How To Transition From Selling On Ebay To Running Your Own Online Store

Way back before my wife and I started our online store, we sold pretty heavily on Ebay. In a nutshell, we would import textile goods from Asia, throw up a bunch of auctions and then monitor them closely for sales.

transition
Those of you who have followed me since the beginning also know that I used to run an Craigslist/Ebay arbitrage business that made 4 figures a month at its peak.

Anyways as sales started to increase, I graduated from launching individual auctions to opening up an EBay storefront which did ok for a while, but eventually stagnated in terms of profit growth.

People often ask me whether using EBay is worth the time. And the truth is that EBay is a great place to dip your toes in the water and get used to selling online, but it’s a non-optimal place to make a lot of money in the long run.

For one thing, Ebay charges a ridiculous double digit percentage final value fee and another 2-3% for Paypal which pretty much sucks out a good portion of your profit margins with every sale.

The other reason is that EBay caters to a very specific audience. For example, I shop online a lot but I rarely shop on EBay for anything. To me, EBay is a great place to find used bargains rather than shop for new items.

If you are limiting your sales just to EBay, you are missing out on a huge piece of the market. Furthermore, I’ve found that EBay shoppers tend to be cheaper in general and are not willing to pay a premium for your goods.

The Next Logical Step

baby steps
Once you’ve extracted as much value out of EBay as possible, the next logical step is to start your own online storefront. But don’t be scared and make the same mistakes that I did.

My wife and I didn’t start our own online store for the longest time because we were afraid that we wouldn’t be able to get traffic for our own website.

But the truth is that you don’t have to stop your EBay sales cold turkey. There are logical steps that you can take in order to make the transition from an EBay shop to your own online store as smooth as possible.

And once you’ve fully made the transition, it’s up to you whether you want to still keep your EBay shop open. For my wife and I, our real online store did so much better than our EBay shop over time that we felt it wasn’t worth the inventory and administrative headaches to maintain both shops.

And while there are software services that you can purchase to help maintain coherency between your real shop and EBay, you’ll probably find that you can charge a lot more money for your goods with the online shop you own.

Making The Transition

siphon
Chances are when you first start out with your own store, you aren’t going to be attracting a lot of traffic and this is where EBay can help. Ideally, you want to siphon as much traffic away from EBay to your own web property as possible.

But be careful. If you start adding links to your own website in your auctions, you’ll eventually get banned. In general, it is against EBay’s terms of service to purposely try to lure customers away from EBay’s website.

In addition, EBay discourages any sort of transactional activity outside of its walls because they won’t make any money that way.

Your About Me Page


The first thing that you should do is to add an about me page to your EBay profile. Your “About Me” page is the only place on EBay that you can legally add a link to an outside website.

While most customers will base their purchasing decision purely on the feedback rating, sometimes they’ll also take a look at your about page. And if they see that you have your own website, they may actually click through to take a look rather than having to wait for an auction to end.

If you do manage to get them to go to your actual website, the chances of landing a sale on your own property is infinitely higher because…

  • You can provide customers with a much better shopping experience on your own website. Unlike plain old boring EBay listings, you can really make your unique value proposition shine on your own site because you have full control over the customer experience.
  • You can specifically incentivize EBay customers with bundles and discounts. Heck if you’re going to pay 12-15% in final value fees to EBay anyways, you may as well pass some of that money back to the customer
  • You can upsell them with additional products or accessories and cross sell related goods as well

Encourage Repeat Customers To Shop On Your Site

Whenever you make a sale on EBay, you want to make sure that it’s the last time that customer ever buys from you again on EBay. If they need your products again, they better go back to your site directly!

This can be accomplished by using a few tried and true tactics. First off, make sure that you include your own marketing materials in your shipment to your EBay customer.

Drop in a business card and a full brochure of your goods. Make sure that your URL is prominently displayed on the box, on the receipt….basically everywhere! There should be no signs of EBay anywhere in sight.

Then, you should drop in a coupon code that is very specific to that customer. If they come back and go directly to your storefront, give them a discount that makes shopping direct less expensive than EBay.

Remember, EBay is charging you 12-15% already. So even giving a customer 10% off still nets you a greater profit than an EBay sale. By getting a customer used to buying from you direct and then upselling and cross selling them additional items, you can easily steal away a customer and make more money in the process.

Grab Their Email Address

Once they are on your site, try to grab their email address as well. As part of your swag that you include in your product packaging, you should also include additional incentives if a customer signs up for your free newsletter.

For example, you can give them something for free or a bonus item in exchange for their information. Once you have their email address, you can then market to them directly and bypass EBay entirely.

Conclusion

Over time, you will discover that EBay is eventually going to lead to a dead end and that starting your own online store is the right answer. Most people who want to own their own site assume that it’s one or the other but it doesn’t have to be that way.

Take advantage of the sales that you are already making on EBay to promote your own web property. And hopefully over time, your own shop will take off and you can leave EBay in the dust.

After all, a 12-15% increase in profit is nothing to sneeze at. Wouldn’t you rather be pocketing that money instead of giving it away to EBay?

photo credit: bradleyolin Thomas Leth-Olsen

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6 thoughts on “How To Transition From Selling On Ebay To Running Your Own Online Store”

  1. Steve – Thanks for shortening up the E-bay learning curve by sharing your experiences and some great tips!

    1. Hey Troy,
      I was actually thinking specifically of you when I wrote this. Perhaps I’ll do a more specific video on this for the class.

  2. I used eBay in the past to get rid of some items in and around the house

    Dabbled with the idea of running a niche store, and I think I’ll get to analyze this approach later next year. I now focus on managing my niche site empire (I own about 300 aged domain names and niche blogs, mostly in the health industry)

    If you’re interested to hear more, I’d love to answer your questions…

    Best!

    1. Wow John, that is a lot of niche sites:) I don’t think I could handle that many.

  3. Great article! I’ve seen a few people make the transition described here. One gal was awesome at ebay but she had the same complaints about fees and unjustified complaints from ebayers. She did well the first year of her online store, mainly because she was aggressive at getting it done. I love to see people to take a risk in their own abilities, even if they have to hire a person to fill in the gaps.

    1. Thanks Tom, I get emails from a lot of people who are on EBay right now and are afraid to make the transition. Ultimately it’s not that big of a deal, especially if you maintain both shops for a while.

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