Selling Digital Products on Your Own Website vs. Marketplaces

Introduction

Selling Digital Products: Should You Build Your Own Website or Use Marketplaces?

Choosing the right platform for selling digital products can make or break your business.

Do you want complete control over your brand and profits, or are you willing to sacrifice some of that for instant exposure to a massive customer base?

This article dives straight into the pros, cons, and key differences between selling on your own website and using marketplaces, so you can confidently decide what’s best for your goals.

Let’s break it down.

KEY TAKEAWAYS

Marketplaces are ideal for beginners seeking quick visibility.
They provide access to a ready-made audience, simplifying the process of selling digital products without requiring technical skills. However, high fees, limited branding control, and policy restrictions can impact long-term growth and profits.

Owning a website offers unmatched control and scalability.
With your own site, you control branding, pricing, and customer interactions while retaining all profits. Though it requires effort to drive traffic and manage technical aspects, it allows you to build a strong, independent brand.

Traffic generation is a key challenge for website owners.
Unlike marketplaces, your website depends on strategies like SEO, content marketing, and paid ads to attract visitors. Building a loyal audience takes time but can lead to more sustainable growth and higher customer retention.

Combining marketplaces and your own website can be a powerful strategy.
Marketplaces help you gain initial traction and exposure while your website builds brand loyalty and profit margins. Directing satisfied marketplace customers to your website can create a seamless hybrid approach for maximum growth.

Product type and target audience influence the platform choice.
Marketplaces work well for mass-market digital products like printables, while niche or premium items often benefit from personalized websites. Align your platform with your audience’s preferences and expectations for better engagement and sales.

Costs and resources determine the right starting point.
Marketplaces have lower upfront costs but ongoing fees, while websites require investment in hosting, design, and marketing tools. Assess your budget and technical skills to decide which platform suits your immediate and future needs.

Introduction to Selling Digital Products: Own Website vs. Marketplaces

The digital products industry is booming, offering endless opportunities for creators and entrepreneurs.

Whether you sell e-books, templates, online courses, or software, one of the first and most critical decisions you’ll face is choosing the right sales channel: your own website or an established marketplace.

This choice is not just about where your products will be available—it directly impacts your business’s scalability, profit margins, and branding.

Overview of Digital Product Sales Channels

Digital product sales channels fall into two broad categories: selling through your own website or leveraging third-party marketplaces.

• Your Own Website: This involves creating a dedicated online store where you control everything—from branding and user experience to pricing and marketing, giving you the freedom to explore scalable strategies as outlined in how to build a scalable business with digital products. Platforms like Shopify, WooCommerce, or Webflow allow you to set up professional, functional websites tailored to your business needs.

• Marketplaces: Third-party platforms such as Etsy, Amazon, or Gumroad are pre-built ecosystems where sellers list products to access a large, established customer base, making them ideal for beginners looking to start selling digital products quickly. They handle many aspects of selling, including hosting, payment processing, and customer support policies.

Each channel offers unique advantages and challenges, and understanding these will help you align your choice with your business goals.

For a deeper insight into the advantages and disadvantages of selling on marketplaces versus your own website, consider the following video:

Importance of Choosing the Right Platform for Your Business

The platform you choose directly impacts your success in several ways, from your profit margins to how customers perceive your brand.

Exploring the benefits of selling digital products can provide further insights into this decision.

Let’s break down the key considerations:

1. Control Over Branding and User Experience

Owning a website gives you total control over your brand identity. You can design a unique storefront, craft a tailored shopping experience, and establish credibility.

In contrast, marketplaces impose their branding, which may overshadow yours.

For example, selling an online course on your website allows you to design custom landing pages and upsell related products, whereas marketplaces limit these capabilities.

2. Profit Margins and Costs

Marketplaces typically charge fees or commissions, which can eat into your profits,  making it essential to understand top mistakes to avoid when launching digital products that could further reduce your margins.

For instance, Etsy takes a 6.5% transaction fee plus additional charges for payment processing and advertising.

