Online marketplaces can connect your e-commerce business with millions of buyers across the world. But which one is right for you? Read on to discover the pros and cons of the world’s top platforms.

Amazon

Pros

• Selling on Amazon means reaching millions of people. In the USA, there are over 200 million unique visitors per month and over 110 million Amazon Prime subscribers, 20% of whom shop on Amazon a few times a week.

• Nearly half of US product searches start on Amazon (even beating Google), meaning products listed on Amazon will be found by customers first.

• Amazon Marketplace is relatively easy to set up on, and its Fulfilment By Amazon service will handle inventory and delivery for you, including international shipping.

 

Cons

• Having an Amazon store is highly competitive – in the USA, more than 300,000 small and medium-sized businesses sell through Amazon Marketplace. To cut through, your product will need a unique selling point (USP) or you may need to reduce your prices.

• In addition, further competition comes from Amazon itself, which sells its own products on the site.

• For businesses selling low-margin products, Amazon’s relatively high referral fees – averaging around 15% – will quickly eat into profits.

• Amazon Marketplace Partners are responsible for handling customer service issues themselves, so if you’re not in the position to resolve complaints quickly, your seller rating (and in turn, your sales) will suffer.

Alibaba / Tmall Global

Pros

• As the biggest cross-border e-commerce platform in China, with 25% market share, Tmall Global is your gateway into the lucrative Chinese market.

• Unlike its sister site Tmall.com, Tmall Global is specifically set up for foreign brands – you don’t have to have a physical entity in China or a Chinese business license to sell on the platform, and you can accept payment in your local currency.

 

Cons

• Alibaba's Tmall Global prioritizes medium to large businesses: a seller’s annual sales must be more than USD$10 million, which prices out many SMEs.

• The seller must have locations for handling returns on the Chinese mainland.

• Though Tmall Global’s sales commission fee is relatively low – typically between 2-4% – the service fees can be steep and only redeemed if the seller hits certain sales targets.

• Before you even begin trading, you must provide a USD$25,000 security deposit, so cost of entry to this market is high.

WeChat Store

Pros

• WeChat’s popularity isn’t limited to China – as of April 2020, it had over 1.1 billion monthly active users worldwide, from a wide range of age groups.

• The convenience of WeChat Pay encourages spending – users simply connect it to their bank account and can then make purchases with a simple click on their phone.

• Sellers can segment their Official Account list of followers in order to target a particular group.

• You can send discounts directly to customers to keep them engaged with your brand.

 

Cons

• WeChat is primarily a messaging service; it doesn’t have organic traffic proactively searching for products as on other e-commerce sites. To attract customers, you’ll need to be prepared to spend on advertising and social marketing.

• The search box of WeChat is only receptive to specific keywords – again, you’ll need to invest in this area to ensure customers find your product pages.

eBay

Pros

• eBay’s global reach and trusted name mean many customers start their product searches there, putting products on the site in a better position to be found than independent e-commerce websites.

• eBay sellers keep an average of 5.13% more of their profits than if they sold the item on Amazon.

• Sellers receive a certain number of free listings each month.

• eBay uses PayPal, making it easy for sellers to accept payment in real-time and giving them all the security cover of the service.

• If you do choose to sell via the auction format, this can drive up your final sale price.

Cons

• eBay prioritizes sellers who can ship their items in 24 business hours or less – if they don’t, then their listings will have less visibility in the search results.

• In the US, if a seller’s eBay account doesn’t meet or exceed the minimum performance standards, the platform charges them additional fees when an item is sold.

• The platform offers upgrades to listings such as a larger gallery for photos, bold listings and themed layouts – all of which cost extra and can quickly add up.

Etsy

Pros

• A targeted customer base: Etsy is the go-to website for customers searching for unique and personalized gifts.

• Setting up a store is easy, and there are dedicated sellers handbooks and community forums for extra support.

• The site has a marketing tool, Etsy Ads, to help sellers run advertising campaigns, with useful analytics and SEO support to attract more customers.

• The mobile app makes it easy to communicate with customers and answer their questions on the go.

Cons

• Due to its popularity, the marketplace is pretty saturated. You’ll have to be creative to stand out!

• Not necessarily a negative, but be aware that Etsy is heavily skewed towards women and millennials - 81% of their customer base is female. Obviously this can also be a pro depending on your target consumer!

 

Ultimately, the right marketplace for your e-commerce business is the one where your target customers are. And try using analytics tools such as SimilarWeb to find which marketplaces have a customer base that matches your target market.