Which should you sell on? Your own E-commerce website or online marketplaces in Canada

The internet is littered with opportunities for those looking to make money online. If you want a solitary income or just some fast cash, the internet helps you supplement it. One of the best ways people like to earn money is through selling their products on the internet.

Whether they open their own e-store or sell them at online marketplaces, both the options look fruitful. But which out of the two is more beneficial for a person living in Canada?

The first thing that comes to mind for people who want to make money online is to create their own ecommerce website. Others believe that selling products on an online marketplace is ideal to receive faster income.

On your very own E-store, you are responsible and in control of almost everything. You can expose customers to a wide range of products on your online store and attract their attention through various means of marketing. However, these e-commerce websites are expensive and hard to maintain.

The online marketplace is a ready-made platform where all you have to do is list down your products for the customers. However, you don’t have control over the inventory and have to follow various rules to communicate with customers.

With both the options having their own advantages and disadvantages, many people find themselves unclear and indecisive while choosing between them. This article attempts to explain the difference between these two online businesses which may help you decide which option is suitable for you.

What Is An E-Commerce Website

In your own Ecommerce website, you are responsible for adding products, receiving payments, and offering shipping in your own territory. This e-store will help you establish a brand for yourself and prosper your business further.

Building your very own E-Commerce website is an exciting venture. You are in control of the design, the products you sell as well as the ways you market them. Your brand name can get immensely popular if you invest the right time, money, hard work, and patience into it.

A look at this report by Canada Post regarding 2020 E-Commerce online shopping shows several key features leaning positively towards online shopping in the country. One highlight from the report suggests that Canadian shoppers prefer to buy from their local Canadian retailers. This means there are high chances of your locally produced goods and products getting sold sooner than others.

All of these factors indicate that opening your own e-commerce website in Canada may prove to be successful.

How To Start Your Own E-Commerce website in Canada

Before we get to the basics of creating an e-commerce website, it is important to know the costs that will take to start your business.

In Canada, small online businesses can cost under $1000; an average Canadian businessman owner spends anything between $5000 to $10,000 initially.

To open a small e-commerce store, the website cost design ranges from $1000 to $5000. Aside from, this, you will have to pay separately for a domain name, recurring updating costs, plugins for processing payments, and monthly hosting costs.

A large e-commerce store will cost you anything between $5000 to $50,000+ with 700+ extra costs.

How to build your own e-commerce website store in Canada:

  1. Find your niche, research the trends and decide on the products you would like to sell.
  2. Purchase a domain name for your e-commerce website. The best sites to purchase domain names in Canada are :
  • Shopify – One of the best and highly recommended E-Commerce platforms.
  • Wix –  A good website builder.
  • WooComerece – Ideal for WordPress.
  • BigCommerce- offers great services.
  • Squarespace – Simple and easy-to-use platform.
  • Volusion – Amazing at managing large inventories.
  1. Find a web developer that will help you launch your site in a professional manner in a short span of time.
  2. Gather all the documents you will need for a legitimate business. This official information by the Canadian government helps you register your business with the government and provides several vital details.
  3. Select a website hosting platform such as Shopify, WooCommerce, and BigCommerce to start integrating plugins, payment processes, etc.
  4. Choose your payment gateway. If your target audience is Canadian, then popular payment gateways such as Square, Stripe, Moneris, PayPal, and Elavon are used widely in Canada.

Once you have installed your payment gateway, you have all the basic components needed to start your E-commerce website.

However, one has to be realistic and take a look at both sides of the coin. Just like any other business, opening up an e-store may have its own advantages and disadvantages.

Pros Of Opening Your E-Commerce Website In Canada

1. Less Time Consuming

With just a few clicks, you can open up your own E-commerce website without wasting too much of your time. A basic online e-store can be made in a few minutes by using the ready-made templates provided by websites such as Shopify and BigCommerce.

These websites help maintain as well as host the platform without the retailer worrying about it. Once the website has been created, these websites also offer creative and attractive ways retailers can design their websites. A realistic and trustworthy e-store can be designed with minimal effort.

2. In Control Of The Website

Unlike an online marketplace, you can design your own brand without any rules and restrictions. You also have full control over how you would like your brand to be displayed and make changes whenever required.

