Accepting online payments

Advantages and disadvantages of selling through online marketplaces


An online marketplace can be a good alternative if:

  • you're looking for an online route to customers as an optional extra to your normal sales channels
  • you want to extend the number of online outlets your customers can use

An online marketplace brings together a number of online shops on the same website, often from the same sector. It hosts your online shop and processes payments for you. Examples include Amazon and eBay.

Marketplaces will often provide software to help you set up your shop and receive card payments on your behalf. You maintain and update your own shop within the market place, but most of the administration is done for you.

Many internet service providers offer online mall facilities, as do specialist companies. If you sell to a particular trade or industry, the relevant trade association may be able to put you in touch with a dedicated mall.

The Trade Association Forum (TAF) provides a directory of trade associations.

Advantages of selling through online marketplaces

Online marketplaces can be a great opportunity for some businesses, the advantages include:

  • Online shopping market places give an immediate online presence.
  • Sector-specific marketplaces can provide an effective route to your target market.
  • They allow new opportunities for overseas sales.
  • They're easy to set up for people with moderate IT skills.
  • You don't need to go through the process of setting up an internet merchant account.
  • You often get help and support in getting your store operational.

Disadvantages of selling through online marketplaces

It is worthwhile to consider the disadvantages that come with using online marketplaces for your business:

  • Online marketplaces may often be an expensive way to sell online.
  • Generally you'll have to pay a fee and a percentage of each transaction made through the marketplace - charges per transaction can be higher than processing payments yourself.
  • You may also have to pay a monthly or annual fee - charges vary substantially.
  • Your shop is often tied into a standard format.

Read further guidance on selling through online marketplaces.