Pros & negatives of selling digital items through marketplaces such as Etsy & Udemy |
Should you sell digital products on a marketplace or your own site? Discover the pros and cons of both approaches and determine the best option for your needs.
Being a frequent online buyer and frequent online shopper, I enjoy online marketplaces such as Etsy as well as Amazon. The product options are endless, and in just a few clicks, I can purchase exactly what I'm looking for.
Even though this shopping online habit can be detrimental to my bank account, the availability and accessibility of sites like Amazon as well as other marketplaces where nearly anyone can list their products -- are great for entrepreneurs.
It's a good idea to entrepreneurs who sell physical goods.
On first sight, the idea of selling digital products via a marketplace, instead of the website you have created may seem as if it's a no-brainer. The technical work is done for you -- all you have to upload your digital content and start making money, right?
It's not exactly. If you're trying to build an online business, marketplaces are not without certain limitations.
And selling digital downloads from your site does not have to be as technically tricky as you imagine.
In this piece we'll go over the pros and cons of selling on a digital marketplace vs. your personal website. We'll also discuss what platforms can help you sell from your website a snap.
But first, let's start by learning the basics.
What is a digital marketplace?
Digital marketplaces are ecommerce website where multiple sellers may list their goods for sale.
Digital marketplaces make online shopping effortless and easy for customers. Whatever your interest is, you'll likely find a marketplace which caters to your needs.
Products on marketplaces include:
Physical goods like apparel cosmetics, jewelry, electronic items
Digital content such as online courses, ebooks, and printables
Services like coaching, consulting as well as accounting
If it is able to be purchased online, you can find it on a digital marketplace.
The online marketplaces play a significant part in the online shopping. Consumers were able to spend $2.67 trillion in the 100 most popular marketplaces on the internet in 2020.
Some of the most popular ecommerce marketplaces include:
eBay (over 891 million users in just six months)
Etsy (over 380 million users in just the span of six months)
Walmart (over 474 million customers in just 6 months)
Then, of the course Amazon (over 2.7 billion visitors in 6 months)
It is possible to sell physical and digital goods through all these platforms. But there are also markets that specialize in digital products.
As an example, Udemy is an online course marketplace that offers more than 150,000 classes online from an array of instructors.
Marketplaces like Etsy and Udemy are great for those seeking convenience and endless choices of goods.
However, for creatives the process isn't as simple. Getting set up and selling on marketplaces can be a hassle.
Although the procedure varies among markets, it generally works as follows:
Set up a seller account
Charge a fee for listing the products (sometimes together with a monthly cost)
Make sure to list your items
You could be required to pay transaction fees (on on top of the payment gateway charges)
Keep an eye out for comments from customers
Get paid on the market's schedule
Hope for the best
Yikes.
The good news is that it's not all bad though. While you'll need to cooperate to a system that is run by someone else and rules (more on this later on -- there are some real advantages to selling your digital products through a marketplace.
Advantages to selling digital products in the marketplace
Listing your products in a marketplace will allow you to reach more prospective customers. Most likely, your ideal customers are already shopping on these sites. What better way to meet them than where they are?
As an example, Amazon boasts over 300 million customers and more than $125 billion of sales revenues during the fourth quarter of 2020.
When you offer your digital products through a marketplace, you're getting built-in visitors. Marketplaces allow your customers to visit your site and not have look them up and bring traffic to your site.
Products that are most well-known and popular get the top spot in the search results It's difficult to get a brand new item in the eyes of a lot of consumers if you're not putting your own marketing efforts behind it.
For example, there are more than 3.7 million printables to purchases on Etsy .
Another benefit to selling digital items on a marketplace is the ability to piggyback off of customers' existing trust on that market.
A majority of people believe that trust is a major factor when making purchase choices. And shoppers trust major online marketplaces. 99% of buyers say they're more likely to buy products through Amazon than other ecommerce sites.
This trust is especially important when you run a small or new brand. 53.4% of shoppers prefer to test a brand they haven't heard of Amazon Amazon rather than other websites.
When a happy customer leaves reviews on your product listing, it can increase your brand's credibility.
92% customers look up testimonials and reviews prior to making a purchase as well as 72% of consumers say that positive testimonials and reviews boost their confidence when it comes to a company.
Many marketplaces have built-in system for customer reviews, including this one from Udemy:
However, selling your products through an online marketplace has its number of disadvantages, too. Let's talk through them.
Disadvantages to selling digital products in a marketplace
The biggest downside for selling digital items through a marketplace are the cost.
Charges could comprise:
Transaction fees that are standard by your processor
Fees for Marketplace listings or monthly charges
Fees for transactions from the market
For example, Etsy charges sellers:
A $0.20 listing cost
A 5% transaction fee, plus a payment processing fee
15% offsite ads fee for advertisements that Etsy post that are not under your control
and Etsy is on the lower (and more simple) side of the price range.
On Udemy, creators receive 90% of the revenue when a student purchases their course -- but only when they utilize an instructor's coupon or referral link. If sales aren't made by way of an instructor's promo and the creator earns just 37% of revenue from the sales.
How do complex fees hurt digital product creators?
Imagine that you're offering an ebook for $9.99.
