Third-Party Marketplaces: Convenience vs. Cost in E-Commerce

by | Aug 21, 2024

The cannabis industry no longer carries the novelty it once did. Over a decade has passed since the initial waves of adult-use legalization, and the era of sterile, pharmaceutical-style in-person shopping is a thing of the past. As consumers seek out more sophisticated and engaging brands, the retail landscape is undergoing a significant transformation. In this evolving market, the online experience has become paramount.

Third-party marketplaces like Weedmaps and Leafly have established themselves as indispensable elements of the e-commerce ecosystem. These platforms garner substantial traffic due to their domain authority and strong search engine rankings, often surpassing the visibility of the very brands and dispensaries they showcase. While these marketplaces offer a convenient solution for both consumers and retailers, they may not always be the most cost-effective, profitable, or enjoyable approach.

Historically, self-hosted e-commerce solutions were financially and technologically out of reach for most dispensaries. However, the rise of native e-commerce menus is revolutionizing how retailers present and sell their products. These menus offer a seamless shopping experience, enhanced discoverability in search engines, and ease of implementation, presenting a compelling alternative to popular third-party solutions.

The predominant third-party dispensary menus are typically implemented via an iframe plugin. This method, reminiscent of technology from the 1990s, allows for quick integration by essentially embedding one website within another. While iframes enable rapid deployment, they also present several challenges, including limited access to transaction data and ceding control over search engine optimization (SEO) and aesthetics to the marketplace.

In contrast, native e-commerce menus keep the entire online shopping experience within a single website, fully controlled by the e-commerce merchant. Major retailers like Nike, Zara, and H&M have long utilized this structure. Native menus offer numerous advantages, including the ability to send direct links to product pages—an impossibility with iframe menus.

By coding native e-commerce menus directly into a dispensary’s website, retailers gain unfiltered access to SEO, design, user interface, and detailed analytics. From the moment a customer lands on the site to the point of purchase, the site’s owner has complete access to all data, which can be harnessed to inform and refine marketing strategies. Additionally, native menus enhance search engine visibility, allowing dispensaries to rank in search results for the products they offer, thereby driving organic traffic and attracting local consumers.

For example, when a consumer searches for terms like “cannabis near me” or “cannabis edibles,” an SEO-optimized native menu can help individual dispensaries appear in the top search results, rather than third-party marketplaces. This visibility can translate into increased foot traffic and more effective local marketing.

Beyond SEO benefits, native menus contribute to an improved and inclusive user experience. Seamless integration with a dispensary’s website fosters trust and familiarity, potentially leading to higher conversion rates. Clear site navigation ensures that all customers, regardless of their abilities, can easily browse and purchase products. Features such as clearly labeled links and URLs enhance accessibility for those using screen readers.

As the competitive landscape intensifies, more dispensaries are transitioning to native e-commerce solutions. Early adopters are reaping significant rewards, and it is likely that most dispensaries will follow suit in the near future. Take, for instance, Hennep, a recreational dispensary in Provincetown, Massachusetts. After implementing a native e-commerce menu, Hennep saw a 69.68 percent increase in organic traffic, a 104 percent improvement in conversion rates, a 145 percent rise in transactions, and a 74.3 percent boost in revenue within just a month. This shift from a third-party menu provider to an SEO-optimized native menu significantly enhanced Hennep’s online visibility and brand awareness, driving more customers to its online store.

So, should dispensaries abandon third-party marketplaces altogether? For new dispensaries with limited budgets, sticking with an iframe solution might be prudent in the short term. These solutions are easy to implement, with the third-party marketplace handling most of the maintenance at a reasonable cost. However, established retailers aiming for long-term success might find it worthwhile to invest in an SEO-optimized native e-commerce menu.

As the cannabis industry continues to evolve, operators must adapt to changing consumer behaviors, new technologies, and shifting legislation. By staying ahead of these trends and embracing innovative solutions, dispensaries can better position themselves to meet the demands of their customers and secure their place in the future of cannabis retail.