Follow On TwitterWhy You Should Never Start an Ebay Store
BizSugar
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.
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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:)
[...] Similar PostsWhy You Should Never Start an Ebay Store [...]
I agree with what you’ve mentioned but selling on ebay also has advantages. Ebay attracts a lot of buyers therefore it saves you money on getting traffic to your products. Having your own domain will require a lot of promotion which is very time consuming and costly too.
The only advantage (which is a huge one) to selling on
Ebay is the traffic. Furthermore, I don’t even think it’s an advantage, considering the fees and the low end buyers.
For those who sell on Ebay and do not have an Ebay Store, Ebay has now taken their greed even further by charging 11% of the shipping cost.
Capitalism, get use to it or move to North Korea.
I appreciate this post and am taking it to heart. I am looking to help my parents set up an ebay store so they can move a lot of the stock from their antique store that amongst other factors was killed by Ebay (ironic).
I am wondering if there are factors to an ebay store that would give added value that you would not get on your own?
1. Ease of use
2. Name recognition, credibility
3. Sense of protection
4. Ease of payment options
5. Is there an added exposure to marketing or do you still have to do all the marketing that you would have to do as a new website owner?
With these answered it may be that the costs are acceptable in some cases. I am not pro Ebay, they terminated me as an affiliate without paying me due commissions. They are a giant that doesn’t give a sh#& about you or me but it may be an option that is best in some cases?
What do you think?
Hi Bill,
The advantage of having an Ebay store is that you can get exposure through Ebay’s audience whereas you have to do all of the marketing yourself with a new website. That being said, Ebay customers tend to be cheap and it’s very difficult to differentiate yourself from all of the other stores due to the limited user interface. Throw in the exorbitant fees and Ebay becomes an unattractive option in the long run.
Thanks Steve, that sounds just about right.
Ebay is one of the giants that has very little respect for the “little” guy.
Happy New Year!
I have to agree with this article, setting up your own website is the way to go. Running an ebay store can be done in parallel with owning your own website but one should never rely solely on eBay. It’s too risky.
I am an eBay powerseller and have to stick up for it a bit.
eBay brings you millions of visitors every week. People who are looking for and buying your products. That kind of traffic and exposure is very hard to come by on the search engines!
The fees reflect the benfits. It’s also a good place to start in determining if there is a demand for your products and at what price.
I’d always look for ways to cut costs so expanding to a website and using your eBay store to drive traffic there is a definite.
eBay isn’t all bad.
yes its true ebay does take a lot of your profit, but for me ebay works the best. I tried making my own online shop it turned out horribly i lost some +$100 maybe not a lot, but to me its quite a bit. I made the website everything was seemed good, I also got google adwords for it. (I have no idea, but they blacklisted me saying I was not allowed to use them anymore no explanation. I think if you have the money and the right item you could make a great website.But getting your customers is very difficult Good things about ebay,ebay is pretty trustworthy company, you get lots of potential customers, most times its safe and secure. Also its not always true the buyer is going for the cheapest item they will also go by the sellers feedback (as for me I always go 4 the cheapest ;p) I have sold items a little higher than what other sellers are selling it for (not much maybe a few dollars more). I think its a good way for people to try out the field. I am a top rated seller, but I still don’t make a lot (haha maybe because i just spent it all on ebay items) as the person above me said its not so bad. All my items have free shipping and if a customer complaints I never argue I just give them a refund. I would rather lose a few dollars than getting a neg and losing potential customers. actually having an ebay store(I have the middle I pay $50 a month) is cheaper than not having one (4 me it is) listing items is just $.05 for 30 days. Its cheaper than listing a item for $.99 for 7 days (I have around 400 items)
at least its better than Amazon in my opinion (I can make more profit off of ebay and Amazon customers never leave you feedback :’(
I hope to start selling online soon.
This website makes a point but downplays the traffic which is one of the valuable aspects of ebay. There is also a bias here as they are trying to make their online money from you purchasing their “how to build your own online store” kit. Everyone has their own motives.
Hi David,
Having owned an Ebay store myself in the past, the traffic is indeed very alluring. However the point of the article is to emphasize that the best way to proceed is to build and own your own shop so you are not at Ebay’s mercy. Considering that most businesses yield a profit of 20ish percent, getting 12-15% taken right off the bat will greatly limit your profitability potential.