Today, in such a tough economic environment, many business owners want to expand their customer base. Using online auctions such as Amazon.Com or eBay may offer that opportunity. However, upon closer examination, both auction sites are not alike and one may offer a better profit opportunity than the other.
Many years ago, when eBay first was created it offered a true “free enterprise” when it came to selling products. Business owners could actual create a business selling on eBay alone. Vendors were able to purchase “Featured First” options. This meant that sellers could pay extra fees or fixed cost in order to have their product seen either on the main page of eBay or on the top of the list when a buyer was looking for a particular item. For the “Top Rated Sellers” as well as new businesses entering the selling arena it provided several benefits. First, it offered huge traffic, meaning more exposure to customers looking to purchase that particular item. Second, it allowed a huge cost reduction when selling multiple items. Most sellers using the “featured first” did sell in large quantities, and finally, it allowed eBay buyers to purchase items from high positive feedback sellers, thus ensuing a good experience for both parties.
With “featured listing” gone so has the traffic. An example of this could be seen with one seller, called Trustworthy1188. This seller has a amount sold of over 5800 items on eBay. Since the selling featured first was removed only June 2010, it can be assumed that most of the sold items were done prior to its removal. Fast forward to current times and here are some facts on the listings. Items that were ready to close within 30 minutes only had 27% with a bid, only 3% had multiple bids and finally 70% had no bids. So unless the profit ratio is huge, the cost of selling your product with fees, maintaining a store can far exceed what you may be able to sell.
The products sold by Trustworthy1188 were women’s handbags. Traffic provided by the counter on the bottom of the listings indicated that an average of around 30 page views were done by possible buyers. A far cry from the hundreds that would have been registered by the “featured first” option.
Unless your product is a highly specialized or desirable the chances of increasing your product awareness, customer base or profits through eBay have now been greatly decreased. Chances are that your product would get lost in the sea of listings.
Based on the US performance reported by auctionbytes.com it is not surprising that growth was only up 2%. eBay is becoming more reliant on its success of PayPal.Com for continued growth and revenue. For small business owners, prior to June of 2010, I would have recommended eBay, but as its model stands now, it is not worth the cost of doing business. The eBay auction site offers moderate success of selling and its fees for listing ,selling and transacting through PayPal are high. For more information about selling on eBay, go to www.Pages.Ebay.Com/Sellerinformation/starting.html.
Amazon.Com has come a long way from its roots as a place to buy books at a discounted rate. Today, Amazon sells a global network of items and treats its business vendors as “partners.” That is a great word. Its competitor, eBay sees buyers and sellers. Amazon’s business model, is to make its sellers, that are considered “third party”, a gateway to offering even more products to its customers. Amazon allows its “partners” to sell on Amazon by either choosing to sell item by item or pay one price, which is .99 cents per item or currently $39.99 a month to sell unlimited amount of items. The monthly price does not include the referral fee charged by Amazon which can be between 6-25% of the sale price. However, unlike eBay you get a shipping credit back on the items you sell. Meaning part of the shipping cost is refunded. Another benefit is that unlike eBay, where you use their merchant system, PayPal which charges you a fee. Amazon.Com lets customers use their checkout system at no additional cost.
Although there is no way for you to “feature” your products with Amazon, once a listing is completed it is weaved very well into the search engines. Amazon also allows you during the process of listing your product, to add keywords or use their own to allow for better ranking. Once listed, unlike eBay, the item stays on as long as you would like. eBay has a maximum listing of 30 days.
Amazon.Com also allows for much easier access of all your listings for changes in price or quantity. You can also compare your price against competitors. You can advertise and link to your website to your business on Amazon.Com, however you cannot on eBay. To find out more about selling on Amazon, go to www.Amazon.Com/Sell-On-Amazon
Using high profile auction sites to heighten your presence on the web and to drive customers to your business is a smart decision. The costs are minimal and these sites already spend millions of dollars to promote themselves, a budget beyond the reach of small businesses. Test the waters and start out small, but you may be surprised at the results that can add much needed revenue to your bottom line.