Pros and Cons of Opening an Ebay Store

According to eBay’s annual report, nearly 10% of all electronic, online ecommerce sales worldwide occur on eBay.

Today, there is more to eBay than just auctions. In 2001, eBay introduced eBay Stores, a venue for eBay sellers to cross sell inventory. However, in the first year, stores were very basic and sales were less than sluggish. Not anymore! Ebay stores are bigger, better, less expensive and popular with large volume eBay sellers.

From a marketing branding standpoint, any serious online seller must at least consider establishing an eBay store. It is no longer just a place to unload inventory. It now generates brand awareness and is a serious venue for building a substantial customer base.

Let’s take a closer look at the advantages and disadvantages of opening an eBay store.

The Pros of an eBay Store

• eBay has very stringent rules about advertising a company website or including external links on a traditional auction listed on eBay. However, you can direct traffic to your eBay store, which becomes a cost effective way of securing new customers.
• Promoting inventory on an eBay store is very inexpensive, with each product costing as little as $0.02 per month. This is an effective way to advertise items and increase brand awareness for very little cost.
• New robust functionality features for eBay store owners now allow sellers to customize stores to increase company brand awareness. Standard functions now include email marketing, web analytics, and merchandising tools.
• A new feature at eBay: eBay has started to show store listings within search results ONLY if the regular search returns less than 10 items.
• eBay Stores allow sellers to promote their brand and list hundreds of items at a fraction of the cost of listing them on the traditional eBay auction format.
• eBay Stores can now be tailored and monitored in much the same way a private company website can.
• eBay Stores allows impatient consumers, who are looking for a bargain but want it now, to purchase quickly without having to bid and wait for an auction to close.
  

The Cons of an eBay Store

• eBay Store items do not generally show up in the eBay search. This means that items listed in store inventory are not receiving the same amount of exposure as auction listings.
• Products listed in an eBay store usually sell for less than the same item might sell for in a company website. This may translate to reduced revenues or smaller profit margins. However, large volume sellers can make up for this profit gap by moving more merchandise on an eBay store,  thanks to increased traffic and product exposure.
• eBay Stores are not free! A basic store setup costs $15.95 per month. If you want a featured store, the cost runs closer to $50 monthly. Of course, for high volume power sellers, an anchor store will cost $500 a month. Therefore, depending on your eBay store setup, you must generate enough sales to cover costs and make a profit.
• Buyers come to eBay for the bargains. If your eBay store prices are comparable to retail pricing, it will be difficult to sell in volume, especially once shipping and handling costs are factored into the buyer’s equation.
• You are 100% bound by eBay’s selling policies. You must follow eBay’s seller and storefront rules, some of which can be very restrictive to certain sellers. Failure to comply will result in eBay closing your store, suspending your eBay account or terminating your account completely.