The seller pays the $0.99 listing fee and receive 10 orders. In addition to the payment processor and marketplace transaction fees, your earnings on each transaction could end up looking like this:
$9.40 before payment gateway fees
$7.90 after marketplace transaction fees
The ten sales you made on your ebook brought in $98.91 after the listing fee and your profit per sale is $79.00 (or even less in the event that you must pay a monthly fee).
What's more the majority of marketplaces pay sellers in a specific timeframe and you might need to wait for a long time for your earnings. Udemy's intricate payout structure is that its creators get paid once every month "premium instructors" aren't payed until the third month of revenue.
One final downside to selling through a marketplace is the lack of the visibility of your brand.
However, in a market it is rare for people to search out a specific seller. They instead look for the lowest prices and the highest reviews. There's no way that sellers can use to tailor their websites, create their brand's recognition and distinguish themselves from the rest.
You also don't get access to your customers' contact information and this makes it difficult for you to build a long-term relationship with would-be loyal clients.
In other words, a marketplace is not an ideal place for your business to stand out. It takes five to seven impressions before people recognize the brand name, getting recognition on a marketplace can be an uphill battle.
Phew.
If the negatives listed above make you want to run to the mountains Don't fret. There are many options to sell on a marketplace that don't take hours of programming.
Let's discuss them.
Sell digital items on your own website
If you are looking to market digital products outside of a marketplace, you have two main options:
Sell and build your own site
Make use of an all-in-one solution like
1. Create your own site
The WordPress plugin directory is currently home to more than 58,000 plugins. Plugins allow you to add more capabilities and functions on your site such as shopping carts and SEO tools.
Additionally, you can choose from a variety of templates and themes that allow you to completely customize your site in line with your branding.
Naturally, along with the powerful website building power comes an enormous responsibility.
If you're looking to build an online store to sell digital products, WordPress has a pretty difficult learning curve, which makes it difficult to get grasp of for novice creators.
WordPress uses shortcodes as which is a kind of markup that lets you type in a quick instruction on the backend to enable different features for the front end.
A few themes and plugins utilize their own shortcodes. This can make things more complicated. When you've built entire pages with shortcodes it can take hours to install a new plugin or theme and remove your code.
In addition, there's no drag-and-drop feature when building your site from scratch. If you're planning to modify your site, you'll need some coding know-how in your pocket.
In addition, if your code isn't efficient, it may slow down your load time or render your site unusable with mobile devices.
The slow loading time of your website could be a problem for your business's revenue. 26.9% of ecommerce customers are waiting less than four seconds for a page to load while 45.4 percent of customers reported that they were less likely to buy things if loading speeds were slower than expected.
Even if you do all the right things on your end, selling digital products on your website requires several plugins and they may (and can) fail when your CMS updates.
Last but not least not least, the costs of building your own site can rack up quickly.
If we assume that you're employing WordPress because it's the most used platform.
In order to make use of WooCommerce Paid Courses, you also have to set up an WordPress LMS plugin Sensei LMS that includes its own collection of premium extensions.
As I mentioned, it is possible to accumulate rapidly..
However, if you're comfortable with technical aspects and fielding some high startup costs, building your own website gives you a level of flexibility and control that you can't get elsewhere.
In the case of many small business owners, it's not possible to have the resources or time to begin from scratch. Therefore, if you'd like to start your journey without the hassle of learning technical terms, keep reading for ways to make the process much easier.
2. Use an all-in-one platform like
I'm definitely biased, but I believe this is the ideal choice for creators seeking to sell digital items online.
has all of the tools that you require to build an online presence and market your items without the technical headaches associated with WordPress or the complicated charges of the marketplace.
If you are selling digital downloads using Stripe the payment method of Stripe or PayPal with no transaction fee on all paid plans (beyond the unavoidable processing fees). You own everything including your email address and your website, to all of your digital downloads and data. Everything is on one central platform.
What else makes a top-notch product for creators?
You get all of advantages of having your own web page to sell your digital downloads. This includes an individual domain name, and with no technical hassle.
It is possible to host, market and sell digital goods, online courses, and website memberships from one platform that allows unlimited digital file uploads on all paid plans.
In addition, the free plan includes a website, online community, one digital download, and one product for coaching. Sign up for free today .
It takes just a few clicks to sell digital products on your website.
When you've uploaded an electronic download you are able to make installment plans, set up onsells, create an image on social media to promote your product, modify your sales page, promote your download by email and much more and all via the dashboard.
Marketplaces vs. websites: Who is supreme?
Then, what's the final word? Do you want to sell your digital items on a marketplace or your own site?
Much like the other aspects of building a business It all comes down to the requirements of your business. This is a brief overview of the ways that both choices stack up:
Marketplaces on the internet are great to shoppers, but the procedures and charges associated with registering as a seller can be expensive and complicated.
Benefits of selling products on marketplaces include greater coverage, greater trust among consumers as well as built-in reviews.
However there are disadvantages to selling on a marketplace include the high cost of fees, frequent payouts in addition to a low level of name recognition.
If you choose to build your own website, you have limitless choices for personalization and control over your user experience. This level of control can create an enormous amount of technical burden particularly if something goes wrong.
A platform that is all-in-one provides you with the very ideal of both worlds when it comes to making digital downloads available, selling online courses, membership sites, and webinars.
If selling from your own website is the most appealing choice for you -- and you don't relish the idea of digging deep into WordPress codes, it could be the perfect solution for you. We're always available and we're eager to assist you on your business journey.