On the other hand, while your website may require upfront investment for hosting, design, and marketing tools, you keep 100% of your sales revenue.

3. Audience Access and Traffic

Marketplaces attract high traffic, making them ideal for sellers who lack an existing audience.

However, this comes with intense competition and the challenge of standing out. A website requires effort to drive traffic, often through content marketing, SEO, or paid ads, but it allows you to build a loyal customer base over time.

4. Scalability and Long-Term Growth

If you envision scaling your business, having a dedicated website offers flexibility. You can integrate advanced features like membership subscriptions or analytics tools to optimize and grow.

Marketplaces, while convenient initially, may limit your options as your needs evolve.

Choosing between selling on your website or using a marketplace isn’t just about convenience; it’s about aligning with your goals, resources, and vision for growth.

With a clear understanding of what each channel offers, you can make an informed decision that sets your business up for success.

Pros and Cons of Selling Digital Products on Marketplaces

Marketplaces have become a go-to choice for digital creators due to their simplicity and access to a vast audience.

However, the decision to rely on a marketplace should consider both its strengths and limitations.

Below is a breakdown of the primary advantages and challenges of selling digital products on these platforms.

Advantages of Marketplaces

1. Access to a Large, Built-In Customer Base

Marketplaces are hubs for millions of active buyers. For instance, platforms like Etsy and Gumroad attract users specifically looking for digital products like printables, e-books, or software.

This ready-made audience means you can start earning revenue without the need to first build your own customer base.

For creators without an established following, this can drastically reduce the time it takes to generate sales.

2 Simplified Setup and Reduced Technical Requirements

Selling on marketplaces requires minimal technical expertise. They handle everything from payment processing and product hosting to customer service tools, enabling sellers to focus on their products.

For example, Gumroad allows creators to upload their digital products and list them for sale within minutes, with no need to manage web hosting or coding.

3. Established Trust and Credibility

Buyers are often more comfortable purchasing from well-known marketplaces due to the trust these platforms have built.

Sites like Amazon and Etsy offer buyer protections, making customers feel secure about their purchases.

As a seller, you benefit from this built-in trust, which can make it easier to convert first-time buyers.

4. Built-in Marketing Features

Marketplaces often offer tools to promote your products. Etsy, for example, allows sellers to participate in its advertising program to boost product visibility.

Many platforms also recommend products to users based on their browsing history, giving your listings more exposure without additional marketing costs.

Disadvantages of Marketplaces

1. High Fees and Commissions

While marketplaces simplify selling, their convenience comes at a cost. Platforms often charge listing fees, transaction fees, and commissions, which can significantly reduce profit margins.

Etsy, for instance, charges a 6.5% transaction fee plus a payment processing fee. For creators selling lower-cost digital products, these fees can quickly add up, making it harder to scale profitably.

2. Limited Control Over Branding

On a marketplace, your brand is secondary to the platform. The design, layout, and user experience are dictated by the marketplace, limiting your ability to showcase your unique identity.

This can be particularly challenging for creators looking to establish a strong, recognizable brand presence.

3. Dependency on Marketplace Policies

Selling on a marketplace means adhering to their rules, which can change at any time. For instance, algorithm updates can impact the visibility of your products, or new fees may cut into your earnings.

This dependency creates a risk for sellers who rely solely on one platform for income.

4. High Competition

Marketplaces are crowded with sellers offering similar products, making it challenging to stand out. Buyers often compare products based on price, which can lead to a race to the bottom for pricing.

For example, if you sell digital planners on Etsy, you’ll be competing against thousands of other sellers, many offering heavily discounted products.

By understanding these advantages and disadvantages, sellers can strategically decide if a marketplace aligns with their business goals or whether it’s worth investing in alternative sales channels.

Pros and Cons of Selling Digital Products on Your Own Website

Selling digital products on your own website offers unmatched flexibility and control, but it also requires a more hands-on approach.

Below, we delve into the advantages and disadvantages of this method, providing actionable insights to help you make an informed decision.

