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eBay Business Opening a Storefront Pros and Cons

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One of the great things about eBay is that it offers almost anyone who can use a mouse more then just a venue to present auction items at a fair price. It offers tools, advanced selling features, communities and even free training to help you make the most out of their offerings - one of the greatest of which for a small business owner is the ability to set up an eBay store. Not only is the eBay store a wonderfully inexpensive way to get into online sales and have an actual storefront with an Enterprise-level backend support, but it can save even moderate eBay sellers a substantial amount on their listing fees: in many cases even paying for itself!

What is an eBay store?

An eBay store is exactly what it sounds like – an online location for your business where you can list items that you have for sale and can advertise and promote using various tools. There are several different ‘subscription’ levels which provide you a varying amount of catalog space and emails and at the higher rates even 24 hour customer support. In the past ten years eBay has come to represent over 10% of the entire world’s ecommerce sales, and as such is a valuable resource as a storefront. What this means is that many of the eBay Power Sellers will actually list items below the cost on their normal web sites just for the advertising and marketing power that having their goods listed on such a huge market can bring.

Introduced in 2001 as a way for sellers to cross sell products the stores at that time were not very popular but with the shift against advertising websites on eBay being enforced more and more utilizing eBay stores became much more popular since you can cost-effectively advertise your product lines and brand name in this manner.

Getting the benefit of an eBay store means sellers have to pay a subscription fee, and still have insertion, final value and option fees although at a reduced cost for items in the store. A recent change that further enhances the store’s capabilities was to allow searches to list eBay store entries if less then ten auction listings are found for a search query, and to allow for almost complete customization making it even more attractive to have an eBay store then to run a standalone website.

Subscription Levels

There are basically three levels of stores that you can subscribe to, based on your needs. They break down to:

  • Basic Store

This is the least expensive option and allows you up to five catalog pages, the ability to send up to 100 email newsletters a month and is a good way to investigate online sells.

  • Featured Store

The Featured store has twice the catalog pages and allows you to send up to 1,000 newsletters a month – it also provides access to several sales report tools and summaries to help you keep track of how your business is doing.

  • Anchor Store

This is the highest level store which offers pretty much all the catalog space and newsletter emails you care to utilize, as well as 24-hour customer support.

NOTE: Both Featured and Anchor stores also have several “promotional dollars” they are given to spend on eBay keyword advertising on a quarterly basis. Keywords allow searches such as “motorcycle” to return your store banner if you purchase rights to that keyword.

Pro’s of an eBay Store

For regular auctions that run from 7 to 10 days and average a cost of .35 cents each the same item can be listed for 30 days in an eBay store for only .02 cents!

With insertion fees as low as $0.02 and maxing out just over a dime and the ability to have any quantity of items with a single listing the eBay store is obviously a bargain for volume sellers. Final Value Fees still apply, but the savings over a normal listing can be substantial!

Con’s of an eBay Store

The addition of the monthly subscription fee can increase costs to low or mid-volume sellers if they do not sell enough items to make it up in listing savings.

Your products will not show up in regular listings, and will only show up in searches if ten or fewer hits from regular auctions are found.

Deciding if it’s right for you

The best reasons to have an eBay store is to reduce your costs on listing fees, and to allow buyers who want an item now and can’t wait for an auction to end to find and use your stores “store listings” just as they would a retail outlet. You effectively are tapping into the huge market eBay has created and redirecting customers who are searching for a bargain to an immediate sale type of transaction.

Surprisingly studies have shown that eBay store traffic sales conversion rates vs. normal website hit vs. sales rates range from 19% to 1100% greater! This means that over 2% of the people visiting an eBay store will make a purchase, which is more then three TIMES the normal conversion rate on most websites. In terms of return eBay stores are simply one of the most cost efficient ways of creating an online store that are out there today.

Since eBay allows you to customize the HTML and can incorporate eBay into a back end database system eBay is rapidly becoming more then just an auction site and eBay store center, but is approaching the nirvana on ecommerce and becoming “the” engine to drive online sales.

With reduced costs in designing, tracking and marketing an eBay store and the entire functionality of eBay’s enterprise-level platform to back your business as well as the market recognition and acceptance that eBay has come to have there is little question that eBay stores are valid resources for many if not most high volume sellers.

