If you want to build a profitable ecommerce business that stands the test of time, you need to register your own domain and start your own web site.
Most people who aren’t tech savvy often question their own abilities and end up relying on 3rd party marketplaces like Ebay to implement their website store for them.
Here’s why that’s a bad idea.
Ebay Doesn’t Have Your Interests In Mind
Ebay, like most publicly traded companies, is 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. They can switch up the rules whenever they want and drastically affect your sales. They can also ban your sellers account at any time.
Over the years, Ebay has made dramatic changes that have put many sellers out of business. As a slave to their platform, you can never be complacent and they continue to raise prices to appease Wall Street.
Let’s take a quick peek at Ebay’s selling fees in the table below.
|Basic fees for auction-style and fixed price listings|
|Insertion fee (per listing)||Final value fee (per item)|
|Your first 50 listings
|Free||10% of the total amount of the sale|
|All additional listings over 50
|All your listings appropriate for and listed in the Musical Instruments & Gear > Guitars & Basses category||Free||3.5% of the total amount of the sale|
In addition to the final value fees listed above, Ebay also likes to nickel and dime you with listing fees as shown in the table below.
|Upgrade||Starting or Buy It Now price: under $150||Starting or Buy It Now price: $150 or more|
|1, 3, 5, 7, and 10-day duration||30-day and Good ‘Til Cancelled||1, 3, 5, 7, and 10-day duration||30-day and Good ‘Til Cancelled|
|International site visibility||Auction-style listings (all durations)||Fixed price listings (all durations)|
|$0.01 – $9.99||$0.10|
|$10.00 – $49.99||$0.20|
|$50 or more||$0.40|
As you can see, the listing fee table is fairly intricate and intentionally complicated so you don’t realize how much it costs to list an item.
Bottom line, if you open a store on Ebay, they will take between 10-11% percent of your gross sales right off the bat.
If you also take into account the fact that you have to use Paypal for your transactions, you end up paying Ebay about 11-14% of your total revenue.
In addition to this, you also have to pay a monthly store membership fee for the privilege of creating a web presence on a platform that you do not control.
For a long time now, Ebay’s growth has been stagnant. Do you really want to host your ecommerce business with a company that hasn’t grown or innovated for years?
In any case, here’s how much Ebay charges for store membership fees.
Note: The difference in plans comes down to how many listings you plan on having in your shop and whether you need dedicated customer support. Ebay shops also get a slight discount on the final value fees
|Store type||Monthly subscription fee||Yearly subscription fee|
|Basic||$24.95 per month||$19.95 per month|
|Premium||$74.95 per month||$59.95 per month|
|Anchor||$349.95 per month||$299.95 per month|
As you can probably tell, Ebay’s listing and selling fees start to add up to a lot of money!
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 storefront.
They try to bundle their stores with design 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 a handful of custom webpages. And the design of these pages is very canned.
Here’s a what a page looks like..
In this day and age, $300/month is an egregious amount to be paying for a simple website builder. 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 look for bargains. Especially since most of the stores on Ebay are mom and pop shops or individuals working out of their home, people generally expect to pay less for their merchandise versus a real store.
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 is to lower your prices which will cut into your margins.
In general, the Ebay marketplace is extremely competitive, cut throat and hard to break into.
You Can Not Build A Brand On Ebay
Because Ebay is a closed platform, you do not have access to your customer base nor can you sell to your customers outside of Ebay.
As a result, it’s extremely difficult to attract repeat business. After all, you can not collect emails and you are not allowed to contact customers after a sale has been made.
In other words, you have to constantly fight for new customers and you will never build a loyal customer base.
The other problem is that shoppers who buy on Ebay believe that they are buying from individuals or small business owners selling goods out of their garage.
As a result, it’s almost impossible to build a reputable brand. If you want to start a long term ecommerce business, then Ebay is the absolute wrong place to do it.
What Ebay Is Good For
Even though Ebay is not a good long term home for your ecommerce business, there are some benefits to selling on their platform.
First off, the Ebay marketplace is fairly large so there’s already a built in community of avid buyers to tap into. As a result, selling on Ebay is a great way to validate your product before you go all in.
By selling new items on Ebay first, you can quickly test the market to determine whether you should move forward with a bulk order.
Ebay is also a great place to liquidate your old junk or products that have been gathering dust in your warehouse.
To perform product research and validation on Ebay, I like to use a tool called Terapeak. Terapeak scrapes all of the completed listings on Ebay and tells you what products are hot.
Related: If you are interested in learning how to sell online, click here to take my FREE 6 day mini course. I will walk you through the process of finding a product to sell and how to make your first sales online.
Making Money Selling Online
In the long run, it always pays to own your own platform. After all, when you own your own business, you call all of the shots.
No one can raise prices on you.
No one can change their selling policies on you
No one can ban you from your own platform
The most compelling reason to start your own online store is that it allows you to own your customer base. After all, a customer who has purchased from you once is many times more likely to buy from you again.
You can gather emails. You can differentiate yourself from the competition with your own design. You can establish a brand.
The biggest hurdle most people have when building their own store is the fear of the unknown. But these days, there are many simple and inexpensive ways to build your own shopping cart.
How To Open Your Own Shop
For example, there are many shopping cart software packages already written for you. Here are some choices.
- The Cheapest Solution: Click here to watch a video tutorial I made on how to start an online store using free open source software.
- An Easier Solution: Click here to check out Shopify, which is a fully hosted shopping cart solution that will do pretty much everything for you for a small monthly fee. They offer a free trial
- A Powerful Fully Hosted Solution: Click here to check out BigCommerce which is like Shopify but is more powerful from a feature standpoint.
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.
Related: If you are interested in learning how to start your own online store, click here to take my FREE 6 day mini course. I will walk you through the process of finding a product to sell and how to make your first sales online.
- Why Etsy Stores Are At A Disadvantage Compared To Online Stores That Own Their Domain
- How To Transition From Selling On Ebay To Running Your Own Online Store
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- Selling On Amazon Vs Ebay Vs Etsy And Why Relying On A Single Platform Is Gambling
- My Results Selling On Amazon FBA After 4 Months And The Pros And Cons Of The Platform
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