Advantages of Selling Digital Products on Your Own Website

1. Complete Control Over Branding and Customization

Owning your website allows you to fully design the customer experience. From custom logos and color schemes to personalized product pages and checkout processes, your brand stands out on its own.

Unlike marketplaces, where the platform's branding takes center stage, your website showcases your unique identity.

For example, creators using Shopify can integrate apps for tailored user experiences, such as upselling or post-purchase surveys, enhancing customer retention.

2. Retention of Full Profits Without Marketplace Fees

One of the most appealing benefits of selling through your website is the absence of marketplace commissions or transaction fees.

While you may incur costs for hosting and payment processing (e.g., Stripe or PayPal), these are often lower than the cumulative fees charged by marketplaces.

This model is particularly advantageous for sellers of high-ticket digital products, such as online courses or advanced software, where margins play a crucial role in profitability.

3. Direct Access to Customer Data for Personalized Marketing

Owning your website gives you full access to customer information, such as email addresses, purchase history, and preferences. This data is invaluable for creating personalized marketing campaigns.

For example, using tools like Klaviyo or Mailchimp, sellers can segment their audience and send targeted email sequences to upsell products or recover abandoned carts.

This level of direct engagement fosters customer loyalty and drives repeat sales.

Disadvantages of Selling Digital Products on Your Own Website

1. Responsibility for Driving Traffic and Marketing Efforts

Without the built-in audience of a marketplace, driving traffic to your website falls squarely on your shoulders, which is why understanding how to drive traffic using Pinterest can be invaluable.

This often requires a combination of strategies such as content marketing, SEO for digital products, social media advertising, and email campaigns.

For example, ranking for long-tail keywords like "how to design digital planners for sale" requires a consistent content strategy and may take months to see results.

Beginners often face a steep learning curve or need to invest in professional marketing services.

2. Higher Initial Setup Costs and Ongoing Maintenance

Creating a professional website involves upfront expenses for domain registration, hosting, design, and necessary tools like analytics or email marketing platforms.

While platforms like WordPress or Shopify offer affordable plans, add-ons like premium themes or plugins can quickly increase costs, which is why bundling services to increase sales with digital product bundles can offset initial expenses.

Additionally, maintaining the site—ensuring it runs smoothly, updating content, and safeguarding against security breaches—requires consistent effort.

3. Need for Technical Expertise or Investment in Professional Services

While website builders simplify the process, technical challenges still arise, such as integrating payment gateways or optimizing site performance.

Creators who lack technical expertise may need to hire developers, which adds to the overall cost.

For example, optimizing page load speed—a critical factor for user experience and SEO—often requires advanced knowledge or professional intervention.

Selling digital products on your own website demands more effort and investment than marketplaces but offers unparalleled control, higher profit potential, and the ability to build a lasting brand.

These factors make it an appealing choice for entrepreneurs looking to establish a long-term digital product business.

Key Differences Between Selling Digital Products on Marketplaces and Your Own Website

When deciding between selling digital products on marketplaces or your own website, understanding the core differences is crucial.

Each option offers distinct advantages and challenges, and these differences can influence your control, branding, and revenue strategy.

For additional perspectives, this resource on the advantages and disadvantages of using online marketplaces offers valuable information.

Here’s a closer look at the key aspects to consider.

Ownership and Control

Marketplaces come with pre-set rules and limitations. While they streamline selling by handling technical and operational aspects like hosting, payments, and customer service, they also limit your control.

For example, marketplaces dictate product display formats, pricing strategies, and return policies, leaving little room for customization.

If the platform changes its policies—such as increasing fees or restricting product categories—you have no choice but to adapt or leave.

By contrast, selling through your own website provides full autonomy.

You control every aspect, from site design and product presentation to pricing and customer interactions. This flexibility allows you to align your operations with your brand values and long-term goals.

For instance, a business selling premium online courses can create a tailored checkout experience with upsell options, subscription plans, or bundled deals—features that marketplaces rarely support.

