Want to Sell Goods Online? Here Are 4 Online Marketplaces to Consider
Thanks to the rise of e-commerce, small business owners no longer have to set up brick-and mortar stores to sell their goods. Now they can just sign up on a website, add their items and watch the sales roll in, right?
Eh, not quite.
There are a lot of factors to consider when choosing an online marketplace: What are the costs? Do they charge a flat, up-front payment or ongoing fees? Are there restrictions on who can join and what can be sold? What type of products do well? What is the overall ease of use?
It’s a lot to consider, but this is your business we’re talking about, after all. You want to make sure the time, effort and expenses you’re putting into a platform are paying off.
That’s why we broke down the features of the top online marketplaces and also talked to actual small business owners to get the 411 on each.
Here Are Four Online Marketplaces to Consider
Let’s go ahead and start with the biggest player in the online selling scene: Amazon. Maybe you’ve heard of it.
The online bookstore turned e-commerce goliath has become a one-stop shop for practically any item your heart desires. That means that, as a small business owner, regardless of your product, you can probably peddle it on Amazon (although, some categories require prior approval).
A perk of selling on Amazon is the sheer number of people visiting the site, which could potentially mean more customers seeing your product. But at the same time, you’re also competing with a lot of other sellers. It’s a small fish, monstrous pond scenario.
Jennifer Boaro, owner of The Cat Ball, sells on multiple platforms: Amazon, Etsy and Shopify. The huge audience is a big reason she likes Amazon, but she says it’s one of the more difficult ones to learn, especially if you’re not particularly computer-oriented.
“If you have never done this before and suddenly you’re faced with that interface, it can be daunting,” she says. “However, Amazon does have an easy-to-use self-search help tool.”
Pricing and Features
Amazon offers two selling plans, Individual and Professional, with varying fees depending on your product.
The individual plan is for people who plan to sell fewer than 40 items a month. It doesn’t have a monthly subscription fee, but sellers pay 99 cents per sale, plus the other selling fees. For those selling more than 40 items a month, there’s the professional plan. It’s the opposite of the Individual plan: There are no per-item fees, but there is a $39.99 monthly subscription fee — plus the regular selling fees.
So what are these mysterious selling fees? First, you’ve got the referral fee, which is a percentage of the total price of each item sold. It varies by category but typically ranges from 3% to 45%, and almost all categories have a minimum referral fee of $1.
Other costs that can factor into your Amazon selling are closing fees, high-volume listing fees, refund administration fees and shipping.
Amazon sellers can either handle shipping on their own or use Fulfillment by Amazon (FBA), which of course will add more costs to your list.
Boaro uses FBA for some of her products and thinks it’s worth the price because customers who see the Amazon Prime logo are more inclined to buy — gotta have that free two-day shipping, baby!
Another reason she likes the FBA option is because it just makes her day-to-day life easier.
“It also allows me to get items out of my garage and into their warehouse,” she says. “It’s less work for me to send one box of 10 than send 10 shipments.”
If you’re torn, Amazon has a nifty revenue calculator to help you out.
It’s also important to point out that there are technically two different platforms for sellers: the standard Amazon site and Amazon Handmade.
Amazon Handmade requires approval to join, and all products you sell must be entirely made by hand, hand-altered or hand assembled. For Handmade, the company waives the monthly subscription fee, but there is a 15% referral fee for each item sold.
One caveat for Handmade: When consumers search for a product on the regular site, Handmade items won’t be listed unless they specifically choose that category.
Some Standout Features:
- It’s one of the world’s largest online retailers, with reportedly 44% of online shoppers starting with Amazon before anywhere else.
- Fulfillment by Amazon can alleviate day-to-day business tasks.
- The Amazon Prime feature can draw in more buyers.
If your small business is in the, er, business, of handmade or craft goods, consider selling on Etsy.
Etsy is similar to Amazon Handmade, but it’s more of a niche marketplace for artisans looking to sell their wares. One notable difference: Etsy’s requirements are less stringent. Sellers can list goods that aren’t necessarily handmade, such as craft wares or vintage items.
The platform is particularly popular for unique and quirky things you wouldn’t find elsewhere, such as jewelry, artwork, home decor, costumes and gift-type items.
Katrin Lerman owns a handmade jewelry shop called Frosted Willow and started selling on Etsy nine years ago. In the years since, she has started selling through Amazon Handmade and Shopify, but Etsy is her favorite.
The majority of her business comes from the site, she says, because Etsy customers tend to come with more intention to buy a specific item than Amazon shoppers. She also thinks Etsy is the easiest platform to use and the least expensive way to start out for small business owners.
“Etsy really caters to the handmade,” she says. “They understand [handmade] better than Amazon… [which] is very strict with all of the rules.”
Pricing and Features
There aren’t any monthly subscription fees to sell on Etsy, but of course there are the various selling fees.
Sellers pay a listing fee — 20 cents per item — and listings will be active for either four months or until they sell. Lerman’s shop has over 700 items, and she stresses that strategic keyword usage is imperative for getting eyeballs on your store.
Then there is a fixed transaction fee, 5% on the sale price of each item you sell, not including shipping. Finally, the Etsy payment processing fees come out to 3% of the the total sale price, plus 25 cents.
When you sign up to sell on Etsy, you get access to free tools that can help you manage and grow your business. Some examples include the Sell On Etsy app, advertising tools, access to discounted postage and the option to promote sales or coupons.
