How to Decide Whether to Use Ecommerce or an Online Marketplace

As an online business owner, how do you know when it's better to go with an e-commerce solution or a marketplace?

Both have their benefits and drawbacks and knowing which option is best for your brand is important.

We'll go over some of the most important factors to consider when making this decision. We'll also provide some examples of each so you can better understand what they look like in practice. Let's go ahead and break out the definitions and features of each.

Part of the guide Starting a marketplace

The Definition of an E-commerce Website

E-commerce is the act of purchasing or selling goods or services through the Internet using electronic data or money. This definition has evolved to include more specific instances of buying and selling via online platforms, e.g., Shopify, Magento, and BigCommerce.

These pre-built platforms make it easier for businesses to get their online stores up and running.

Example site Have a site like this This is how your site can look on Yclas. Pick the Reuse design or one of 100+ others, add your own domain and categories. Free for 15 days. Start from this example Second Round Market is a made-up example with demo listings, not a real business.

The Definition of a Marketplace Website

An e-commerce site that connects a variety of merchants and customers is known as an online marketplace. The marketplace owner owns the platform and helps individuals connect their products with buyers.

Companies utilize marketplaces to connect with clients interested in buying their goods and services. Amazon, eBay, and Craigslist are all examples of online marketplaces.

Benefits of E-commerce Platforms

• E-commerce websites provide considerable control of the website's functionality, navigation, and design. This means you are managing your website, from updating your logo to tweaking various design elements.
• E-commerce websites often allow for customer data collection. This allows you to save more information on customers for future marketing. Individuals can sign up for a mailing list and can typically follow you on social media.
• E-commerce websites allow you to build brand recognition. When customers put in your URL, they will be directed to your website, where they will be able to associate your products and services with that URL.
• You can develop the shopper experience you want based on your company values.

You can pretty much sell almost anything. If a consumer doesn't like something you sell, you can deal with it on your terms without the risk of being suspended or banned by the platform.

Benefits of a Using an Online Marketplace Platform

• It's easy to startup. Online marketplaces are made to be simple to navigate.
• You can create a storefront in minutes and then make use of payment processing and advertising revenue.
• You can distribute and ship channels in a fraction of the time it would take to find and register for these services on your own.
• There is little need for technical expertise or marketing resources. Unlike maintaining your website, you won't need much technical knowledge to start selling on marketplaces.
• No web server maintenance.
• Marketplaces are the best protection against hacks or outages in terms of reliability, so you can rest confident that your store will be open when your customers need to shop.
• You won't have to worry about maintaining your server or updating your plug-ins on a website. All of this takes place behind the scenes, which is one of the marketplace's advantages.

Marketplace growth, seller rules and the big platforms in 2026

This page also replaces our older posts on the differences between a marketplace and an e-commerce website, on choosing between a marketplace and an online store, and on how the two differ in ownership, control and branding.

Who controls what

Fee details worth knowing

• Amazon: most categories pay a referral fee of 8% to 15%, for example 15% for Home and Kitchen and 8% for Consumer Electronics (Amazon). On a $50 sale, a 15% referral fee costs $7.50 every time.
• Shopify: an extra 2% if you use a third-party payment provider (Shopify).
• PayPal in your own store: 3.49% + $0.49 for PayPal Checkout and 2.99% + $0.49 for cards (PayPal US, updated 1 October 2026).

The big marketplaces keep growing

Third-party sellers accounted for about 60% of Amazon's units in Q1 2026. Amazon's third-party seller services revenue, which includes commissions, fulfilment and shipping fees, was $172.2 billion in 2025, up from $156.1 billion in 2024, out of total net sales of $716.9 billion (Q4 2025 results, Q4 2024 results).

Two lessons follow. Owners change: in six years StubHub, Gmarket and Depop all changed owners, and Rakuten closed its US online shop in September 2020 (Wikipedia), so a seller who depends on one platform depends on that platform's strategy too. And the money is in services, not just listings: Amazon's seller services, Mercado Pago and eBay's advertising all earn beyond a basic sale fee.

The rules that come with hosting other sellers

If you run your own marketplace, you become the "online marketplace" in the eyes of regulators:

• United States: INFORM Consumers Act (in force since 27 June 2023). According to the FTC's guidance, marketplaces must collect and verify, within 10 days, the bank, tax ID and contact details of high-volume sellers (200 or more sales of new or unused consumer products and $5,000 or more in gross revenue in 12 months), and show buyers the contact details of sellers above $20,000 a year. Civil penalties can reach $53,088 per violation (January 2025 figure). It targets new or unused products, so a classifieds site for second-hand goods is less exposed.
• European Union: Digital Services Act, applicable to all platforms since 17 February 2024. The European Commission lists verifying and displaying sellers' contact details, an easy way to flag illegal goods, and no deceptive design. Micro and small companies have lighter requirements.
• European Union: DAC7, in force since 1 January 2023. Platforms where people sell goods, rent property or vehicles, or offer personal services must report seller income to tax authorities no later than 31 January of the following year.

If you are unsure, launch a simple classifieds-style marketplace first (listings and contact, no payments). It keeps your legal and payment set-up light while you test demand, and you should still plan from day one how you will verify sellers and handle reports.

What each option costs in 2026

Online shopping keeps growing. The US Census Bureau estimates US retail e-commerce sales at $340.2 billion in the second quarter of 2026. That is 17.1% of all retail sales, and 12.2% more than a year earlier (released 18 August 2026). The bigger question is how much of each sale you keep. Here is what the main options charge, from each company's own pricing pages in October 2026:

Example: a $50 sale (shipping and tax included). On eBay you pay 13.6% ($6.80) plus $0.40, or $7.20 in total (14.4%). On Etsy you pay $3.25 + $1.75 + $0.20, or $5.20 (10.4%), and $7.50 more if the buyer came through an Offsite Ad. In your own store you pay only card processing per sale, but you also pay the monthly plan and must find every buyer yourself.

How to choose

• Testing a new product or selling a few items a month? Use a marketplace. You pay only when you sell, and the buyers are already there.
• Selling regularly, with repeat customers or a brand? On a marketplace you keep paying around 10-15% of every sale. Once those fees are higher than the cost of a store subscription plus your marketing, your own store usually costs less. You also keep the customer's email address.
• Using both? Many sellers list on a marketplace to find new buyers, then send repeat buyers to their own store.

The third option: run the marketplace yourself

This post is about selling on a marketplace, but you can also own one. If you know a niche well, such as a trade, a hobby or a local area, you can launch a marketplace where others list their items and you earn from featured listings, paid categories or memberships. Hosted platforms such as Yclas start at $69/month ($19/month for the first 6 months on new sites under the October 2026 offer) and have a 15-day free trial. You then collect fees instead of paying them, but you also have to bring in both buyers and sellers.

These are some brief notes on whether to consider an e-commerce storefront or leverage an existing marketplace to sell your items.