Friday, May 11, 2007

Are You Considering Opening An Ebay Store? Wait! Read This First.

I never thought I would say this about eBay Stores/Shops because I love the concept and they are the only place left on eBay to feel like an independent seller but what I am seeing coming down the pike isn’t pretty. If you currently have a store and can make a reasonable profit, I would of course recommend that you stay but if you are considering opening a new store, my suggestion is to wait. Wait until eBay figures out what they want to be when they grow-up.

I am seeing a disturbing trend for eBay sellers. It is the homogenization (such a big word) of eBay. It appears eBay management wants to look and feel like a big online retailer. I believe management is concerned that buyers are beginning to migrate to sites like Amazon in increasing numbers -- this is certainly the case in the Media category – so they are pulling out all of the stops to keep that from happening.

Part of this homogenization is the new Finding Experience. In order to present the best buying experience eBay needs to control the product that is presented to the buyer -- it’s called merchandising. The popular product is at the front of the store and of course the less popular product is at the back. That appears to be the vision of the new eBay.

They can do this on Express because they don’t charge anything to be included on the site but this new approach brings up a dilemma for CORE and Stores/Shops. How do you present the best product to your buyers when you are charging sellers to be included in that search? One seller’s 35 cents is as good as another’s isn’t it. If I want to sell low price commodity products and I’m willing to pay a fee shouldn’t my product get the same exposure as a popular product if we are paying the same fee?

We must remember, eBay doesn’t sell any product. They display seller’s product to buyers and facilitate the transaction and get paid very well for that service. Amazon and Overstock do not have these limitations. They all sell their own product and only charge sellers a FVF so they are free to merchandise to their hearts content.

eBay is introducing Finding to the .com that will change the way buyers see product and the jury is still out as to what will happen to Stores/Shops. Now is not the time to be opening up an eBay Store/Shop. Sure, you can list in core because your listings only stay up for 7 days and you can be in and out of the site with no commitment but Stores/Shops require a commitment. Since eBay itself cannot figure out what to do with Stores how are new sellers going to be able to cope with all of the changes? As a seller you look at Stores/Shops as your little place on the web. You want to personalize it, brand it encourage repeat business but you are left to your own efforts to bring in buyers and with all of that effort and hard work you have the privilege of paying eBay a ton of money. Please realize your store listing fees are more like hosting then they are marketing because your exposure is limited. In order to get buyers into your store you need to spend more money in core. Then if you do actually make a sale from your store eBay takes a hefty 10% of the sale. This amount is 5% less than Amazon charges in some categories and the same as Amazon charges in others – at least in Amazon your items show up in search.

Until eBay figures out what they are going to do with Stores my best advise would be – Stay Away! Once we see what they are ultimately going to be then you can make the assessment to open a store, or not, at that time. Do not waist your money right now.


Mountie said...

Hi Randy, I'd agree with you to a certain extent that eBay have never realised the full potential of eBay shops and are making too may changes. However I'd disagree with new buyers not opening a shop straight away.

A shop (sorry store in the US) gives you so much more than simply SIF listings which are the main thing eBay tinker with. You should use your shop for branding and more importantly to control your buyer in the way that benefits you most.

A while back I wrote a couple of guides covering the benefits of shops - Setting up shop on eBay and for advanced shop owners The Buyer Experience which explores how to guide a buyers behaviour to perform the actions you want them to take.

For anyone considering closing (or opening) a shop I'd strongly recommend reading the second half of "The Buyer Experience" starting from the title Dynamic Shops - Control your Buyer"

For just £6 a month a shop is worth every penny even if you don't list a single shop inventory format listing!

Randy Smythe said...

Chris, unfortunately Stores/Shops are much more than the £6 or $15 US. With the 5 or 10 cent (US) listing fee and the 10% FVF there are so many other options available and most of them actually have a shopping cart.

Because of the lack of exposure and uncertainty with eBay Stores/Shops, Yahoo Stores have become a valid alternative at least in the US and eBid Shops should be considered in the UK.

I just cannot recommend opening an eBay Store/Shop at this time.
IMO, there is too much uncertainty with eBay Stores/Shops to make it worth opening one right now. Hopefully eBay figures out what they are doing and I can change my opinion.

Mountie said...

You missed my point Randy... Forget about store/shop inventory format. Forget about listing and FVF.

Start out as a seller using just Auctions and Buy it now listings. Now look at how an eBay shop can help you market those listings better. Rather than replying on the eBay standard "View sellers other item" layout having a store allows you to define the experience the buyer will have, define which products will be presented, whether they're presented with just auctions, just BINs or a mix etc. You also get email marketing and a whole host of other tools.

The one aspect of shops people complain about is the SIF prices and changes so ignore them. Just don't use shop inventory format! Use the other features of your shop which cost a minimal amount a month but can increase you sales if you put a little work in :-D

Randy Smythe said...

Chris, you are correct, I did miss your point. I would agree with that regard completely.

So, yes if you are going to be selling product in core it is well worth the £6 or $15 for a Store/ Shop to help you merchandise and manage your core listings.

That is eBay's preference as well.