How to set up shop online: online marketplaces vs your own platform

It’s no secret that Australians are developing a taste for online shopping, and it’s easy to see why: it’s quick and convenient, with no busy checkouts and often better value and choice.

Collectively, we spent a whopping $21.3 billion buying goods online in 2017, and by 2020 Australia Post estimates that one in 10 items will be purchased via the internet.

If a fast, reliable service is important for your customers, contact Commander, the  SMB telco specialists.

For start-ups and small businesses looking to get a slice of the pie, there are two ways to set up shop online: you can create your own webstore, or peddle your wares through a third-party marketplace.

Building your own webstore

Although it’s more of an upfront investment, there’s a lot to be said for starting your own webstore. No fees means you’ll take home more revenue, you’ll have more control over your branding and customer experience, and younger shoppers may be more inclined to buy from you – since according to Entrepreneur’s Handbook, 18- to 26-year-olds are more likely to purchase from independent retailers online.

Unlike going through an online marketplace, you’ll also own all your sales. This means you’ll have access to customer data, which you can use for developing mailing lists and other marketing strategies to help you build up a loyal following.

Advertising and marketing need to be a strong focus if you’re going to attract attention to your webstore, including making sure it’s SEO friendly so that it’s easy to find when people search for keywords related to your products. With one in five online purchases made via a mobile device in 2017, it also needs to be mobile friendly as more Australians become accustomed to working and shopping on their phones.

Online marketplaces

Business is booming for online marketplaces, which experienced growth of 74.8% in 2017, and there are certainly some clear benefits for retailers:  it’s easy to get up and running quickly; they’re high-traffic sites, which gives you access to more sales and exposure; and you don’t need to stump up for a domain name, design, initial setup and so on.

There are advantages from a customer experience perspective, too.

“Not only are they hosting the technology, but they should also be the experts in the user experience – so they should be the ones that help you to ensure that you’re successful in selling your products,” says Daniel Kelly, general manager of business products and marketing at Vocus Group.

Each online marketplace will have its own fee structure, and they can get quite complicated. But if you’re interested to know your profit potential on Etsy, for example, this handy calculator can help you get an idea.

All systems go

One of the major benefits of online marketplaces is that the onus is on them to keep the system up and running smoothly. With all the confusion regarding the NBN rollout, this can help protect against headaches, lost sales and negative customer experiences associated with service disruptions.

George Arnold of Scrambled Studios moved into a brand-new townhouse in St Albans in August last year and has spent the past seven months trying to work without an internet connection.

“We don’t have ADSL, and because of how we’re positioned there are no other connections available, so we just have to wait for the NBN, which is supposed to be coming at the end of May,” he says. “I’m working off my phone plan and a personal hotspot wifi, but although it’s unlimited it gets really slow after 40GBs and there’s probably certain jobs that I wouldn’t even try to do or accept to do until I have NBN here, because motion graphics and video editing is hugely dependant on getting files uploaded quickly and getting client feedback as soon as possible.”

Fortunately, Arnold can work at other studios when he needs to, but for retailers a poor connection could be very bad for business.

“When you’re online, your customers are going to expect that you’re 24/7,” Kelly says. “If someone else is dealing with the reliability of that connection, you need 24/7 tech support to make sure your equipment is working.”

Vocus Group owns the telco provider Commander, which as an SMB specialist understands the critical importance of a fast, reliable service – particularly in a world where we are outsourcing more often to cloud-based systems, such as online marketplaces.

“In order for cloud computing to be successful you need to have good internet connections,” Kelly says. “That’s goes whether that’s a mobile connection on the go, or your laptop or desktop within your own premise. The bottom line is we need to be able to do business whenever and wherever it suits us.”