Don’t get me wrong I think eBay is a really cool concept because they take away so much of the hassle of selling online. They remove the need to worry about finding potential buyers for your products, they are already on the site which is a real bonus for any new business.
Another plus is that they will handle the payment side of things for you via PayPal integration so you don’t have to worry about setting up a merchant account with your bank. However there are a few major problems with using eBay as a long term business strategy.
● The fees eBay charge seem to keep going up every time you check, what is worse is you really cannot plan for this as they seem to put them up at random (or when they need to make more money).
● When eBay does put up listing costs and other fees it can really affect your margins, especially if you are selling a lot of products. They can wipe out your profit margin overnight.
● When you promote your eBay store online you’re promoting eBay as much as your own products because ultimately it’s their site and they are in control. Really you are depending on eBay’s good will to allow you to keep operating, do you want your business to be at the mercy of someone else?
● Ebay doesn’t favour one store over another so you are constantly competing with other competitors who are selling the same products. At a basic level all your competitors will be listed on any search but they even list similar sellers at the bottom of you auction. Think about this next time you send potential customers to your eBay page.
I suppose the issue is that when I look at eBay I see something that is very easy for me to create myself on my own. At a basic level all you need is an out of the box ecommerce store and some payment processing (e.g. PayPal). I realise that for some this is way too complex to setup but the rewards are there if you can do it.
This article is by Paul at earn money online which has advices for people trying to start a business on the web and also general internet marketing tips.