Friday, April 10, 2009

eBay Seller FAQ: Should I Open an eBay Store?


This question has been appearing lately on my Facebook group, so I will make the case for opening an eBay store. According to one of our members, 47 items is the threshold that justifies opening an eBay store - at least as far as fees are concerned. (See the math below.)

Opening a store is crucial if you want to sell on eBay as a business, rather than a hobby. First of all, the listing fees are only 3 cents per item for a 30-day listing. You can list hundreds of items in your store inventory for practically nothing, as opposed to running all auctions for between 35 cents and one dollar per item. Yes, the final value fees are higher on store inventory, but you don't pay these fees unless an item sells. You can display hundreds of items very inexpensively by setting up an eBay store.

Second, having a store is like your home base on eBay. Buyers may check out your auctions, but if you have a store, they can look for other things that may interest them. If you offer combined or discounted shipping for multiple items purchased, customers will be compelled to buy more from you at one time. Having a store gives you brand recognition - you can build a customer base and customers will return if they like your service and your products.

Here are some simple suggestions for a successful eBay store:

1)Study your eBay Store traffic reports. With this information, you can make educated adjustments to your store that will improve your sales.

2) List your entire inventory in your eBay Store. At $0.03 per listing, 500 items will only cost $30 per month. Your store listings will show up on search engines, driving traffic to your store, and on eBay searches. The more items you have to attract buyers the more sales you will potentially make. People can't buy what they can't see.

3) Accept PayPal as a payment method. More than 90% of eBay buyers pay using Paypal. Failure to accept Paypal will cripple your efforts to collect payment from your buyers.

4) Have a fair return policy. A fair return policy pays for itself many times over in sales and repeat business than it costs in actually issuing refunds. If an item is returned, just relist it again and move on.’

5) Keep your shipping fees fair and competitive. You’ll pay the price for excessive shipping fees on the DSR (detailed seller ratings) because your customers can rate the fairness of your fees. New sellers often think they are clever charging a ridiculously low price for the item counterbalanced by an enormous shipping fee. This is called circumventing fees and you can be suspended from eBay if you use this strategy.

And here is the math that justifies opening an eBay store:

On auctions, it costs 35 cents to add the buy it now option.

Store listings cost 3 cents each for a 30 day listing.

Store fee is $15.00 a month for the basic subscription.
15/.32 = 46.875 (rounding up to 47)
Thanks John S for doing the math!

Hope this helps you make your decision about opening a store. If things don't work out for you, closing the store is always an option.

Happy Selling!


4 comments:

Joy said...

It's so funny cause I was just thinking this week weather I should should open a store or not. This helped a lot, thanks :)

Anonymous said...

Thanks for supplying the crossover figure.

I'm just starting to sell after being a buyer since 1998, and I'm trying to find the cheapest way to list. At present ebay is taking a lot of the profit off my sales..

Doug in New Zealand..

Anonymous said...

Thanks for this post! I opened a store about a month ago and assumed my listings were going to be .03 automatically, lesson learned. Then I listed as Store Inventory but it didn't seem to have the same exposure as a regular auction listing. Now I presently have 80 items listed and MOST start as a regular auction and if they don't sell after the 7 days, then I put them in my Store Inventory. Am I spending too much? Should I just be putting them in the Store Inventory from the beginning? HELP!

Anonymous said...

Thanks for the info, but there are certain categories that are only at $0.15 for B.I.N. They are Books, Music, Movies, and video games. If you specialize in this medium, you're probably going to need over 120 items a month to justify a store, no? Of course, the FVF jumps up to 15% here as well.