Types of Goods

High dollar and one of kind items are not really what you open eBay stores for, although savings on listings fees even when using the Auction format will often pay the difference. Successful eBay stores list items that you expect to sell in quantity, and for which you intend to maintain numerous listings at any given time. Since the final value fee (FNF) still applies having the added cost of an eBay store for items that you will only list once or twice and that may sell for a high price simply doesn’t make sense, especially in light of the item not showing in regular listings if it is in an eBay store. However, goods such as office supplies, electronics, import goods or any other high-volume mid to low-priced item that you are going to be selling in quantity is ideal for selling in a store.

One feature that should be used when listing items you intend to keep as a store inventory item if the “Good unTil Cancelled” or GTC option, which will re-list the item after the 30 day listing is up automatically until the available quantity is all sold. There is no fee for using the GTC feature, but it needs to be selected during the initial listing as it cannot be applied to existing listings.

Qualifying

Unlike the difficult and sometimes overwhelming work you have to do to qualify for small business loans and renting storefronts starting an eBay store is simple. All you really need to qualify to open an eBay store is a valid seller’s account and one of the following:

  • A feedback score of 20 or higher

  • Have been ID Verified

  • Have a verified PayPal account in good standing

Costs

The subscription costs vary dramatically for the three tiers, as one might expect, but unlike most auction and online store companies out there eBay has priced it’s entry level at a low enough price that anyone, even the part-time eBay seller can take advantage of it. The basic store is priced at less then $16 a month, with those needing to support a medium business aiming to the more standardized pricing and features of the Featured store which runs about $50 a month. If you need all the bells and whistles and have high-volume sales then you will be looking at fees of almost $500 a month for the Anchor store, but the savings in listing fees alone may more then make up these costs!

All three levels also offer sales management tools which cost an additional $5 a month for the basic service, and $16 a month for Featured and Anchor stores.

Feature Comparisons

If you like the idea of an eBay store but wonder just what it is you get for the money a basic feature comparison chart for the three levels can help you make up your mind. While eBay have a complete listing online, the basic differences most commonly researched are detailed below:

Feature: Support






Basic

Featured

Anchor

Customer Support

M-F
6am - 6pm PST

“ “

24 hour support

Customizable pages

5 pages

10 pages

15 pages

eBay Header Reduction


Free Sales tools

Selling Manager

Selling Manager Pro

Selling Manager Pro

Picture Manager

1 MB free

1 MB free $5 off subscription

1 GB free, & free subscription

Traffic Reports

Advanced data

Advanced data

Working with an eBay store

When you do start your eBay store you should be sure to take full advantage of all the features and options that you are paying for – you should also seriously consider paying for keywords to get your store noticed. Important facts to remember about your store that need to be worked around or taken advantage of include:

  • Items posted may take as long as 24 hours to appear

  • Listings can each have multiple items and take advantage of “Auction Style,” “Fixed Price,” and “Store Inventory” features

  • Tools like TurboLister2, Selling Manager Pro should be used for bulk listings

  • Take advantage of customizing your storefront via the “Store Design” option in the left hand column of the “Manage My Store” page

  • For goods you will always have available consider using the “Good Til Cancelled (GTC) feature that will re-list every 30 days so long as there is a quantity still available for sale. NOTE: The GTC needs to be selected upon adding the listing and cannot be added to existing listings.

  • Take advantage of “Store Referral Credit” offers to save additional amounts on your Final Value Fees by advertising outside of eBay.

  • Group your listings in store categories, of which you can have a total of 300 spread across 3 levels.

  • Take full advantage of your Email Marketing tools and newsletter mailing lists to advertise specials, new products and encourage buyers to visit your store on a regular basis.

  • If you have the Accounting Assistant feature consider switching to or using QuickBooks Pro, Premier or Enterprise editions of 04, 05 or 06 so you can take full advantage and automatically download data to your home accounting software.


Linking Outside of eBay

Obviously links in listings inside of eBay can draw eBayers to your store, but some simple to implement methods to enhance visibility outside of eBay exist as well. Some no-cost solutions that you can start immediately include:

  • Adding your store URL to your stationary, outgoing email and business cards

  • Placing links to your URL on your business home page or other web sites that you control

  • Consider using programs like AdWords from Google or paying to list your business URL with search engines

Useful Links

To find out more about eBay stores or read articles and information regarding this exciting feature please check out the following sites. NOTE: You may need to already be registered with eBay or have a store to access some links:

eBay Store Info Page

eBay Store Pricing

eBay Traffic Reports

Promoting your eBay store

Discussion Forum on eBay stores

Effectiveness of eBay Stores in Online Sale


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