A  look at the local Canadian websites, Little Chief and Co. (pet store) and Pleatea (tea store), will let you have an idea about how you can make your brand unique and stand out from other brands. Most importantly, instead of using an online marketplace logo, you design and create your very own brand logo.

 3. Offer Customization To Customers

You can be more flexible in offering modifications and customizations to customers than in an online marketplace. This means if a customer needs some changes in a product they bought from you, you can easily comply with their requests.

This will further boost your customer service and brand reputation positively.

4. Categorization Of Products

The more your website has categories such as ‘What’s trending’ and ‘Bestsellers’, the more people will have options to choose from your products.

The reason why you would want to show-off your best-selling products is to build trust with customers. When they find out that other customers purchased the specific product and liked it, they may also be motivated to buy it.

You can market these products by email marketing, displaying unique photographs, and include a perfect product description for customers.

Cons Of Opening Your E-Commerce Website In Canada

1. Site Crash

If your site crashes, customers won’t be able to buy or even look at your products. This may also lead to annoyance which may be faced by customers if this problem becomes recurring.

To run your own ecommerce website, it is important to ensure that your website is hosted on the right platform.

2. Highly Competitive

The world of e-commerce websites is a highly competitive one. Battling for customers and the best niches results in pretty expensive ventures. The ads become more pricey if the niche has become competitive online.

You need to search for different marketing strategies in contrast to your competitors to make your website successful.

3. No Try And Buy

Unlike traditional physical shops, e-commerce websites cannot offer the option of trying and buying for the customer. More often, the customer would prefer trying on a product and then deciding on purchasing it.

However, with augmented reality (AR), online stores provide options for people to try on products online. Although AR is very popular and useful for e-stores, it is a pretty expensive feature that may cost more than $5000. It can mostly be afforded by million-dollar online marketplaces.

4.  Shipping Duration

Once the customer orders products, they expect them to be shipped right away. If they don’t receive it on time or find out that their order is delayed, it will leave a negative impact on your store.

With your own online e-commerce website, you need to make sure that your shipping service is top-notch. You will also need to be transparent with the shipping rules and lay them out clearly for the customers.

Now that you have become aware of how a personal E-commerce website works, let us take a look at the world of online marketplaces.

What Are Online Marketplaces

To put it simply, an online marketplace is an e-commerce or an online site where sellers and buyers meet one another. Just like a physical store, an online marketplace brings buyers and sellers together and establishes a business. This electronic marketplace has a website owner that manages all the transactions on the website.

According to a study by Canada Post,  merchants selling on online marketplaces can increase their revenue up to 120 percent. They also see a rise in generating more sales through online marketplaces.

How To Find The Best Online Marketplaces For Business In Canada

First, you will need to understand that every marketplace has its unique rules and regulation You need to research thoroughly and equip yourself with business strategies to select the right online marketplace and start your business. Here are some basic steps to follow while selecting an online marketplace for a profitable business:

  1. Focus on the geography of your location and pick the online marketplaces having a large presence. If you are planning to sell your products in only Canada, look for online market places that are popular in the country.
  2. Select products that are popular among shoppers in Canada. Research product categories that shoppers are looking for on various online marketplaces. For example, these statistics suggest that clothing apparel was brought more than any other products by shoppers in the year 2019.
  3. Look for integration and select one that is native to your E-commerce platform. Shopify can be integrated with more than 140 marketplaces directly, including, eBay, Amazon, and Etsy.
  4. After selecting an online marketplace, take a look at its commission and fee structure.

Best Online Marketplaces To Sell Your Products In Canada In 2021

1. Amazon Canada

Amazon Canada’s estimated monthly traffic is about 135.5 million visits. On top of that, Amazon Canada also has a number of product categories that cater to different customers and their preferences.

2. Walmart Canada

Walmart is the world’s largest retail corporation and has a diversified range of products from food to electronics and even home equipment.

3. eBay Canada

eBay is an online e-commerce website that allows people to sell their products directly through its online auction platform. eBay has estimated monthly traffic of 30.5 million visits where customers look for home appliances to industrial products and even toys for kids.

