In yesterday’s AuctionBytes newsletter there was a link to an article written by Trevor Ginn titled Fourteen Tips to Reduce eBay Fees . While most of the ideas presented have been around for a while, Trevor does a pretty good job of consolidating them into one article.
One of them however, brings to mind a question that comes to mind every time I see it. Tip # 8 says:
“Open An Ecommerce Store
Potentially the best strategy of all is to expand your business beyond eBay. By setting up your own ecommerce store you can up-sell to customers you have acquired through eBay, and pay no fees at all. Channel Management software such as eSellerPro, Marketworks and ChannelAdvisor enable eBay sellers to run an ecommerce store off the same inventory as their eBay sales.
Potential saving: You pay no eBay fees on items sold off eBay, though you will pay for using the channel-management software.“
Although Trevor doesn’t talk about it here, usually when you see this advice in the context of using a small number of eBay auctions to drive traffic to your About Me page to drive potential customers to your off-eBay web site to both avoid eBay’s fee structure and to generate more sales. This idea always get a lot of discussion every time eBay fiddles around with their fee structure. It’s also one that is recommended in many of the “how to succeed on eBay” products being sold. In fact, one of the most often recommended eBay books is pretty much centered around just this concept.
The question I have is - If you are looking for a way offer products at a fixed price and, at the same time, reduce what you pay for auction listing and final value fees, how come no one ever talks about using an eBay store?
The only actual study I’ve ever found that compares using an eBay store vs your own web site as a sales channel is one done by MarketingExperiments.com. Their study shows that an eBay store will out-perform a stand-alone website, both in merchandising effectiveness and conversion rates, by a considerable margin.
My own experience with off-eBay web sites vs eBay stores pretty much reflects the results of this study. On a monthly basis, my eBay store brings in between 300% and 400% more revenue than the off-eBay web site I used to have.
So my question is - If a stand-alone web site is such as great alternative to eBay and eBay stores, show me a study or research report I can sink my teeth into that proves it.
Granted, the study above is now several years old, but where is something more recent, that dis-proves it?
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February 20th, 2007 at 12:22 pm
Hey Gary,
I try to look at it, not as an alternative to eBay, but as an addition to my business.
Ebay is great for getting traffic and getting customers but once I have that customer, I consider them MINE.
Ebay store final value fees are still very expensive and if given the choice, I’d much rather have my customers buy from my website.
The way I do things….
I always run 1 fixed priced listing (I might change this to the ad format) with the purpose of that listing to drive traffic to my eBay store where I sell the same product and related products.
Once I have a buyer, I attempt to do all future business with them from my website.
This works great if you sell the same products over and over and have all the same listings up all the time as I do.
In your situation, selling what you sell, I’m not sure how it would work.
I suppose that if there’s software out there that would look at your eBay inventory and was able to automatically log into eBay to cancel the listing if it sold on your website, as well as take it off your website if it sold on eBay, that it might be a good idea.
Do you know of any software that will do this?
If not I might have to have it developed.
Jim
February 20th, 2007 at 12:23 pm
Oops - I didn’t check the websites listed above.
Maybe they do what I was looking for.
Jim
February 22nd, 2007 at 4:59 am
thanks for your kind comments on my article.
I think that an eBay shop is an excellent marketing tool. My main arguement for having a separate webshop is three fold
1. Acquire customers on eBay and then redirect them to your webstore for future purchases. This way you can avoid eBay fees.
2. A webstore will allow you to use other ecommerce channels e.g. PPC, search engine optimisation and shopping comparison engines.
3. Safety in numbers. If you sell on eBay only then you have all you eggs in one basket. If eBay shuts you down or changes it working practices you could go out of business.
February 23rd, 2007 at 1:03 am
Trevor,
I’ll agree that #3 has merit.
I’m not sure that I buy the saving eBay fees argument though. True you do save eBay fees, but if the studies figures are even close to accurate, given the choice of saving a few dollars in eBay fees or increasing my conversion rate by even 100%, I’ll go with the eBay store every time.
While PPC may be effective, I’m guessing it’s cost negates any savings people would have from not paying eBay fees.
eBay actually does a pretty good job of SEO for stores (and auctions). Again my guess is that for the average seller, eBays SEO would be more effective than doing it themselve, or paying someone else to do it.
My main point is still the same. I’m not attesting to the accuracy of the cited report in todays market. I’m just wondering if any of the people recommending sellers opt for a stand along web site vs an eBay store, have any real data to justify their recommendations.
Gary
February 23rd, 2007 at 12:32 pm
Gary,
I have no data comparing the two but I do have limited data comparing using both, as opposed to using just using the eBay store.
Most of the stuff I sell is related and I’ve got a lot of repeat customers. After they purchase from my eBay store, I prefer them to go directly to my website for future purchases.
They get an autoreply after they’ve paid by paypal that tells them about the website and it is also included in the than-you note they get with their package. they also get an occasional email from me reminding them about it.
I’ve done it this way for a long time and while I don’t actually sell a lot from the website compared to the eBay store, I know that I’ve saved around $10 in fees on each sale.
The website requires no maintanence once it’s set up so it more than pays for itself.
As you know, I only sell items that I have an unlimited supply of and I have the same listings running all the time so that makes it a lot easier.
Try to look at how this would work from your end with different items listed all the time. What would the software to run it have to do? If it’s not already out there, I’ll have it developed.
Jim