Why You Should Never Start an Ebay Store

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If you are going to take your online store seriously, you need to register your own domain and implement your own website. Many people who don’t consider themselves tech saavy often question their own abilities and end up relying on 3rd party sites such as Ebay, Yahoo etc… to implement their website store for them.

Let me tell you why that’s a bad idea.

Why You Should Never Start an Ebay Store

Ebay Doesn’t Have Your Interests In Mind

Ebay, like most publicly traded companies are primarily concerned with their own growth and stock price. They don’t care whether you are successful, nor do they care whether you provide a genuine service to the community. They’ll do whatever it takes to demonstrate growth and make shareholders happy.

What this means is that you are always at their mercy and they can choose to put you out of business at their own whim. Most of their changes recently have been in the form of price hikes for using their service. Let’s take a quick peek at their store pricing policy.

Final Value Fees
Price Final Value Fee
Item not sold No Fee
$1.00 – $25.00 12.00% of the closing price
$25.01 – $100.00 12.00% of the initial $25.00 ($3.00), plus 8.00% of the remaining closing value balance
$100.01 – $1,000.00 12.00% of the initial $25.00 ($3.00), plus 8.00% of the initial $25.01 – $100.00 ($6.00), plus 4.00% of the remaining closing value balance $100.01 – $1,000.00
Over $1,000.01 12.00% of the initial $25.00 ($3.00), plus 8.00% of the initial $25.01 – $100.00 ($6.00), plus 4.00% of the initial $100.01 – $1,000.00 ($36.00), plus 2.00% of the remaining closing value balance ($1,000.01-closing value)

If you were to open a store on Ebay, Ebay would take between 8-12 percent of your gross sales. Couple that with the fact that you have to use paypal for your transactions, Ebay takes between 11-15% of your revenue right off the bat. This is ridiculous!

In addition to this, you also have to pay a monthly store membership fee just for the right to get ripped off. For the past few years, Ebay’s growth has ground to a halt. You can be sure that more rate hikes will be on the horizon soon.

Ebay Stores Don’t Provide Design Flexibility

Unless you feel like paying hundreds of dollars a month, Ebay greatly limits what you can do with your Ebay storefront. They try to bundle their stores with a bunch of tools to add value, but most or all of these tools are available on the web for free already thanks to companies like Google.

To give you an idea of how restrictive an ebay store can be, the “Anchor” membership which costs $300 a month, allows you to build 15 custom webpages. Wow! 15 whole pages for $300 a month. Meanwhile, you can build unlimited pages on your own website that you host yourself.

Ebay Shoppers are Inherently Cheap

When I shop on Ebay, I shop for bargains. Especially since most of the stores on Ebay are mom and pop shops or individuals working out of their own home, I naturally expect to pay less for my merchandise.

What this means, is that you will rarely get top dollar for your items. Because you are limited by what Ebay allows you to do with your store design, the only way to differentiate yourself will be to lower your prices which will cut into your margins.

The Ebay marketplace is extremely competitive, cut throat and hard to break into.

Still Afraid to Open Your Own Store?

There are many shopping cart or online store software packages already written for you. Here are some choices.

Whatever you decide, stay away from Ebay Stores. As far as I’m concerned, Ebay is only good for getting rid of unwanted items through their auctions.

Ready To Get Serious About Starting An Online Business?

If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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101 thoughts on “Why You Should Never Start an Ebay Store”

  1. William says:

    Got to love an article that bashes ebay and then says “here, look at this free ebook and buy our online course…..”


  2. Lori says:

    I am looking forward to reading your free course.
    I am needing to find a second job.
    I have a job I love (courthouse court room clerk) but I just want to be able to get extras for my family (a lil fishing boat) or take a vacation (gasp!) And save for retirement.

  3. I was seller on ebay for as long as 5 years with more then 11000+ feedback even after this I have no Guarantee when one morning i will wake up to see eBay has suspend my account because they have so many buyer centric policies that its almost impossible to survive for long time on eBay, most important thing is from last one year due to there New policy of buyer can open dispute whenever they wish and seller get defect on his/her account after that once issue is resolve you all time run behind eBay and they will remove this dispute if they feel or if they are in mood to remove it( its not a Joke, its reality), I sell Handmade Slippers, Shoes and Wallets all made in Poland unique items and I feel that on ebay its very difficult to create a brand name for myself, I feel like I am there employee who is working under under ebay and to work for them i am also paying them monthly fees, enough is enough. 5 months ago i made a bold decision of my life to get out of this Sink hole call eBay and create my Own Identity and make website for myself call http://www.reindeerleather.com and my business is ok hope it will improve soon as i am positive about it.

