Why You Shouldn't Rely on External E-Commerce Platforms

Introduction

In the age of the digital revolution, where every other store has its own online shop, having a digital counterpart seems almost mandatory to maintain a competitive edge. While ready-made e-commerce platforms like Shopify and marketplaces such as Allegro, Amazon, and eBay offer an easy start, they also come with their drawbacks. In this article, we will discuss why it is worth investing in your own e-commerce platform instead of relying on ready-made solutions.

Why Marketplaces (Allegro, Amazon, eBay) Are Not a Great Solution?

Limited Control Over Marketplace

Selling on marketplaces like Allegro, Amazon, or eBay requires adhering to many rules and restrictions imposed by these platforms. For example, you have little freedom in adjusting prices, product descriptions, or payment methods to suit your needs. Amazon, for instance, has strict rules regarding product descriptions and photos, which limits your creativity and ability to stand out from the competition. Additionally, these platforms can make changes to their regulations, which can suddenly hinder or entirely prevent your sales.

Lack of Customer Data Ownership

On marketplaces, you do not have full control over customer data. This means you do not have access to complete information such as email addresses or purchasing preferences of your customers, limiting your ability to run effective marketing campaigns. Without this data, it is harder to build long-term relationships with customers and personalize offers. Owning your online store gives you full control over customer data, allowing for more effective targeting and personalization of marketing communication. This enables remarketing campaigns, email marketing, and offer customization based on customer behavior analysis.

High Commissions

Marketplaces charge commissions on each transaction, significantly reducing sellers’ profit margins. For example, Amazon can charge commissions ranging from 8% to even 15% depending on the product category. Additionally, you may incur extra fees for using certain services, such as fulfillment (e.g., Fulfillment by Amazon - FBA). High transaction costs can significantly affect profitability, especially in low-margin industries.

Risk of Dependency

Many online stores fully base their operations on platforms like Allegro, Amazon, or eBay. Such dependency is extremely risky because any changes in the policies of these marketplaces can have catastrophic consequences for your business. For example, if a marketplace decides to raise commissions or change search algorithms, it can drastically impact your profits and sales. In extreme cases, the platform can suspend or delete your account, leading to a sudden and significant revenue drop.

Relying on a single sales channel means you are at the mercy of the platform’s decisions, which can change the rules of the game without your consent. It is like building a house on someone else’s land – you never know when you might be left with nothing. Therefore, it is better to “build a house on your land,” meaning invest in your online store, giving you full control over your business.

Diversifying sales channels and owning your online store minimizes this risk. It is recommended that marketplaces constitute no more than 10-20% of your sales, providing greater stability and control over your business. With your e-commerce platform, you can adapt your sales strategy to changing market conditions and avoid sudden and unfavorable changes imposed by external platforms.

Why Shopify and Other Ready-Made E-Commerce Solutions Are Mediocre?

Optimization, CRO

Ready-made e-commerce platforms like Shopify offer conversion rate optimization (CRO) tools, but they are often insufficient for more advanced needs. While Shopify allows A/B testing through external applications like Google Optimize or Optimizely, the lack of full control over the site’s code and architecture can limit flexibility in conducting more complex tests and personalization. For example, advanced user behavior tracking, dynamic content personalization on the site, or complex conversion paths can be harder to implement on a platform that does not allow full access to the source code.

Dependence on Subscription Tiers

Using ready-made e-commerce platforms like Shopify means dealing with subscription plan dependencies. Each subscription level offers different features and resources. Lower plans may not include all necessary features, forcing you to upgrade to more expensive plans to access more advanced tools. Additionally, changes in subscription prices can affect your business’s profitability, which can be frustrating, especially when the budget is tight.

Lack of Custom Functionality

Shopify and other ready-made e-commerce platforms have limitations in adding custom features. While a wide range of applications is available on the Shopify App Store, adding unique features such as price calculators, advanced product visualization tools, custom payment modules, dynamic product recommendations, or complex loyalty systems can be complicated or costly. In many cases, integrating these features requires additional technical skills and may involve extra costs. For companies needing more individualized solutions, these limitations can pose a significant obstacle.

Limited Analytics and Marketing Automation

E-commerce platforms like Shopify offer basic analytics and marketing automation tools, but they may not suffice for more advanced needs. While integration with Google Analytics is possible, the platform’s built-in analytical features are limited. The same applies to marketing automation – Shopify’s built-in tools may be adequate for basic campaigns, but for more advanced strategies like advanced customer segmentation, personalized email marketing campaigns, or automatic product recommendations, they may be insufficient.

Low SEO Potential

Ready-made e-commerce platforms often have limitations in terms of SEO optimization, which can lead to high customer acquisition costs (CPA) and low return on ad spend (ROAS). Restrictions in access to the site’s code and URL structure can affect the ability to implement advanced SEO techniques. This can result in lower visibility in search results, requiring higher spending on paid ads to attract traffic to the store.

What Does Your Own E-Commerce Provide?

Full Control Over Customer Data and Sales

Having your online store gives you full control over customer data. This allows you to better target your marketing campaigns and personalize offers, leading to higher conversion rates and greater customer loyalty. By accessing customer data such as purchase history, product preferences, or interactions with your site, you can create more effective and personalized remarketing and email marketing campaigns. This, in turn, allows for more efficient use of the marketing budget and achieving better sales results.

