Ebay, as we all know, is a marketplace for buying and selling items at both fixed price and through an auction system. Many people have made money with eBay, but it’s time to revisit that question again – is selling on eBay worth it in the current eCommerce world? Here’s what I found out for you.
Key Features of eBay – From a Seller’s Perspective
There are a couple of reasons why people choose eBay as a platform for their products. Perhaps you may resonate with some of them.
- Firstly, eBay has got one of the highest traffic channels when it comes to shopping online. About 164 million people are actively using it and from a business point of view, that’s a lot of potential customers. Theoretically, with that kind of audience size, you can make plenty of sales.
- As one of the pioneers in online retailing, eBay always has a solid product checkout and fulfillment support that helps to create a seamless shopping experience. This takes away the trouble of having to purchase and manage an eCommerce solution. Save time, save money.
- The platform has always been well-known for collectibles and vintage items, so if you are into that, it may be suitable for you.
- There’s a research tool called Terapeak that is designed specifically to analyze competitors and to improve seller’s listings and profit. It can be used across Amazon, eBay as well as Shopify and cost about $144 per year. Something you may want to consider if you are serious about scaling your business in any of these 3 platforms.
Now that I’ve covered what eBay is good for, let’s address some fundamental issues that will either make or break you as a seller.
How Does eBay’s System Affect Sellers
There are essentially 3 ways you could be coming in as a seller;
- You are clearing up your house, found a few items and hoping to make some cash from them. Here, you are just a regular seller aka a small seller.
- You own a retail business and looking to sell your own products through the eBay store. In this case, you are a seller with a business entity.
- You don’t own any products but know of a few wholesalers that can fulfill a shipment on your behalf. That is selling through drop shipping.
While all these 3 methods are legit, the thing that you need to know is that eBay charges different type of fees. They need to do that in order to keep their business in operation. This is a common practice for most online marketplaces in exchange for hosting your products on their site. Fair enough.
So what are the fee structures like? There are three of them that you need to know;
- Basic Fee = Insertion Fee (the fee you pay for listing a product) + Final Value Fee (the percentage you pay from the total amount of a sale – usually 10%, excluding tax)
- Advanced Listing or Supplemental fee (optional) = pay for services to give your product more exposure and better conversion in the marketplace
- PayPal Fee = for every successful transaction, the payment processing fee is 2.9% plus 30 cents.
For more details about the fee structure, please visit eBay’s official page here.
1) Regular Seller
As a regular seller, the prospect of earning some extra cash from items around the house can be quite exciting. However, the reality is, there are hundreds of people doing the same thing at any given time of the day.
Due to the high load of second-hand item sellers, most listings aren’t immediate. They are usually placed in the queue while the system within eBay index and rank the product on their site.
By default, power sellers get featured first and if all the product keywords are befitting, you may see your listing within 24 hours. Otherwise, you could wait for days before it appears or worse, doesn’t show up at all.
In this situation, you’ll need to intervene by contacting customer services (lots of complaints about that department) OR relisting (and paying the insertion fee for the second round) – all at the expense of your time and money.
This can be very frustrating for new sellers and I am guessing that you may have a better chance at selling directly on Craigslist or doing a car boot sales than trying to rectify the seemingly complicated and technically challenging task of selling a second-hand item.
Just so you know, more than 80% of eBay’s sales are generated from brand new products so that’s something to think about in terms of market demand.
2) Business Seller
An eBay store is basically a dedicated webpage that organizes and list your products without having to cram with other sellers. There are 3 types of subscriptions to choose from, namely;
- Basic – $24.95 (monthly) / $19.95 (yearly)
- Premium – $74.95 (monthly) / $59.95 (yearly)
- Anchor – $349.95 (monthly) / $299.95 (yearly)
The key difference between the three is that with higher subscriptions, you are entitled to a lower listing fee, lower final value fee and access to email marketing support. Here’s a screenshot of what you can expect from an eBay storefront.
- Even though I don’t own one, I can easily tell that the design and feature of the homepage are very outdated when you compare to modern-looking online stores.
- At a closer look, it’s purely a listing site that doesn’t show a lot about your business profile; the number of pages provided is limited and there’s no blogging feature to it.
- Having a dedicated webpage doesn’t exactly make your site unique because it doesn’t come with a custom business domain. This page is merely an extension of eBay’s site which resides as a subdomain. This element deters your business from being indexed or even ranked on the search engine.
Honestly, if you are going to pay $299/year to run a full-fledged online store, you may as well invest in a professional eCommerce solution that can provide cutting edge features across all marketing channels.
Getting into dropshipping can be like a war and doing it on eBay is a double cutthroat. Why? Well, think for a moment about the mentality of the buyers who are searching on eBay. They are usually searching for a good deal – meaning the lowest price possible – and will hunt until they get it.
Since the whole product listing process is so transparent, drop shippers have managed to figure out a way to set up THEIR OWN store and sell for a much lower price than you. Already your product margin if very little, so how can you possibly beat that kind of competition?
Marry that factor with the buyer’s mentality and you’ll never make a sale. It’s that shockingly simple.
So, Is It Worth Selling on eBay
Some 10 years ago, it might have been a good platform to use, but not these days anymore. The platform has become oversaturated with sellers, the fees can all add up to cut into your profit and the targeted audience isn’t usually ready to pay for the price that your product deserves.
It could add as a traffic alternative for established sellers or at least people with some experience in online retailing. For beginners, I think it’s far too costly and challenging and you may be better off doing something less risky like affiliate marketing.
I hope this article has helped answer some of your concerns in regards to selling on eBay. Please check out my recommended training platform if you wish to learn more about building a successful online business OR even starting one from scratch.
I will be more than happy to guide you. Talk to you soon.