In a world in which e-commerce has become a necessity for nearly every retailer, it can seem they have only two options: list their goods on marketplaces run by giant companies, or sell to consumers directly, hoping they’ll make more on each transaction despite fewer sales. In other words, either join a dominant marketplace like eBay , Walmart or Amazon —which by itself represents 38% of U.S. online sales, according to Digital Commerce 360—or hope they can find customers through advertising and word of mouth.
For many small- and medium-size sellers, a third option has emerged, embodied by the rising star of e-commerce, Shopify . This approach gives merchants access to cloud-based third-party services such as payments and fulfillment, but lets them maintain more control of their branding and customer relationships than the biggest marketplaces offer. Shoppers might not even know they’re buying something from a Shopify-powered retailer, and that’s the point.
In addition to making goods available on sellers’ own sites, these software companies—which also include BigCommerce and Magento—can perform the laborious task of listing merchandise on the giants’ marketplaces. By becoming hubs for managing sales through multiple channels, including social-media platforms, they represent real competition for Amazon and its ilk, potentially giving merchants more leverage when dealing with those entrenched giants.
This increasing competition is forcing Amazon to acquire or build its own services for creating stores outside its marketplace.
While merchants have more options, there’s also more complexity in navigating the platforms of this growing roster of tech companies. Despite growing competition for sellers’ business, they often remain at the mercy of decisions made by giants.