More Sales Channels

Your online store enables using various sales channels, such as SEO, SEM, marketplaces, and upselling. You can integrate your site with platforms like Google Shopping, Facebook Ads, or Amazon, reaching a wider audience. Additionally, owning your store allows running upselling and cross-selling campaigns directly on your site, increasing cart value and revenue. By using different sales channels, you can better diversify your revenue sources and reduce the risk associated with dependence on a single channel.

Ability to Implement Custom Features

Owning your e-commerce platform gives you full freedom in adding any features and optimizing the store according to your needs. You can introduce unique solutions like price calculators, advanced product visualization tools, or custom payment modules. This allows better adaptation of the store to the specific requirements of your customers and distinguishing yourself from the competition. Custom features can also include advanced content personalization tools, dynamic product recommendations based on machine learning, and integrations with CRM and ERP systems.

Advanced Analytics

Your online store allows implementing advanced analytical tools that enable precise monitoring of user behavior and drawing valuable insights from the data. By integrating with tools like Google Analytics, you can analyze site traffic, customer purchase paths, and the effectiveness of marketing campaigns. Advanced analytics allow for better understanding of customer needs and behaviors, which in turn enables optimizing marketing and sales strategies and increasing the effectiveness of business activities.

Diversification of Revenue Sources

Having your online store allows diversifying revenue sources, reducing the risk associated with dependence on a single sales channel. You can use different sales strategies, such as direct-to-consumer (DTC), marketplace sales, and partnerships with other companies. Diversifying revenue sources increases the financial stability of your business and enables better risk management in a changing market environment.

Better SERP Positioning

Having your e-commerce, especially based on modern technologies like Strapi and Next.js, allows for better positioning in search engine results (SERPs) compared to ready-made e-commerce solutions like Shopify or WooCommerce. Learn more about how combining Strapi with Next.js gives a competitive advantage.

With full control over site architecture and the ability to implement advanced SEO techniques, you can more effectively optimize your site for search engines. This leads to higher visibility in search results, resulting in more organic traffic and lower customer acquisition costs (CPA).

Own Integrations and Plugins

Having your online store enables creating your integrations and plugins, giving full control over the store’s functionality. You can integrate the store with marketing automation tools, CRM systems, ERP systems, and advanced analytical tools. An example could be introducing AI to e-commerce, allowing for automating business processes, personalizing shopping experiences, and better managing customer data. Own integrations and plugins allow creating unique solutions tailored to the specific needs of your business.

Differences Between E-Commerce and Marketplaces

Traffic and User Engagement

• E-commerce (own store):

Traffic generated through SEO, SEM, social media strategies, etc.

Greater difficulty in initially attracting traffic.

Full control over user engagement.

• Marketplaces (Allegro, Amazon, eBay):

High traffic and reach thanks to a built-in user base.

Easier start, but limited ability to build customer relationships.

Costs and Commissions

• E-commerce (own store):

No sales commissions.

Costs of server maintenance, marketing, and site development.

• Marketplaces (Allegro, Amazon, eBay):

High sales commissions.

Additional fees for premium services.

Lower profit margins.

Branding and Customer Loyalty

• E-commerce (own store):

Full control over branding.

Ability to build customer loyalty.

Access to full customer data enabling personalization and remarketing.

• Marketplaces (Allegro, Amazon, eBay):

Harder to build loyalty and brand.

High competition.

No access to full customer data.

Summary

Owning your online store gives you full control over customer data, enables implementing custom features and advanced analytics, allows diversifying revenue sources, and better positioning in search results. With your e-commerce platform, you can create more personalized and effective marketing campaigns, leading to higher conversion rates and customer loyalty.

Ready-made e-commerce platforms and marketplaces like Shopify, Allegro, Amazon, or eBay can complement your sales strategy, especially in the initial stages of operation. They offer an easy start and access to a broad customer base. However, their limitations, such as high commissions, lack of full control over customer data, and dependence on external providers, can pose significant challenges in the long term.

Investing in your e-commerce solution gives you greater flexibility, control, and optimization opportunities, translating into better financial results and business stability. Building your online store is a strategic step that allows avoiding risks associated with dependence on external platforms. Your e-commerce gives you the freedom to operate and adapt to changing market conditions, which is crucial for long-term success.

Therefore, it is worth considering creating your online store as a strategic step in your business development. You gain not only greater control but also the ability to build lasting relationships with customers and optimize your marketing efforts. Investing in your e-commerce solution is an investment in the future of your business.

Tips for Migrating from Ready-Made Platforms to Custom Solutions

Migrating from ready-made e-commerce platforms like Shopify to your solution can be challenging, but proper preparation will make the process smooth. Here are some key steps to consider:

1. Analyze Needs and Goals: Determine what features and tools are essential for your store.
2. Choose the Right Tools and Technologies: Select technologies that will support your business’s growth.
3. Migration Planning: Create a detailed migration plan covering all stages of the process.
4. Data Migration: Ensure all data is securely transferred to the new system.
5. Testing the New Store: Thoroughly test all features and tools before launching.
6. Implementation and Monitoring: Monitor the operation of the new store to quickly detect and fix any issues.
7. Customer Communication: Inform customers about the changes and ensure their data is safe.

Migrating to your solution can bring many benefits, and we will write more about the details in a separate article.