Traffic and Audience Engagement

One of the biggest draws of marketplaces is their built-in traffic. Platforms like Etsy or Amazon attract millions of potential buyers daily, providing sellers with immediate visibility.

This is especially beneficial for beginners who lack an established audience.

However, relying on marketplace traffic also means competing with countless other sellers, often leading to price wars or difficulty standing out.

With your own website, driving traffic requires effort and strategy. You’ll need to invest in search engine optimization (SEO), content marketing, social media promotion, or paid ads to attract visitors.

While this is more labor-intensive, it also allows you to build a dedicated audience.

For example, using tools like Google Analytics, you can monitor user behavior and refine your approach to improve engagement and conversions. Over time, this self-sustained traffic provides greater reliability and independence.

Marketing and Brand Recognition

Marketplaces prioritize their branding over yours. Customers are more likely to associate their purchase with the platform rather than your brand.

This limits your ability to establish a unique identity and build long-term relationships with customers.

For instance, if someone buys a digital planner on Etsy, they may remember Etsy, not the individual seller.

Your website, however, is a blank canvas for branding. From a custom domain name to personalized email campaigns, every element reinforces your identity.

You can create an ecosystem where customers interact with your brand at every touchpoint, fostering loyalty and repeat business.

For example, incorporating email marketing tools like Mailchimp enables you to share updates, promotions, and new product launches directly with your audience, something marketplaces don’t support.

Understanding these differences helps entrepreneurs align their sales strategy with their goals. If short-term convenience and exposure are priorities, marketplaces may be the way to go.

However, for long-term growth, brand recognition, and revenue control, investing in your own website is often the superior choice.

Factors to Consider When Choosing Between Marketplaces and Your Own Website for Selling Digital Products

Choosing the right platform for selling digital products is a strategic decision that depends on several factors.

Each business has unique needs, and understanding how these elements align with the capabilities of marketplaces or your own website can lead to more informed and effective decisions.

Business Goals and Resources

Your business goals should be the foundation of your decision. For creators seeking immediate sales with minimal effort, marketplaces offer a quick-start option.

Platforms like Gumroad and Etsy eliminate the need for technical expertise, making them ideal for those with limited time or resources.

However, this convenience often comes with higher fees and less control over branding.

For businesses focused on long-term growth and brand building, owning a website is often the better choice, especially when implementing strategies like those shared in our sales funnel guide for digital products.

A self-hosted platform allows you to create a scalable foundation for your business, with complete control over branding, pricing, and customer data.

For instance, if your goal is to develop a subscription-based digital product, tools like MemberPress on WordPress or Shopify can help you create a seamless recurring revenue model.

Assessing resources is equally important. While marketplaces require less upfront investment, your own website might demand expenses for hosting, design, and marketing.

Entrepreneurs with limited budgets can start small using affordable platforms like Wix or Squarespace and scale their website as their business grows.

Target Audience and Product Type

Understanding your audience’s behavior is critical when choosing a platform. If your customers are already active on marketplaces, listing your products there can provide instant visibility.

For example, Etsy is popular for printable planners, templates, and digital art, making it a strong choice for creators in those niches.

In contrast, if your target audience values a premium or personalized experience, your own website can cater to their preferences.

High-ticket digital products like online courses or exclusive software often benefit from a more polished presentation, which is easier to achieve on a dedicated website.

Additionally, your website allows you to tailor the customer journey, from educational blog content to product upsells, creating a more engaging experience.

Scalability and Growth Potential

Scalability is a significant consideration for entrepreneurs with long-term plans. Marketplaces, while convenient, can restrict growth due to their rigid structures.

For example, many platforms limit the ability to create bundled offers or subscription plans, which can cap your revenue potential.

On the other hand, a website provides endless opportunities for growth. With the right tools, you can expand your offerings, integrate advanced analytics, and implement marketing automations.

For instance, platforms like Kajabi or Teachable allow creators to manage multiple product types—such as courses, memberships, and coaching—under one roof.

