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Thalia Miller is an eBay enthusiast, author, artist, mother, wife, and entrepreneur with strong Christian values. She lives in the middle of nowhere, just north of Dallas, Texas. For more info visit: http://www.bohemiattic.com/album.htm

 

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Winners Circle

Thursday, February 24, 2005
  eBay Stores vs Website Sales

No one will dispute the intense marketing power of partnering with the eBay platform for fast results. However, there has been some major debate over the usefulness of the eBay store feature since the recent rise in pricing for this selling option. Let's take a look at the major factors argued against the eBay store feature.

An interesting and free2005 eBay Stores Report comes from an excellent source, Retailing Experiments, points out that the three powersellers reviewed performed higher sales ratios through their eBay store channels converting 201% over their websites on average. Unfortunately, the study was just a snapshot and is not conclusive evidence that the store feature is better for everyone.

For instance, only three stores were sampled, and for a short 30-day window of time. The only factors taken into consideration as far as the report concedes, were conversion rates, revenue generated per page load, and traffic in general. Design was also briefly mentioned, stating that websites appeared to be better designed than their corresponding eBay stores. Yet, the eBay stores did better overall, despite this.

In its defense, the report was intended to offer a cross-section study for the given time period it covers and it provides the insight it set out to capture. It would have been nice though to have seen deeper coverage, such as: a larger slice of power-sellers tested, the length of time they've been in business and on eBay, and probably most importantly, what methods each seller used to promote their eBay stores as opposed to their web presence, because the greatest draw for the eBay platform is the exposure a seller receives using it. So, the real question remains: Is it beneficial to have an eBay store in addition to regular listing on eBay without a store, if you already have a website?

Glitz N Glamour, the second store listed out of three on eBay's "2004 Best In Stores Winners" didn't seem to think so. The link shows that their eBay store no longer exists. As you may know, I closed my eBay store earlier this week. The main reason for this is that I have been very focused on other things including the promotion of the new book, and the development of our website. At this point, I'm questioning whether to reopen at a later time or build entirely on the web brand.

On the other hand, there are a lot of powersellers who have chosen to opt for an eBay store presence. More compelling is the evidence from the Nortica Bay site, which lists top eBay sellers based on positive feedback received. Of the top 20 fastest growing businesses on eBay (as of February 1, 2005), 100% have eBay stores. Of the top 20 highest rated sites for the same time period (measured previous 30 days), only four did not have eBay stores. Since the sellers listed are rated based on positive feedback, we can't know how sales were effected by the operation of an eBay store, but we can assume that sales were high in relative proportion to numbers of feedback. Looks like the majority of powersellers choose to use the eBay store feature.

Perhaps, the best way to decide if an eBay store is for your business or not, is to try it. I definetly think that if you don't have a website at all, you should sign up for the free trial of eBay stores here. If you're looking for a cost effective website solution though, you should look into 1&1 hosting solutions.

Let me know your thoughts on the matter.


Thanks,

Thalia Miller for bohemiattic
 

 

Comments:

... Not everyone is too concerned over the fee increase. Jim Cockrum, eBay Powerseller, publisher of "Creative eBay Selling News," the world's largest newsletter on creative eBay selling, and author of one of the best selling eBay books of all time "The Silent Sales Machines Hiding On eBay" has other opinions.

"I don't see the eBay fee increase as a bad thing," Cockrum said in a phone interview. "I actually see it as just the opposite - it's a good thing because eBay is eliminating my competition for me. Who leaves eBay when eBay increases seller fees? It's not the customers (or shoppers). They don't go anywhere since they aren't affected. Only a handful of the weaker sellers leave eBay when fees go up."

Cockrum recommends that sellers use eBay in non-traditional ways to build their online businesses so that future fee hikes will not have an affect on their e-business.

"Selling on eBay continues to be one of the more popular ways to make money online, though very few people are getting rich with an eBay business alone," Cockrum said. "Many Powersellers don't make enough profit to cover their costs. The key to really making money with eBay is not in selling items at auction, but to use eBay to drive customers to your other online ventures. If you do that, the rate hikes do not affect your bottomline nearly as much."

Not everyone shares Cockrum's enthusiasm. Many small sellers think the government or a regulatory board of some kind should get involved to help keep eBay fees in line. This probably won't come to pass anytime soon, but who knows. I can remember when a little company called Microsoft had free rein before they killed off all comers and came to monopolize their market. eBay seems to be headed in the same direction.

The threat of regulation may be the reason eBay is now attempting to smooth the ruffled feathers of the miffed masses. eBay announced this week that they would give a one-time $15.95 credit to eBay store owners and reduce minimum listing fees for inexpensive items from 30 cents to 25 cents, effective immediately.

Too little, too late? Could be. Many sellers believe that eBay may be writing its own obituary with such stringent price increases and such little thought for the smaller merchant. The online petition predicted the long term effects of the fee increase to be:


Smaller sellers will stop selling on eBay and try to sell somewhere else online. They will never have the chance to expand themselves on eBay.


Larger sellers may consider starting their own online store or sell elsewhere.


Prices of auctions will increase. Buyers will turn back to retail stores. The idea of eBay is that you can find things cheaper there, even when adding shipping and handling together.


Discourage new sellers, decreasing competition (which is what the eBay market thrives on for pricing).

Only time will tell if the predictions come true, but for the short term many smaller sellers are closing down their eBay stores and moving up the street to Yahoo.com.
Here's to your success!

Small Business Q&A with Tim Knox

Copyright (c) 2005 Tim W. Knox
About the Author:
Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox.

Tim's latest books include "Amazing CD Money Machine" and "The 30 Day Blueprint For Success!"

 

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