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Aright Tech - Thoughts Archive

Archive of Thoughts

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Dedicated eCommerce Website, or Platform Shops?

Dedicated eCommerce Portals, or Platform shops. It is always good to choose the right eCommerce channel to list your products. The two types eCommerce shops are not conflicted. They help each other in certain ways, We share what we understand about how to make the choices.

First, we talk about Platform Shops.

In South East Asia, or East Asia, there are many matured and popular platforms. Shopee, Lazada, TikTok, Tokopedia, and Amazon, Tmall, JD, etc. etc.

Platforms enable sellers to creates shops and list their product easily, without the need to worry about server, data, payment gateways, logistics and system costings. 

Platforms also buy traffic from various sources, such as Google, Facebook, YouTube, IG, and TikTok. For sellers who buy in-platform marketing keywords, or ad positions, the cost will be slightly cheaper. Experienced sellers may also do their own FB or Google marketing to lead external traffic into their shop. That may cost quite a lot as well.

Platforms have many registered users, and those users have input their address, credit card and other information. So it is much easier for them to complete a purchase in platform shops.

However, sellers must pay high platform fees, commissions, and various other costings to platforms owners, avg abt 10% to 12% of sales amount goes to platforms. 

Platforms policy and regular update often, some updates may cause issue. For example, buyers data access is very limited now. Buyer data cannot be exported, and legally, those data belongs to platforms only. So if you want to load data into your external marketing tools, there may be some problems to do so, even those are your shop buyers.

A nutshell, shops:

Pros:

- cheaper startup cost
- easy startup process
- platform nature traffic
- ready platform buyers

Cons:

- expensive commission
- you may not own the buyer data
- shops are subject to policy and regulation updates
- less control over marketing methods

Below are two shops we run in Shopee platforms in Indonesia and Singapore.

shop_performancelisting_shopee


Now let's talk about portals.

Portals can be created by IT engineers, from open source projects or from some paid eCommerce system. Or, sellers can use Shopify or other similar service providers to create portals. Costing varies, Shopify is much cheaper, but lack of the freehand to modify shops.

The largest challenge in dedicated portals are traffic. Sellers must be very good in digital marketing, and create ads in Google & Facebook to drive traffic into the shop. This will need both money and good skills.

And It took efforts to create a good dedicate portal, in terms of products, contents, UI design, devices compatibility, payments, customer service, delivery. Usually a team of staffs stand behind a portal shop. 

But the advantage is there. No need to pay high commissions (imagine you sell luxury items in Platforms). You own all the data (extremely good if you aim for a long term business). Portals have high resell values. Sellers can customize shop and selling workflow.

And portal owners, if use FB page or WhatsApp groups, can grow a very stable private domain customers over the years. Business are much more stable than platform sellers once you build up a royal group of customers. It takes time, but it will be stable once you survive the initial period. While platform shops, they always need to fight for the sales.

So the pros and cons:

Pros:

- good for sellers with bigger visions to build something big
- own the customer data
- create more contents into portal
- selling process or workflow customization or UI customization
- good for selling expensive items

Cons:

- expensive startup fee & marketing fee
- build shop reputation
- new buyers are not so willing to fill up so many details
- not good for very small company without enough manpower

Below are two dedicate portals we run in Singapore.

vitasgxpressflower_Singapo...


Choosing between a shop or a portal depends on various factors such as the business goals, budget, target market, product range, and competitive advantage. There is no one-size-fits-all solution for ecommerce businesses. Some businesses may opt for a hybrid approach where they use both a shop and a portal to reach different segments of customers. Ultimately, the best ecommerce platform is the one that suits the business needs and helps achieve the desired outcomes.

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