If you like the free resources but you’re willing to fork over a little extra dough, you can sign up for the Plus plan at $10 per month. You’ll get access to extra marketing materials, discounts on custom shipping boxes, more options for customizing your shop and the ability to email customers when you restock an item.
Some Standout Features:
- No monthly subscription fees.
- Caters specifically to the handmade/artisan community.
- Free promotional and advertising tools made available to vendors.
A relatively new e-commerce platform, Shopify is a good option if you want a little more control. Instead of just listing your goods on aggregate selling sites like Etsy and Amazon, Shopify gives you the means to have your very own online store.
Shopify started as an online store itself before transitioning to an e-commerce platform, and it now hosts over 600,000 businesses around the world, earning its spot as a top online marketplace.
One is Permafrost Beards, an Alaska-based company owned by Nick and Courtney Adkins.
The couple browsed other platforms such as Etsy but ultimately didn’t feel like the others were a good fit for their beard care products. Plus, a friend and fellow small business owner recommended Shopify, so the rest is history.
Pricing and Features
Shopify has three plans — $29, $79 and $299 per month — and lets sellers try the platform for free for 14 days. Obviously, your plan choice will depend on your needs, but the basic $29 plan is likely enough for most small business owners. (It’s the one the Adkinses use.)
On top of the monthly subscription, Shopify also charges various payment processing fees — all of which decrease with each plan upgrade. Each plan also gives access to shipping discounts with the U.S. Postal Service, UPS and DHL Express. Similar to the payment processing fees, the more expensive your plan, the bigger the discount you get.
Upon signing up, you’re given a free myshopify.com domain name. Alternatively, you can use a previously purchased domain name or buy one through Shopify that doesn’t include the “myshopify” part.
Now for the fun part: building your website. Shopify has over 100 free, customizable themes and templates to choose from. And the best part is, the user interface is pretty easy to pick up even if you’re not particularly tech- or design-savvy.
When Nick Adkins retired in 2016 after serving more than two decades in the Army, he barely had experience with smartphones, let alone building a website.
“I’m OK with computers. I’m not amazing,” he says. “But [Shopify has] some of their own videos to tell you how to do things.”
He and his wife sat down, did some research and watched some videos, and within eight hours had the Permafrost Beards site up and running.
A major selling point for Shopify is the amount of free resources it offers. There are guides covering topics such as analytics, marketing and fulfillment and tools like a pay-stub generator and gift-certificate templates. But one drawback is the lack of an easy way to print invoices, according to Nick Adkins.
As far as expenses go, we’ve only talked about the subscription and payment processing fees, but it’s worth mentioning that an app store exists within the platform, with both free and paid versions.
Permafrost is currently using two paid apps, Parcelify for shipping and Pop-Up Window, which asks visitors to join the mailing list and alerts customers when they’re on vacation. Each costs about $5 per month.
“Depending on what you’re doing, these fees can add up,” Nick Adkins says. “As you get different apps and want to do more things… you’ve got to assess the value.”
Some Standout Features:
- User-friendly interface with hundreds of free website templates.
- A built-in app store to add features to your site.
- Free marketing, promotional and analytics resources.
Similar to Shopify, Squarespace is a platform worth considering if you’re interested in having your own online store instead of listing on a third-party selling site. That was a big reason Blake Wingard, owner of Glass By Blake, has stuck with the platform after trying a few others over the years.
Currently, Wingard has a Squarespace website and an Instagram page, which features a link to his Squarespace shop. He used to have an Etsy store as well, but didn’t stick with the platform for long.
A glassblower by trade, Wingard’s pieces typically range anywhere from $100 to $1,000. He felt that the prices he was selling at didn’t quite mesh with the audience visiting his shop on Etsy. People weren’t buying, so he decided it was best to stop funneling money into a platform that wasn’t paying off.
Pricing and Features
Like Shopify, you get a free 14-day trial.
Squarespace offers four plans broken into two categories: websites and online stores. (The basic website plan is the cheapest, but it’s just a personal site without e-commerce capabilities, so we’re going to skip that.)
The other website option is listed as a “business plan” and includes a free custom domain name, fully integrated e-commerce and an unlimited inventory option. It costs either $216 annually or $26 month to month, and also charges a 3% transaction fee per purchase.
Alternatively, you can opt for an online store plan. The basic plan is $312 annually or $30 month to month. The advanced plan is $480 annually or $46 month to month.
Both plans come with everything you get from the business website plan and then some. Extra features include integrated accounting, access to business metrics, label printing and the ability to sync your listings with Instagram. Also, that 3% transaction fee is waived from the online store plans.
Squarespace integrates Stripe, PayPal and Apple Pay for payment options, and you’ll have to pay those processing fees, which are typically 2.9% plus 30 cents.
The platform also offers marketing tools, such as email campaigns and search engine optimization assistance. Wingard says he pays an extra $10 per month so his page ranks higher on Google searches.
Wingard acknowledges that Instagram is the biggest player when it comes to his sales, and the majority of his website traffic comes from his followers rather than straight from Google. But he says the Squarespace website gives his business a professional look and doesn’t foresee leaving it behind anytime soon.
Some Standout Features:
- Free two-week trial period.
- Four different plan options offer business owners flexibility.
- Free custom domain name.
Kaitlyn Blount is a staff writer at The Penny Hoarder.