Auction listing websites were one of the first opportunities in the 1990s where buyers and sellers could initiate transactions without the need to be on a third-party platform. Because these were the days of dial-up modems, it was necessary for each operation to be as simple as possible. That would become the foundation of eBay as early as 1995.
As the platform evolved, so did the experience for buyers and sellers. The company introduced seller feedback in 1997 to create an opportunity for members to rate their transaction. It was one of the first opportunities for there to be a virtual community where openness could lead to confidence. By 1998, eBay was able to cast aside its AuctionWeb moniker to start becoming the business that we know it as today.
Anyone can become a seller on eBay assuming that their account has not been banned by the platform because of a violation of the terms and services. You can sell personal items that are no longer needed. Businesses can list the products they have as a way to generate more revenues and attention to their brand. It is an engaging marketplace where you can find unique items at sometimes incredible prices.
These are the pros and cons of selling on eBay for you to consider if you’re thinking about this platform as a possible opportunity.
List of the Pros of Selling on eBay
1. You can take advantage of their scale immediately.
One of the most unique advantages of selling on eBay is that you can take advantage of the scale of the marketplace immediately. There are over 160, million active buyers on the website during any given month. That means you have access to a lot of potential customers, which can then translate to a higher sales volume for your business or individual sales effort.
2. It is an easy way to acquire new customers.
If someone is searching for your store, then they are not going to visit eBay as a way to finalize the transaction. What you do get to take advantage of by becoming a seller on the site is the added exposure of product discovery. Future customers might be searching for the products that you sell right now, and then discover them with your auction listing. This process gives you an opportunity to be competitive when that prospect might have purchased something from a competitor otherwise.
When you get an opportunity to have a customer come through the door on this marketplace, then you have the chance to create repetitive business through world-class service and fulfillment. That advantage is especially true for those who sell consumables which require frequent restocks.
3. Your products are where people prefer to shop.
When you are shopping in the marketplace as a consumer, then you are taking advantage of a location where there is strength in numbers. It feels good to have lots of choices to consider because that makes it easier to find the best possible product to meet your needs. This benefit is one of the best reasons to start selling on eBay. It allows you to join a community where there is an all-in-one aspect that draws people in because they prefer this shopping experience. If they find something that you’re selling at a great price, then that value transaction creates a positive impression that will keep them coming back for more stuff.
4. You can receive a higher price for your item.
When you sell products on eBay, then the auction listing format provides an opportunity to generate more revenue is for an item than if you sold it to a customer directly. Although this can mean that the highest better pays less as well, you will find that the exposure of a significant product can create additional interest in your brand items.
That translates to higher sales with the fixed-price merchandise you can list for sale on eBay with the Buy It Now option. Over 85% of the merchandise volume that goes through this marketplace every day is sold at a fixed price. 80% of the items that customers decide to purchase are new products instead of used ones.
5. It is effortless to become a seller on eBay today.
If you decide that an eBay storefront is the right way to expand your business, then you can get your first listings up and running in under 30 minutes. The first step is to sign up for an account if you do not have one already. Then you will need to become a seller, which gives you up to 50 listings for free, and then a per-listing charge for each additional item if you do not operate a store.
If you want to open a storefront on eBay, then there are five different options available.
- The starter tier is $4.95 per month, and it increases your zero-fee listings to 100.
- The basic store is $21.95 per month, and it offers 250 zero-fee listings.
- The premium store is $59.95 per month, providing more tools and lower listing fees.
- Anchor stores are $299.95 per month and suitable for high-volume sellers.
- Enterprise accounts are $3,000 per month.
Although you can operate a business as a non-store on this platform, you will not gain access to data insights that could help your business to grow. Choose the tier that meets your needs, and then you can start building your online presence with this marketplace.
6. The marketplace offers seller protections.
One of the disadvantages that eBay has always struggled with to some point is the decision of a buyer to abandon their contract of sale after an auction ends or they click the Buy It Now option. Consumers have 48 hours to pay for the item that they said they would purchase. If this does not occur, then sellers can open an unpaid item case. If it closes without payment from the buyer, then you receive a final value fee credit.
There are some steps you must follow to take full advantage of this policy. You’re protected if you ship an item within the stated handling time of the listing. Providing tracking information to the buyer before asking for help is necessary as well.
7. You don’t receive any competition from eBay.
When you decide to start selling on eBay, then you don’t need to worry about this marketplace trying to become competitive with the products you offer if they become popular. This sales platform does not sell any of its own products. That means shoppers are only seeing the items that are available from third-party sellers. There is no incentive to make things harder to find when you are active here compared to a site like Amazon.
8. It can provide you with healthcare access in the United States.
If you can earn PowerSeller status on eBay with your selling activities, then you can gain access to healthcare solutions for yourself and your company. If you have employees, then this benefit extends to them too. The marketplace works with Marsh Advantage America to offer several different healthcare insurance solutions that can include major medical plans that you may not be able to access on your own.
9. Almost anything can be sold on eBay if you’re willing to give it a try.
As long as your company is not trying to sell something that is illegal, then you can create a listing for almost anything with this marketplace. There are some restricted items that song business owners will need to take under consideration before signing up for their eBay store. You will find an extensive list of prohibited and restricted items that work to maintain the safety of the community. This platform complies with all local legal restrictions, which is why some products are entirely banned from the site.
