payment methods, including PayPal, bank transfer, credit card, or purchase on account. From the beginning, sellers on these platforms can provide possible consumers a range of choices, which could result in fewer abandoned carts.
• Amazon has pioneered quicker deliveries; many other stores are following suit by providing fulfillment choices. This lets stores, naturally, for more money, keep their products right with the seller and have them sent from there. For consumers, this turns their fast arrival of products into reality, therefore lowering wait times and the associated annoyance.

Disadvantages of a marketplace

• You must follow the marketplace guidelines: Naturally, markets have their own criteria. For instance, product data sheets will require you to adhere to specific rules and limit your creativity compared to your own online store.
• The cost of the marketplace: eBay, Amazon, and others don't provide their platforms out of pure generosity; they obviously want to profit from them. As a result, extra sales taxes per item and monthly costs are rather typical. Sometimes, you might owe the seller as much as 15 % of your sales. These expenses greatly lower earnings and could seriously affect a company's financial standing.
• Your margin is less: Marketplaces typically bill a monthly fee and a commission per sale, so your ultimate margin is lower even if you save on marketing and other costs.
• Greater rivalry: Standing out is more difficult in a market where you share space with many other vendors. Certainly, not the only factor is price. Among other things, you should maximize your product data sheets and make sure you have positive evaluations.
• No brand and brand loyalty. On sites like Amazon, you are one of many merchants and probably have a product that can be located in a comparable format somewhere else. Therefore, price and reviews will be the main focus of searchers; the brand usually comes second. Put differently, customers might not even know you are around. Online marketplaces offer few branding and design choices, which lowers the probability that consumers will recall your brand the next time. Building a community that is loyal to your brand and will shop with you often becomes much more challenging as a result.
• Wage wars on prices. Do you know the Buy Box concept? Amazon became large; now many other sites are using it. The one that best shows the product wins the Buy Box, i.e., the link in the "Buy Now" button, if many sellers provide the very same product. Price is among the most crucial elements here. The product offered at the lowest price is the most likely to be emphasized, since a marketplace operates in the interests of the buyer. This implies for you that you must constantly change your pricing and undercut rivals. Sales loss is thus practically unavoidable. The battle for the Buy Box will be irrelevant only if your product is unique and made by you, or if it is offered in an individual bundle; the price comparison with like items still exists.

Online Marketplace Examples

Online marketplaces bring together several third-party sellers into one digital hub-think global giants like Amazon Marketplace, where millions of independent vendors list alongside Amazon's own inventory, and eBay, which combines auction-style listings with fixed-price "Buy It Now" options. Significant European players include Germany's Otto.de, which also hosts numerous third-party sellers, and the broad-category marketplace Kaufland.de. Etsy continues to be the go-to for handmade, vintage, and craft supplies from small artisans; Walmart Marketplace (primarily in the U.S.) gives approved sellers access to its large customer base; and niche platforms like Newegg (electronics) or Reverb (musical instruments) focus on specific interests. Letting sellers reach a large audience without creating their own store, these marketplaces manage everything from payment processing and shipping integrations to buyer protection and reviews.

What is the difference between a marketplace and an online shop?

The appeal of online marketplaces is immediately apparent to buyers and customers: if they are well organized, even very similar offers from different retailers can be found side by side in a direct and comparable manner. This allows buyers to search for specific products and compare offers directly without extensive research.

Of course, a provider's individual online shop usually doesn't offer such comparison options; as a customer, I might only turn to them if, for example, I've already had positive experiences with the specific retailer or if they were recommended to me as particularly trustworthy or competent.

These are crucial aspects for you as a retailer to evaluate when navigating the online shop vs marketplace considerations for offering your goods.

Here’s a detailed comparison of an online shop versus an online marketplace:

Both online shops and online marketplaces offer specific advantages and disadvantages for you as a retailer, which you should be aware of. When deciding which option(s) to choose as a company, you should keep these aspects in mind.

What do you choose: your own online store or a marketplace?

When approaching the online store vs. marketplace consideration, it's clear that each model offers specific advantages and disadvantages, which may be more or less important depending on your current business situation.

Observing the risks of marketplace sales clearly shows that it will be difficult for you to build a successful brand in the long term, as you are in direct competition—even more so than in e-commerce—and are also heavily dependent on the platform's goodwill. However, online marketplaces can certainly make sense as an additional sales channel.

An online marketplace generally offers an easier entry into the respective market segment, while the investments and effort, the pure resource consumption when starting your own shop, are initially significantly higher.

Eventually, however, costs can quickly converge, as the fees for sales on a marketplace could significantly reduce the profit margin for individual products—not least if there is little room for maneuver for pricing in direct competition.

Do you want to have e-commerce and marketplaces at the same time? This is one of the most common decisions: a multichannel or omnichannel strategy that combines both your own sales channels and third-party platforms.

For instance, you might use your e-commerce site for selling exclusive or premium products and use marketplaces to clear inventory or reach new buyers. This combination allows you to tap into the global reach of marketplaces while still maintaining control over your core business.

FAQ

Which platform is used the most for sales?

By far, Amazon commands the largest share of e-commerce sales globally. For instance, its marketplace in Germany generated 14,660.1 million euros in 2023 (Statista, 2023), significantly outpacing other retailers in that market. While Shopify powers more individual online stores (over four million merchants worldwide), Amazon’s sheer customer base, fulfillment network, and product assortment drive the highest sales volume year after year.

Is Facebook Marketplace an e-commerce platform or a marketplace?

Facebook Marketplace functions purely as a peer-to-peer online marketplace rather than a full-featured e-commerce platform; it connects individual buyers and sellers within the Facebook ecosystem but doesn’t offer merchant storefronts, branded checkout flows, or integrated payment gateways in the way specialized platforms like Shopify or BigCommerce do.

Why should retailers use an online marketplace?

Retailers benefit from online marketplaces by tapping into an existing audience of millions, leveraging built-in trust signals (like buyer protection and reviews), and offloading much of the technical and logistical burden—everything from payment processing to shipping integrations—allowing them to focus on product selection and customer service rather than building and marketing their own site from scratch.

Would it be possible to use both an online store and a marketplace simultaneously?

Absolutely! Many brands embrace an omnichannel strategy, running their own online store for full control over branding and customer data while listing select products on marketplaces like Amazon or Etsy to broaden reach, test new markets, and capture impulse buyers without sacrificing the benefits of their own branded experience.

How secure are online marketplaces compared to their own stores?

Online marketplaces typically maintain rigorous, enterprise-level security protocols (PCI compliance, fraud detection, data encryption) and assume most of the liability for transactions, whereas independent stores must invest in their own hosting security, SSL certificates, and payment-gateway compliance. This way, marketplaces can offer a more turnkey, highly secure environment, though at the cost of limited data access for the seller.

Which marketplaces are best suited for international trade?

Global giants like Amazon, eBay, and Alibaba/AliExpress top the list for cross-border sales thanks to their established logistics networks, multi-currency checkouts, and localized storefronts; niche platforms such as Etsy (handmade goods) and Newegg (electronics) also support international shipping but are more specialized in product categories.