Follow On TwitterWhy You Should Never Start an Ebay Store
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.
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 2008 Ebay 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. Some are free and some cost money and I will write more about them in a future post. 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.
Did you like this article? There are many more articles like this on entrepreneurship, kids and money and how to open an online business on this website. Read about our journey how we went from earning 0 to 100 thousand dollars in 12 months with our online business. Looking for some laughs? Read about some of our crazy customer stories.
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Why You Should Never Start an Ebay Store | MyWifeQuitHerJob.com…
If you want to open an online store or business, this article explains why Ebay is absolutely the wrong path to take….
[...] we don’t recommend opening an Ebay store, we do think that selling on Ebay is worthwhile in the early stages of your online business. This [...]
Thanks for the heads up. I am planning on selling some items on ebay for the first time and eventually I would like to open up my own online shopping store. Hopefully, I can get some pointers from this site (http://mywifequitherjob.com) on how to start.
Thanks
P.S. I am loving this site. I usually do not engage online, but I may just have to start:)
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