10. You can create private listings as an eBay seller.
It is really easy to create a private listing on eBay, and it does not result in any extra fees either. You would begin the selling process as normal. When you encounter the “choose how you’d like to sell your item” area, then select the box that offers a private listing. This structure makes it possible to sell your listings to a specific demographic if sensitive goods are involved, you are selling an item that someone might give as a gift, or you don’t want your competitors to know the prices you can fetch for your items.
11. It is an open and transparent transaction.
Because of the feedback potential from each listing, you can develop a sterling reputation on eBay that can contribute to the chance at a sale because of your history of service. It does take some time to build this reputation, but it is open and honest so that other consumers will trust what people are saying about you. If you’re starting from scratch, then give yourself at least a year of positive feedback to see how this advantage can help you to secure consistency in your sales.
List of the Cons of Selling on eBay
1. There are numerous seller fees that you must pay, even if you don’t sell an item.
When you start selling on eBay, then you must become aware of the seller fees that are part of the transaction. You will receive 50 free listings per month, but then you must pay $0.35 in most categories for every other listing beyond that. Then there are final value fees that you must pay which can be as high as 10% for sellers. Some categories have even higher fees to consider as well.
2. Your final value fees are based on your reputation.
If your eBay account doesn’t meet or exceed the minimum performance standards in the United States, then the platform charges you an additional four percentage points on top of the standard final value fees that you all when the item sells. You must be an eBay top-rated seller or at an above-standard designation to avoid this additional cost.
Sellers that receive a high number of returns that are listed as shipping an “item not as described” in their service metrics are subject to this disadvantage too. Their final value fees increase by four percentage points for any sales that occur in those specific categories that are affected by the returns. Although the goal is to require sellers to offer an excellent experience to the buyers, it is possible for some people to game the system in a way that causes sellers to pay more even though they did everything right.
3. There is limited control over your listings.
It is essential to remember that market places don’t exist to help you as a seller. Their first priority is to help themselves. When working with eBay, they want to make sure that the focus is on the products in each listing instead of the sellers. That means they can decide to restrict how much you can brand your presence on each item that you sell. There are also specific ways that you might need to communicate with customers. There is also the potential for the platform to cancel your listing at any time.
4. You will face significant competition on this platform.
There will be numerous competitors inserting listings on eBay for the same reasons that you were thinking about doing it right now. Although there is an opportunity to gain additional exposure for your brand messaging, it is not unusual for this effort to get lost in the white noise of information overload. There could be thousands of listings for similar products on this platform at any given moment, making it a challenge to stand out from the rest of the competition. That’s one reason why upgrades were introduced by eBay, but that advantage comes at an extra cost too.
5. It can be challenging to keep your inventory in sync.
When you are selling products on eBay, then this market place becomes the second point of sale for your business. It is also one that is not always configurable to your inventory’s shopping cart. If you have multiple draws on your numbers that are not speaking with one another, then you are forced to go through a higher level of manual reconciliation to ensure that your figures are accurate. This disadvantage also creates the possibility of running out of an item if a surge of interest occurs before you can stop the sales process.
6. You will be working with bargain shoppers frequently.
The reputation that eBay has is that it is a platform where you can find some pretty good deals. Bargain hunters are everywhere on this website. You will find that there are people who will pay a fair price for a rare collectible, but there are a lot more who want to have the cheapest possible transaction – and can be somewhat rude with their negotiating skills. If your business sells expensive items, then you might discover that this platform choice is not the best option for you.
7. You must have a way to ship items within 24 hours to be successful.
If you are selling a customized item on eBay, then you are exempted from this disadvantage. For everyone else, this marketplace rewards the sellers who can ship their items after purchase in 24 business hours or less. When you do not offer this possibility, as a business or an individual, then your listings will have less visibility in the search results presented to a potential customer. This situation creates another circumstance where selling on eBay might not be the best choice.
8. The website goes through different periods of change outside of your control.
Because eBay is a marketplace that tries to be beneficial to as many people as possible every day, there are times when the improvements that the site makes can become a disadvantage to your business. You must be able to change your business model quickly and adapt to these changes if you want to continue experiencing profits on this platform. The reason why the company changes things is to offer benefits to everyone. That means you are placed in a position where you must trust eBay to have your best interests in mind, even though as a marketplace, it is their best interests which take the top priority.
9. Selling on eBay could change your tax structure.
If you are only making a few bucks from a side hustle that includes selling items on eBay, then this disadvantage may not apply to you. In the United States, if your earned income is more than $5 when you are married and filing separately, then you must file a return. A 1099-K is filed on your behalf if your revenues reach a certain amount on the platform or you conduct 200 transactions or more. Because you are selling products, the collection of a state sales tax might be necessary as well. You will want to talk to your tax advisor if your listings are generating significant revenues.
The pros and cons of selling on eBay create an opportunity for anyone to become a small business owner thanks to the various structures that are available in this marketplace. You can choose to operate a “non-store,” subscribe to have your own presence, or scale to an enterprise-level opportunity if needed. Although there are challenges to consider when selling here, many companies find that the small costs are an affordable way to expand their brand’s messaging.
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