Location is everything in retail—no one can shop at your store if they can't find it. That applies just as much to eCommerce as it does to brick-and-mortar stores, and for the same reason: you want to open in a place with regular traffic that's convenient to get to.
But when it comes to online retail, your options are much different. Do you build your own store, or open up shop in an already established marketplace? Or maybe the shop itself is secondary and you focus mainly on selling through social media?
I've been writing about eCommerce for a while now, and I've seen massive shifts in the eCommerce landscape. Here, I'll cover the best places to start your online store right now, including pros and cons and a handful of recommendations, so you know how to get started.
How to sell online: Choosing where to open your eCommerce store
Starting an online store doesn't require as much investment as starting a brick-and-mortar store, but you still have to address many of the same concerns. Chief among them: opening where your target customers are.
When it comes to eCommerce, you have three main options:
Building your own website and generating your own traffic
Selling on an already established online marketplace like Amazon or eBay
Focusing on social media as your primary channel
I'll get into details below, but here's the gist. Building your own site gives you full control over your business, but it requires more effort and resources to attract shoppers. Selling on an already established marketplace offers built-in traffic, but you sacrifice some control and pay extra fees. And social media selling is a bit of a hybrid.
No one choice is inherently better than the others: there are sellers who have struck it rich with each method, and those that, um, have not. It depends entirely on your business model and what management style you're comfortable with. Keep that in mind as you review your options below.
1. Online marketplaces
Think of selling on online marketplaces like opening a shop in a popular mall. People are always coming in and out, so you don't have to invest as much to attract shoppers. You still need a dedicated marketing budget, though—after all, you'll face some of the fiercest competition selling on platforms like these.
On the whole, established online marketplaces bring in much more traffic than independent websites. That can be a huge relief for some shop owners because, to put it another way, if you're not selling on Amazon, you're competing against Amazon.
Of course, there are downsides for all those benefits. Aside from the competition, you also have to deal with extra fees, policy requirements, and limited customization and design options—the price of admission for all that "free" traffic. This can feel suffocating for sellers, especially if your business model utilizes creative or outside-the-box thinking.
Advantages of selling on online marketplaces
Built-in traffic. Often, people ready to buy something online first check in with their favorite marketplace, so there are always shoppers within reach.
Innate advertising options. Most online marketplaces have built-in advertising options, which makes marketing a lot simpler and easier than trying campaigns across the vast internet.
More logistical options. The big online marketplaces often offer services for sellers, like storage and shipping. Although these options aren't free, they can effectively streamline your business and give you fewer things to worry about.
Seller communities. Because there are so many sellers on these marketplaces, there are plenty of forums and online communities where you can go for advice, troubleshooting, or just meeting like-minded individuals.
Disadvantages of selling on online marketplaces
Fees. To sell on online marketplaces, you often have to "kiss the ring." These platforms charge multiple fees for the right to sell there, which cut into your profits.
Rules and policies. For the sake of protecting their shoppers, online marketplaces usually have universal rules and policies, such as prohibiting certain items or mandatory return policies.
Competition. You're certainly not the only one taking advantage of an online marketplace's traffic. The bigger the marketplace, the uglier the competition.
Difficulty of breaking in. That competition is the worst for new sellers. You need to research carefully to find a foothold if you want to break in, or else another more experienced seller will offer a better deal.
The best online marketplaces for selling
The world's largest marketplace is also the most unforgiving for sellers. Amazon excels at all the advantages of online marketplaces: more traffic than any other eCommerce site, native advertising directly in Amazon search results, a vibrant community of sellers, and opportunities like FBA and A+ Content.
But the disadvantages are also more formidable. To break through the wall of competition, you really need to research and find a solid market opening, whether a new product or an existing product at a lower price. Their fees and policies can also be an obstacle for some, but success on Amazon usually nets enough to compensate.
eBay trails behind Amazon by billions of monthly visits, but it still offers enough traffic to make it viable, especially if you take advantage of its specialty: rare and used goods.
The advantage eBay has over Amazon is that it's a haven for collectors. Because of its optional auction-style bidding, eBay is the go-to place for antiques, collector items, and vintage goods—the kinds of products you'd find at a swap meet. If that's what you intend on selling, it's definitely worth a look.
Walmart is trying its hardest to dethrone Amazon, and over the years, it has made some headway. They may not have the numbers Amazon has, but they have enough shoppers to sustain a successful online business.
For sellers, Walmart's appeal is not only fewer fees, but also less competition. However, one of the reasons they have less competition is their strict signup process: Walmart requires a business tax ID and U.S.-based business address to sell—plus, you have to present your business plan for approval. Many sellers wind up on Amazon simply because they don't make the cut at Walmart.
Etsy is a niche online marketplace, so it's not suitable for every seller. But if you're selling original and handmade goods, Etsy offers a steady stream of shoppers looking for just that.
2. Build your own site
If you find it a burden to sell on sites like Amazon or eBay, you can always build your own. Running your own eCommerce website appeals to people who value independence and don't mind taking the reins. Of course, it's more work, but it yields more rewards.
One of the top perks of managing your own site is that you keep more of your profits. Don't be too hasty, though: most of that money you save goes back into your marketing budget. Without the built-in audience of established online marketplaces, you're left to make your own customer base from scratch.
Make no mistake about it: managing your own site isn't easy. But if you're dedicated enough, and offer something other stores don't, you can create a thriving business and be your own boss. After all, that's how Amazon started many years ago.
