February 4, 2016 
Sell Online 101 – Part One: Where should you sell online?
If you are a seller who is looking to expand the business by selling online, then this post is for you.
The Indian e-commerce market is set to grow by over 35%, up to an impressive $100 billion mark from $17 billion, over the next five years, according to a recent PwC study.
Given such impressive numbers, it is no wonder then that more and more sellers want to sell online.
Before you start selling online, however, let’s look at the following points of comparison to understand where to sell online – on your own website or on a marketplace.
Selling online vs Selling on marketplaces
Product category
The product category you intend to sell online in has a direct impact on your choice of channel. The branding of your product line, the competition in the product category and the congruence between your product line and the marketplace, are all factors you must consider.
For e.g., If you are a seller of affordable bridal lehengas, then to be consistent in your branding you should select a marketplace such as Craftsvilla.
However, in comparison, if you intend to sell exclusive, made-to-order designer bridal lehengas, which would need extensive brand building, then you would probably be better off setting up your own store.
Ease of doing business
There is no denying the customer reach that stalwarts like Amazon, Flipkart command in the market. Thus, the ease of entry into the market is high. In addition, selling on a respectable marketplace ensures trust and credibility and high amount of customer traffic.
Further, no time is expended in setting up the website. The seller simply needs to list his product and get access to a ready-made market.
By contrast, setting up your own website consists of selecting a domain name, a web host such as HostGator etc., shopping cart, as well as a payment gateway.
Some website builder service providers like Magento, MartJack etc., provide shopping carts, SSL certificates, and payment gateways as integrations installed with their basic offerings.
Even so, each of these decisions requires careful consideration depending on your store requirements.
Costs
Another important factor to be considered is the cost associated with listing on a marketplace. Selling on a marketplace has its own pitfalls.
If you are selling a product that is low on margins, then the marketplace route is probably not for you. For instance, Flipkart’s pricing page lists their pricing structure to show the following:
Marketplace Fees
- Shipping Fee – Fee charged for shipping costs accrued by the marketplace.
- Closing Fee – Fee charged per sale closed.
- Selling Commission – Fees charged on a percentage of the selling price of the product.
- Service Tax (as a percentage of the Marketplace fees)
In comparison, costs for setting up a web store vary greatly. For e.g., Shopify’s pricing page lists different plans, each with a set of features. Depending on the plan selected, the transaction fees will vary, as below:
- Lite – Mediums of sale are POS, Facebook, as well as Shopify, buy buttons.
- Basic – Mediums of sale include online stores, POS, Facebook and Shopify buttons.
- Pro – Includes all mediums in the basic version and additional features like fraud analysis,
gift cards, etc. - Unlimited – This plan is packed full of advanced features, such as real-time carrier shipping,
wherein the shipping costs are calculated automatically at the exact time that the order is placed.
When comparing the two, the upfront fees will be more in the case of Shopify, however, in the long run, due to its marketplace fees setup, Flipkart would end up being a more expensive option.
Thus, as a seller- you must think long and hard about the factors listed above. Only then can you decide as to whether selling on marketplaces is for you, or if you would be willing to take up the pains of selling online, via your own store.
Vin eRetail Express helps you sell across marketplaces, manage orders across multiple channels & fulfill with ease. All this with an intuitive Order management platform on the cloud.
Next in this series: Sell Online 101 – Part Two!
Any tips or questions for us? Leave them in the comments below.
