Selling on eBay vs. running a web store

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People tend to ask this question a lot. Should I sell on eBay or should I open my own web store. There is no ultimate answer to this question and it really depends on many different factors such as your budget, your niche, the amount of time you have, number of different products and so on.

This is the list of things that might help you make up your mind on what’s the best way to go for you.

  1. Can I afford myself a web store? You could build yourself a web store for free if you have some technical background but modifying it and designing it for top performance, usability and top conversion rates requires lots of experience, knowledge and consumes lots of time. There is a very good reason why  most of the online stores that sell really well are built and designed by professionals. Even the slightest changes such as color of a single button could sometimes result in 40% difference in sales. Can you afford this kind of mistakes? Can you afford yourself layout and usability mistakes? Can you afford yourself a quality team of professionals to build your website? If you can’t, you probably shouldn’t build one at all.
  2. Can I sell enough to cover my expenses? Did you calculate how much money you need to maintain your web store? How much do you need to sell monthly to cover all costs? Does that number look real to you? Do you think you could actually sell that much? Usually people would answer to this set of questions pretty simple: “How should I know how many people on the Internet are interested in the product I’m selling?”. Well, you can, if you have skills in internet marketing. There are some tools that can be used to measure the approximate search volume of any given keyword. Knowing the approximate search volume of your targeted keyword, however, will not be enough to give you any real data on which you can draw conclusions on whether or not you could sell enough. You also need to research your competitors.
  3. Can you beat your competitors? Internet is very competitive market, especially in the retail industry. Normal user will surf through several different stores offering same products and compare prices and quality. Before getting into any serious thinking about running your own web store you should ask yourself, can you beat your competition? Can you offer lower prices? Or do you offer better quality of product? If you can’t offer lower prices you should concentrate on showing your product as the quality leader and invest into branding. Can you afford branding marketing campaign?
  4. eBay will promote my products on its own, how can I promote my own web store? People will not find your products all by themselves, you will need to “show them where they are” or hire someone to do that for you. That’s what internet marketing is all about. There is a wide set of activities that can be done to increase your web store visitor count and sales. Just to mention a few of them would be search engine marketing, search engine optimization, affiliate marketing, social marketing and so on. If you can’t afford yourself to invest into these, you also probably shouldn’t have a web store. People will not appear at your “web store doorstep” all by themselves.
  5. Where can my items be cheaper, on eBay or at my own web store? You will be able to offer cheaper items at your web store since you will not have to pay commissions to eBay (which are considered painfully high by most merchants) and commissions to PayPal.

Draw your own conclusions on whether to use eBay (and similar services) or to build your very own web store.

Some of the things that eBay users most often complain about are eBay’s management, their feedback policy, the fact that small businesses get shut out, lack of communication, ebay’s payment policy, high fees resulting in lack of profitability, unwarranted account suspensions often with no explanation, the buyers themselves, some glitches and general lack of innovation. However, eBay is trying to fix all or most of these often issues it’s users have so in the near future you might expect eBay to become much more affordable place to sell your products.

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Author

Toni Anicic

E-commerce Consultant

SEO. Professional gaming. Home-brewed beer. Billiard.

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Discussion 4 Comments

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  1. We’ve spent quite a while developing a platform that helps eBay sellers to easily build their own marketplace. So, they not only have their own store for free, but they can introduce affiliate offers, content, and do all types of merchandising. The ClickRiches platform is not launched yet, but we are taking Beta signups at this time. Check it out at http://www.clickriches.com.

  2. I love ebay.com i do it for living and u guys are rong!

  3. We found it quite interesting that if you start ebay store for example you can get some sales fast, but in long term it with proper advertising and promoting your own web store can be more profitable.

  4. Dan

    Hi There-

    Came across this article/string and found it very interesting. I agree with parts of both sides of the argument. My wife and I are Powersellers on ebay (toys, novelties, hats, etc, etc) and they’ve just restructured there selling fees which worked out in our favor. However, the “small guy” whose just selling items after cleaning out their garage pays a little more. Which, to me, makes sense. The most frustrating part, to date, about ebay is their restrictive growth policy. You’re only allowed to sell a certain number of items, then you have to call in every month and “beg” for an item increase. Frustrating for people that own their own business and aren’t used to answering to anyone (except the IRS of course lol). On the other side of the argument, it’s a powerful selling format and, with some simple math, you can include your overhead (ebay fees/paypal fees, etc, etc) pretty easily. I look at eBay as one (of many) great ways to market/sell items. Right now, we sell on eBay, Amazon & eBid. We’ll be moving into a more content rich website of our own in the next year or so. I fear, however, the process will be painful (I envision data entry for weeks on end). But, worth it… once a customer signs up for an account on YOUR website they are 8 times more likely to repeat purchase. Saving the 12-15% in ebay fees is a bit of a wash for us because we understand those costs will nearly be replaced by marketing costs to acquire new customers. HOWEVER, acquiring repeat customers is priceless and VERY difficult to do on eBay. There’s my two cents. LOL

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