4. Canadian Tire

Canadian tire is a company that owns chains of retail stores. They specialize in sports apparel,  sporting goods, sportswear, and many more. They also sell a wide range of hardware, automotive leisure, sports, home, and food products.

5. Best Buy Canada

Best Buy is a leading retailer in consumer electronics. It is one of the best places for Canadian digital customers dealing with electronics and home appliances.

Online Marketplace has a large scope in Canada but it does come with its own benefits and limitations.

Pros of Online Marketplaces

1.  An Established Market

The online marketplace is an already established market, complete with customer traffic. Thus there is no need for you to create demand and work on your marketing strategies like that on your own e-commerce website.

You can take advantage of the large customer base the online marketplace offers and sell your products accordingly.

2. No Website Building

While your personal e-store wants you to build a website, purchase a domain and incur monthly costs, online marketplaces have everything set up for you.

All it requires is for you to sign up in the marketplace you have chosen and list down your products. As the orders for your products come in, the online marketplace will have an order management system to help you handle them.

As these online marketplaces heavily invest in marketing campaigns, you don’t have to spend your money on it as well.

3. No Money Spent On Website Maintenance

When creating your e-commerce websites, monthly costs, purchasing a web designer and updates will have you spending a lot of money from your pocket.

In an online marketplace, you don’t have to spend money on websites as it will be taken care of by the online marketplace itself, saving you a lot of money.

4. Promotional Campaigns

When an online market runs a promotional campaign, chances are that your product might be featured in the campaigns. As online marketplaces run promotional campaigns from time to time at a discounted price, your products will have a better way of getting marketed or advertised to the customers.

On your personal e-commerce website, it costs a lot of money to run promotional campaigns. The average cost of placing an ad on Google is $2.32 per click. When you are a seller on an online marketplace, you can join the promotional campaigns run by the website for free.

Cons of Online Marketplace

While your money is saved in an online marketplace to some extent, it also comes with several downfalls that arent favorable for many:

1. No Brand Following

When customers buy products from an online marketing place, they usually remember the name of the website and not the seller. For example – if someone brought perfume from you, they will usually recall that they purchased it from Amazon but will not remember your brand name.

This makes your brand almost invisible and does not gather a large following of customers. Hence, there are chances that a customer will not remember the seller’s brand even though the seller is excellent at providing service.

2.  No Control Over The Design

In your personal e-store, you have the flexibility to use various kinds of templates, designs, and features that will enhance your website to look unique. You display your products in a creative manner or categorize them according to your taste. This makes the website stand out from the others and catches the eye of the customer.

When you sell in online marketplaces, you don’t have any control over the design of the website. This ends up in two sellers appearing exactly the same while selling them on one online marketplace.

This also results in the website design and color not matching your brand. For example-  if your products are pastel dresses but the website has dull colors and a boring design, it can result in a lower than average presentation of your displayed apparel.

3.  No Email Marketing

Unlike e-commerce websites where you can collect the email addresses of various customers, in an online marketplace, you don’t have that option.

Only the online marketplace has access to customer’s email addresses. This results in no email marketing advertising from the seller’s side.

4. No Say In Drastic Changes

If an online marketplace decides to take a drastic step, like shutting down or eliminating certain seller’s products, there are high chances that the sellers don’t have any say in it.

You as a seller cannot participate in high-level decisions. In 2021, the food and beverage wholesaling platform, Hubba, cut brands from its website. This left many sellers helpless as it announced its closure just a week after the decision was taken.

Finally, E-Commerce Website Or Online Marketplaces In Canada?

There is no simple yes and no answer as to how should people start their online business. Both options need to be researched well and one must carefully consider their pros and cons.

These are some of the basic questions to ask while starting your business:

  • Can you afford to start your own personal website online?
  • Will you be able to afford the costs that will come while creating an e-store?
  • Will you be able to control the website solely instead of hiring anyone else?
  • Can the monthly costs be incurred by you?
  • Will an online marketplace sell your products well?
  • Are you alright with the fact that your brand is not as visible as others in an online marketplace?

Deciding on making a brand or selling on an online marketplace is a tough decision to make in Canada. Consider your goals and understand your priorities. To make money fast without spending much, an online marketplace is ideal. However, if you are willing to settle for a long-term profitable business, an e-commerce website is the way to go.

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