Since its launch back in 1995, eBay has become one of the top destinations for people looking to sell everything from rare collectibles to electronics to clothing. But there’s a difference between just selling a few spare items and creating an actual business on the platform.
It is possible to start an ongoing business using eBay as your primary marketplace. But as with anything, there are pros and cons to consider before jumping in.
Danna Crawford, eBay selling coach and founder of Power Selling Mom said in an email interview with Small Business Trends, “I feel every business can benefit from opening up an eBay store. Bringing your wares to the world’s largest online marketplace can not only increase exposure for your business but it can help build your brand. It can be a bit of a learning curve getting started but the rewards are grand!”
Pros and Cons of an eBay Store
Here are some pros and cons to consider about eBay before using it to start your very own ecommerce business.
Pros of Selling on eBay
Built-in Base of Shoppers
With 171 million active users in the first quarter of 2018, eBay is one of the most popular ecommerce destinations online today. So you don’t need to spend tons of time or money marketing your business — those shoppers are already browsing eBay for a variety of different items.
Community Features
To grow your shop and learn the tips and tricks of operating a successful eBay business, the site offers community features like discussion boards and question and answer forums. So you can learn directly from other sellers who have found success on the platform.
Crawford says, “eBay is more than just a marketplace, it is a community of people helping people and working together!”
Easy Set Up
As opposed to building your own site from the ground up, setting up a storefront on eBay is relatively quick and easy. You need to sign up for an account and purchase a store subscription. Then you can personalize your storefront with a few clicks and start adding products right away. So you don’t need to invest a ton of time and money just to get your business off the ground.
Seller Protection
Crawford says, “eBay has a great reputation for not only buyer protection but for seller protection.”
The site has been known for years as one that really protects buyers in case a seller doesn’t ship a product or engages in any kind of fraud or misdirection. However, there are also seller protections in place in case a buyer doesn’t pay or files a Money Back Guarantee claim without any proof of wrongdoing.
Multiple Selling Options
Unlike many of the other popular marketplace sites, eBay offers both auction and Buy It Now options for sellers. So if you just want to have a normal shop with fixed prices, you can. But if you want to potentially make even more by letting some items go as auctions, you can. You can also set minimum prices so you don’t have to sell those items at rock bottom prices if you don’t want to.
No Competition from eBay
Additionally, eBay doesn’t actually sell any products of its own. So when shoppers are browsing the site, they only see items from third party sellers. This also means that the platform has no incentive to make your products harder to find in an effort to guide buyers to its own line.
Crawford adds, “eBay’s promise is that they will never compete with us. eBay is not selling products on the site. They do not compete with their sellers.”
Cons of Selling on eBay
Marketplace Fees
Compared to some other ecommerce platforms, eBay’s seller fees are actually relatively low. But they do still exist. The site charges insertion fees when you list an item on eBay and total value fees that are based on the total price of the sale. There are also some optional fees if you want to make your products easier to find. The exact costs vary depending on your seller subscription model and the price of your items, but you can see a full breakdown here.
Stiff Competition
As of 2017, eBay’s gross merchandise volume sat at $83.9 billion. So even though eBay doesn’t sell any products itself, there are a ton of other sellers on the platform that you have to compete with. So while it’s easy to get set up and you can certainly take advantage of the huge number of built-in shoppers, you still do need to find ways to set your shop and products apart from all those other options.
Bargain Shoppers
Partly because of its early days as mainly an auction site, eBay has become known to many consumers as a site for bargains. While there are certainly some shoppers willing to pay top dollar for rare collectibles, there are even more who are looking for the cheapest possible prices. There are countless articles and posts from shoppers guiding others toward loopholes or tips for getting the lowest possible prices. And eBay even has a separate section of the site for deals. So if you’re looking to sell high priced merchandise, it might not be the best platform choice.
Less Visibility for Slow Shippers
Crawford explains, “eBay rewards the sellers that can ship items the same day or at least 1 business day. If you have ‘custom’ items and cannot ship as fast, there are exceptions to the rule. However you will receive more exposure by offering fast shipping. Customers do not like to wait for their items.”
So if you don’t have the time or ability to ship your items quickly, it could have an impact on your shop’s visibility. So that’s another situation where eBay might not be the best choice.
Limited Control
When you set up your own website from scratch, you can control pretty much every aspect about how your store looks and operates. However, the general layout and operation of an eBay shop is pretty standardized across the platform. So you can add a few branding details and shop policies, but other than that most things are already determined for you.
Periodic Site Changes
Crawford says, “eBay’s platform is always working hard for improvements. And with improvements this will result in website changes. Sellers that cannot adjust to change can become annoyed. The key is to adjust your business model quickly and adapt to the changes. Keeping in mind, if eBay changes something, the reason is to benefit everyone. We may not understand but learning to adjust to change and trusting in eBay is the key.”
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This article, “Want a Thriving Ecommerce Business? Focus on the Pros and Cons of an eBay Store!” was first published on Small Business Trends