Advantages of building your own eCommerce site
Control over design. When you own a site yourself, you're free to design it any way you want, including your choice of what to feature on your home page and using your own branding colors. This is a stark difference from being stuck in the templates of other online marketplaces.
Make your own rules. Unlike online marketplaces, you're free to create your own policies for returns, shipping, subscriptions, etc. This allows for more creative and even experimental business models.
No extra fees. In other words, you make more money per sale. You'll have to pay credit card processing fees and pay to host your website, but selling on someone else's site usually requires all this and giving them a cut of the profits.
Disadvantages of building your own eCommerce site
More investment in marketing. Especially if you're an unknown brand, you'll have to invest a large chunk of your profits into SEO and marketing to get people to actually visit your site. More than just money, this takes time and involves a bit of know-how in digital marketing.
Extra effort to maintain the site. While you don't have to pay a fee per sale, you still pay extra to keep your site up and running. You can expect to pay even more if you hire specialists like website developers, designers, SEO specialists, or content creators.
Best site builders for eCommerce
Take a look at Zapier's roundup of the best eCommerce website builders. They tested dozens of options, and they share the ones that came out on top.
Sell on social media
Selling on social media is a unique approach to eCommerce. While you still need an online store as your home base, your main focus will be social media marketing. Most of your customers may never even visit your actual store and instead complete transactions on social.
The most important prerequisite for selling on social media is an understanding of digital marketing. You must be able to navigate the social media landscape, with expertise that will land you ahead of the competition. Working with influencers (or being an influencer yourself) can also be a game-changer.
Keep in mind that social media selling is compatible with managing your own website or selling on some online marketplaces. In fact, social media platforms usually require you to have an existing website as a way to prove you're not a scammer. No matter where you open your online store, you should consider social media selling as a form of marketing—it's just a matter of how much of your selling you want to do there.
Advantages of selling on social media
Access people researching products. Shoppers with an intent to buy often research products on social media first. By offering products directly on social media, you can take a shortcut from "interested shoppers" to "completed purchase" in just a few clicks.
Built-in traffic. Like online marketplaces, social media sites have regular traffic by the millions. You don't have to focus on getting visitors, although you still need to worry about getting your posts seen.
Faster conversions. Each click slightly reduces the chance of a completed sale, such as going from a home page to a product page to a checkout page. Social media selling streamlines this process, allowing shoppers to go straight from posts to checkout.
Works with other sites. Even if you're hosting your own site or selling on another marketplace, you can still sell on social media to complement your main source.
Easier to find target audience. If you understand how hashtags, influencers, and groups work, you can directly target your ideal customers on social media. This is particularly alluring if you're selling niche goods that only select people would be interested in.
No extra fees. Most social media sites don't charge you for selling on there, as they rely on user-generated content. The only exception is if you want to advertise your product.
Disadvantages of selling on social media
Only works with certain platforms. Unfortunately, you can't just open up shop on any social media platform. Only a select few have checkout functionality.
Not self-contained. You can't just post a product on social media and sell it (unless you're doing it garage-sale style). Most social media sites that allow selling require you to link your account to a verified online store.
Inhibits certain marketing strategies. Using social media as your primary sales medium hinders some marketing strategies, namely SEO and search engine ads. You'll need to reorganize your campaigns to prioritize social media if that's your main focus, which can limit your options.
Best social media platforms for eCommerce
Facebook Marketplace is closer to Craigslist than Amazon, but it still has everything you need to build a credible eCommerce brand. Although Facebook doesn't have the users it once did, plenty of people around the world still use it regularly. If those people fit into your target audience, you'll find Facebook Marketplace a good way to expedite conversions.
Facebook Marketplace is simple to use: no fees or subscriptions, and you only need a Facebook account to sign up. You're free to sell new or used products, as well as handmade goods. You can also take advantage of Facebook advertising to get your products seen by the right people.
Instagram shoppable posts
If your target shoppers are on the younger side, it makes more sense to sell on Instagram instead of Facebook. Instagram's focus on visuals makes it the perfect avenue for selling fashionable items, as well as stylized products like phone cases or home decor.
Instagram Shoppable Posts allow you to "tag" buyable items in standard posts (up to five products per picture). This works great because your shoppable posts show up in people's feeds just like regular posts, creating a more organic and natural shopping experience. To use Instagram shoppable posts, you need a Facebook Marketplace store, and can only link to products sold there.
Like Instagram, Pinterest's emphasis on visuals makes it a huge boon for selling products like fashion or decor. Pinterest users often check the site to research products they want to buy, so it's a small hop from seeing your posts to completing a purchase. Plus, you can sell on Pinterest for free, although I'd recommend investing some money in Pinterest ads for marketing.
To sign up for a business account on Pinterest, you need an online store built with either Shopify or WooCommerce. Connecting with catalogs lets Pinterest upload all your product listings automatically, a nice time-saver. Just make sure you're familiar with how Pinterest works—you'll need to understand things like Rich Pins and Collection Ads. I also recommend getting your store verified through Pinterest's Verified Merchant Program.
Where should you start your online store?
No single route is inherently better than others. You'll need to consider all sorts of things:
Your business goals
Your target customers
Your personal strengths (and weaknesses)
The types of products you'll be selling
Logistical issues like shipping, storage, and product sourcing
Based on all that, decide which route makes the most sense for your business. And then get to selling.
This article was originally published in September 2016 by Matthew Guay. The most recent update was in April 2023.