  4. Russell Williams says:

    Sorry, but I disagree strongly with your logic (and no, I’m not a current Ebay store owner). You say that Ebay/Paypal are “ripping you off” by taking 11-15% of your revenue, but in fact in any business, especially the very crowded ecommerce space, as much as 20% cost-of-sales is very reasonable. Remember, Ebay gives you access to a huge potential customer pool and although most of them are looking for a bargain, if you have the right mixture of goods at reasonable prices (which you should have in ANY business), the financial logistics are actually very good. The option that’s offered in this advertorial (for that’s what it is) doesn’t account for the high cost and lengthy time cycle of driving traffic to your own ecommerce website.
    Is the author really saying that the thousands of people who currently operate Ebay stores are misguided and could do better on their own?
    Proof please?
    And I don’t mean one or two anecdotal instances where “my sister’s brother-in-law made a million dollars last year” but actual evidence from a reputable source that promotes the business case that you’re suggesting.
    I think a moch more solid strategy would be to open your own ecommerce store in tandem with an Ebay store so that as you begin to grow your customer base, you can educate them about your alternate sales channels.

    1. farah shamtoob says:

      Total crap. You can have 2,000,000. items and make good money and have all positive feedback. Then one day you wake up and boom., without advanced notice, your sore is shut down and you are stuck with 2,000,000 items.
      OK, what do you do next with 30,000 dollar merchandise ?

  5. I agree that eBay and Amazon are best market place to start your your business and to get to know which product you can sell and how buyer reacts to your your product, this are best platform to gain experince and knowledge to start your own business, however you cant make it as a long term business option, I was selling on eBay and I know how difficult it become after certain period of time, for example say you sell 600 items in a month with profit margin of around 10% after deducting 15 to 20% of eBay and paypal Final value fees( please note I have not added insertion fees in it) ok so I sell 600 items in a month out of which I got 10 item not received disputes, 10 Item not as discribe disputes, 2 negative feedback 2 Neutral feeback, on every INR, negative, neutral and god know what more things (item not received dispute) ebay give you defect and in paticular month your defects should not exceed more then 5% I can go indepth of it however it will take my whole day and night to explain in detail, My point is ,Yes sells volumn is very high however my profit after all this is only 5% ( I didnt include my work force and other things in it), Ok some sellers can bare with this too as sell volumn is very high on market place, however what is guarantee that I will be not out of business next morning i wake up, beleive me while selling on eBay i had sleepless nights all time near PC waiting to check and praying please no buyer open dispute today or leave me bad feedback because today there mood is bad.
    I left my job and started selling on ebay thinking I will be my own boss, however one morning I find that still I am employee of ebay difference is I am paying them for working under them as well as I dont know when they will kick me out and I will be without business.I didnt have my own identity on eBay what so ever.
    Now I have my own website and I have peace of mind,my buyers recognize me as Owner of http://www.Reindeerleather.com and I can explore my creativity which I was not able to do on eBay or on amazon, now i can give that 15% ebay and paypal fees to buyers in terms of discount, why everyone of us have to be in that virtual black hole when we can easily get out of it, we need to work hard and be little creative to make our own identity which will help in long run, eBay and Amazon will lead us nowhere, you never know what policy of there you will voilate and one good morning you wake up to see that you are back to square one again and everything is gone,I am sorry however I really dont support selling on market place if you are serious about your business make your own website its difficult but not impossible, if you are selling as part time eBay is best place to sell your Stuff.

    1. Jamie rau says:

      Im always amazed how people like to explain how this is bad or that, didnt you do any research have any business experience , you think ebay is bad , have a idiot post a false comment on a google review or yelp etc on a standing store , it can be devistating, . Its all the same you cant get away from it reviews and reviews its the future. And to the guy above with his 5 percent profit margin , try having a store , insurance business lic , etc plus pay employees , workmans. Comp , power should i go on , ebay dosent sound that bad now . Ebay is a good start and the big successful people on there have a web sight , and a store . Sorry life isnt easy so study your market , your customers /demographics and keep positive people around you , if it was easy everyone would do it . Go for it , for every person having a issue ,theres 100s that do well that goes for any business . Start small stay focused and grow as you get sales , but always have a growth plan , it isnt dreaming its called being positive and diaciplined. But hey thats jus my opinion lol

  6. Divine says:

    Not dating articles is dirty and scummy as hell.

  7. There’s been a recent flood of small former ebay sellers over to two new sites, Toucandeal and Vangoe.com…Vangoe offers stores, both sites are free to list and are growing rapidly.

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