Additionally, integrating customer relationship management (CRM) systems enables businesses to nurture leads and scale operations effectively.

Ultimately, choosing between a marketplace and your own website depends on your goals, audience, and resources.

For those looking for convenience and immediate access to customers, marketplaces are a great starting point.

However, entrepreneurs with growth ambitions and a focus on branding will find greater opportunities in building their own online presence. 

Conclusion - Selling Digital Products on Your Own Website vs. Marketplaces

Choosing between selling digital products on your website or through marketplaces depends on your goals and resources.

Marketplaces offer simplicity and quick access to large audiences, making them great for beginners. However, they limit branding, charge fees, and impose policy restrictions.

Your own website provides complete control, higher profit margins, and scalability, but it requires more effort to drive traffic and maintain.

For creators focused on long-term growth and brand loyalty, investing in a website is often the better choice.

Consider starting with marketplaces to gain momentum before transitioning to your own platform for maximum flexibility and growth potential.

Thanks for reading,

The DigyKeys Team

Frequently Asked Questions (FAQs)

What are the key benefits of selling digital products on marketplaces?

Marketplaces offer access to a built-in audience, making it easier to start selling without needing to attract your own traffic. They simplify the selling process by handling hosting, payment processing, and customer service. Additionally, these platforms have established trust with buyers, which can help convert hesitant customers, especially if you’re just starting out.

How can I stand out on a crowded marketplace?

Standing out requires a strong focus on product presentation and differentiation. Use high-quality visuals, detailed and persuasive product descriptions, and customer reviews to build credibility. Leverage the marketplace’s promotional tools, such as paid ads or featured listings, and optimize your product titles and tags with keywords your audience is searching for.

What are the main challenges of selling on my own website?

The primary challenges include driving traffic, managing the technical aspects of maintaining a website, and investing in marketing to attract and retain customers. Unlike marketplaces, you don’t have access to a built-in audience, so you'll need to create and execute strategies like SEO, social media marketing, and paid ads to grow your visibility.

How can I drive traffic to my website for selling digital products?

Driving traffic requires a combination of strategies. Start with search engine optimization (SEO) to attract organic visitors. Create valuable content such as blogs, tutorials, or videos that target your niche audience. Use social media platforms to promote your products and consider running paid ads to quickly reach potential customers. Building an email list and sending regular updates can also help retain and convert visitors.

Which platform is better for scaling a digital product business?

Your own website is often better for scaling because it offers flexibility and control over pricing, marketing, and customer data. You can integrate advanced tools like analytics, membership systems, or subscription models. While marketplaces are excellent for short-term exposure, their limited customization options and fees can hinder long-term scalability.

Can I use both marketplaces and my own website to sell digital products?

Yes, combining both approaches can be a strategic move. Use marketplaces to build initial traction and gain visibility while directing satisfied customers to your website for future purchases. This hybrid model allows you to benefit from marketplace traffic while building your own brand and audience over time.

How do I decide between selling on a marketplace or my own website?

Consider your goals, resources, and target audience. If you’re starting out and need quick access to a ready-made audience, a marketplace may be the better choice. If your focus is on long-term growth, brand recognition, and profit maximization, investing in your own website will provide greater rewards in the long run.

What are the costs involved in setting up a website for digital products?

Costs typically include domain registration, website hosting, design, and tools for payments or marketing. Platforms like WordPress or Shopify offer affordable plans, but additional features like premium themes, plugins, or professional design services may increase your expenses.

Are there specific tools that make selling digital products on my website easier?

Yes, tools like Shopify, WooCommerce, and WordPress plugins such as Easy Digital Downloads or MemberPress are designed for selling digital products. They simplify product management, payment processing, and customer interactions. Email marketing tools like Mailchimp or ConvertKit can help you nurture leads and automate marketing efforts.

Is it possible to transition from a marketplace to my own website later?

Absolutely. Many creators start on marketplaces to gain exposure and test their product ideas, then transition to their own website to build their brand and maximize profits. Collect customer email addresses and build a loyal audience to make this transition smoother.