E-commerce has revolutionized the way businesses connect with their customers. For small business owners and e-commerce entrepreneurs, large platforms like Amazon, eBay, and Shopify present attractive opportunities—and some not-so-attractive challenges.
You might be wondering if you should leverage one of these giants for your business. Keep reading as we highlight the pros and cons of using a large e-commerce platform to help you decide the next step in your venture.
Pro: Reaching a Global Audience
One of the greatest advantages of using large e-commerce platforms is their immense reach. Leading marketplaces like Amazon and Etsy provide access to millions of visitors daily, giving small businesses the ability to connect with a global customer base that would otherwise be out of reach. Even a niche product can find its target audience when listed on a platform with billions of views each month.
Con: The Price of Partnership
Fees are a significant drawback to consider. Most large e-commerce platforms charge listing fees, transaction percentages—or worse, all the above. For example, Amazon’s individual seller plan charges $0.99 per sale, while its professional plan comes with a $39.99 monthly subscription fee—this does not include referral fees or fulfillment charges.
The costs can add up quickly and slash profit margins, especially for smaller orders or businesses with tight pricing. Additionally, many platforms hold significant influence over final pricing strategies to remain competitive, further impacting revenue.
Pro: Built-In Infrastructure and Support
Running a standalone e-commerce website often means grappling with technical logistics, such as payment processing, shipping solutions, and website maintenance. On large e-commerce platforms, these features are often included.
For example, Amazon provides tools like Fulfillment by Amazon (FBA), where storage, picking, packing, and shipping are managed for you. The reality is, many small businesses scaling for a large platform may not have the time or manpower to handle these tasks.
Con: Navigating Intense Competition
While large platforms offer remarkable reach, the competition is fierce. Businesses find themselves battling thousands of sellers offering similar—or even identical—products. Standing out typically requires aggressive pricing, stellar reviews, or specific marketing strategies, which can pressure profit margins.
For instance, new sellers on Amazon often face challenges ranking their listings amidst already-established products. Many entrepreneurs find it takes time, resources, and strategic marketing investments to secure visibility.
Pro: Boosting Credibility and Customer Trust
Shoppers trust platforms like eBay, Amazon, and Etsy due to established reputations for secure transactions and customer satisfaction. Small businesses can benefit from this credibility by association. Many customers are more likely to purchase from an unfamiliar seller if they do so through a known platform.
Are You Prepared To Sell on a Large Platform?
If you’ve developed a clear product line, can handle large-scale shipping logistics, and are willing to monitor fee structures and competition trends, you might be ready to sell on platforms like Amazon. These platforms work best for businesses that have plans for scalability, balance the loss of individual branding against the benefit of increased reach, and can invest time into harnessing platform tools effectively.
Deciding whether to sell on large e-commerce platforms is about weighing the pros and cons carefully. Recognizing how your business fits into this landscape is critical. If you’re ready to explore the opportunities these platforms offer, consider every facet—because success often lies in informed decision-making.