Thinking about using eBay as a key sales channel for your business, but unsure about how to navigate this platform or its profitability? This article breaks down the major pros and cons of eBay to help you decide if it’s a good fit for your business.
Let's dive in.
Understanding eBay
eBay has grown from a business-to-business auction site to a major consumer marketplace. As of mid-2023, it had about 132 million active buyers and 18 million sellers, mainly from the USA, UK, Germany, and China.
From a business-to-business auction site to a business-to-consumer marketplace, eBay has become one of the most popular online platforms to sell on today. Judge for yourself: As of the second quarter of 2023, eBay had about 132 million active buyers and about 18 million sellers. Most sellers are from the United States, followed by the United Kingdom, Germany and China.
eBay is the second most visited online marketplace after Amazon. A notable fact is that around 61% of eBay sales happen through mobile devices. This means you can easily reach your target audience.
Despite these impressive stats, eBay has its ups and downs for businesses. Let’s explore them.
Benefits of Selling on eBay
Here’s why eBay is a great choice:
A Great Starting Point
eBay is perfect for those new to online selling. It’s like testing your product in a real market before fully committing. Plus, you get paid quickly after sales, solving a common business issue of delayed payments.
Safe Transactions
eBay keeps buyer and seller financial info safe, using encryption for PayPal and credit card details. It also has the VeRO program to protect intellectual property, ensuring a secure and respectful trading environment, and allows you to track unauthorized use of trademarks, images, text, and other media that violates the rights of the owner.
Easy to Use
eBay is user-friendly, with helpful guides for first-time sellers, effective listing templates, and tips for better sales. The mobile app is equally straightforward, making selling possible anywhere.
Other big pluses include eBay’s large number of active users and its reputation as a trustworthy online marketplace.
Drawbacks of Selling on eBay
However, there are some challenges:
Maintaining a Good Seller Rating
eBay rates sellers as:
- Top-rated seller
- Above standard seller
- Below standard seller.
Each new seller registered with eBay is assigned a Standard level. Depending on how a seller performs on eBay, their level will change accordingly. Your performance on eBay affects your rating. Good customer service is key, and it takes effort to keep improving and stay profitable. Sellers are expected to advertise, increase sales, complete transactions successfully, deliver goods on time, etc. It takes a lot of work to make your eBay marketplace profitable.
eBay Seller Fees
To make the most out of eBay, you have to pay fees for each sale. These fees will reduce your overall profits. Understand the fees before you start:
There are two main types of fees on eBay:
- Listing Fee: Charged for each item you list on eBay
- Final Value Fee. A percentage of the total sale price plus $0.30 per item, covering extra costs like taxes and shipping.
The fees vary based on the item price, category, and your performance as a seller.
Handling International Shipping
eBay is worldwide, so you need to be ready for international shipping. This involves
- Using special packaging;
- Complying with country-specific shipping regulations;
- Being familiar with customs procedures and being responsible for lost goods or late delivery;
- Understanding international duties, taxes, and other tariffs.
Efficient shipping may mean adjusting your prices, which can affect your profits and store’s success.
In summary, knowing eBay’s pros and cons should help you decide whether it’s the right platform for your business. If you're concerned about eBay's downsides, read up on its rules, ask for support, and look at success stories to get the full picture and make an easier decision.