ecommerce posted in ecommerce  on 23 June 2010
by Andrew Lang 
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puresilva Website V Selling With an eBay Shop

This is a bit of a false dilemma of course as you don't need to choose between :-
  • Selling with a puresilva website OR
  • Selling on a platform like eBay
....you can sell on both of course, but let's compare the two.

Costs

puresilva website
250 purchase cost for the website + 99 per year. You'll also pay a payment provider for each transaction e.g. PayPal is 1.4 - 3.4% of the transaction of the cost + 20 pence. No other costs.

eBay shop
You pay between 14.99, 49.99 and 349.99 per month (reference) for your shop depending on what type of shop you want. The more expensive anchor shop (349.99) gives you more exposure of your products on the eBay platform. You'll also pay a commission to eBay - and this part is rather complicated as to how much you pay - but typically it's at least 9%. You also pay between 1p and 20p per listing. Finally you pay a PayPal tranasaction fee on top of all this of between 1.4 - 3.4%

As you can see, it's very complicated to work out exactly your profit margins with eBay. You'll need to really be careful here as how much commission you pay depends on the type of product you sell.

Shop capacity

puresilva website
No limits on number of pages or products, or hard disk space used

eBay shop
You are allowed between 5 and 15 custom pages, and up to 50Mb space for files (15 custom pages + 50Mb applies to the 349.99 per month Anchor eBay shop).

No. Of Visitors From Day One

puresilva website
Zero. You start from scratch as all new websites will do. If you want instant traffic, you'll need to pay for it via Google Adwords. However, over time your traffic will build up as your rankings improve.

eBay shop
This is where eBay is very good - and why many people sign up to eBay: eBay already has a lot of traffic.

Profitability

puresilva website
Once the site has been paid off (250), it's essentially 8.25 per month after the first year (as the first year includes hosting costs) - that's it - no more costs to calculate. So profit margins are quite easy to calcuate in terms of website running costs. Another key point is that shoppers will pay more for products sold on individual e-commerce websites than on a platform like eBay because they don't have the distraction of your competitor's products at lower prices.

puresilva pricing has gone DOWN over the years (in 2004, a puresilva website template was 695, hosting 150 per year, in 2010 it's 250 for a website + 99 per year hosting) so the danger of your current profitability being reduced by increased costs is not going to happen.

eBay shop
As mentioned earlier, eBay has many individual and varying costs that can not only mount up, but make it difficult to determine the profit margin for each and every product you list. Couple that with the fact that people can so easily compare your competitor's products on the very same page as your products (and often opt for the cheapest), and you can find yourself competing with price just because everyone else is.

Branding and Reputation

puresilva website
As you run your own site, you can much more easily be identified as a brand in your own right. You look more reputable with your own website with unique, interesting content on it.

eBay shop
For sure, you can build up your positive customer feedback, become a "power seller", but you are still running an eBay shop, with your eBay URL. In that respect, it's very hard to brand and market your business outside of eBay. People see you as A N Other eBay shop. That means you're 100% limited to your eBay reputation and on eBay's traffic. What if eBay takes a 10% dip in traffic? What if it's more? You can do nothing about it.

Control Over Your Online Business

puresilva website
You are not limited to how much content you add, and you can add any kind of content (so long as it doesn't break any UK laws where our servers are located). You're not limited to PayPal as a payment gateway either (puresilva supports PayPal, Google Checkout, eWay, SagePay, CardSave,WorldPay and Nochex, as well as take cheque / BACS payments) and your traffic levels are 100% related to your marketing efforts.

eBay shop
You are reliant on eBay's reputation and current traffic levels to bring you customers (as mentioned above) and are very limited in regards as to how much content you can add to your shop.

In the Long Run

puresilva website
Starting out with a puresilva website can be a bit frustrating if you've come from eBay. eBay gives you instant traffic, whereas your own website means you start from zero in terms of visitor traffic (unless you go for Google Adwords and pay for clicks to your site). What's more, you need to spend a few months of link building and content creation to get initial traffic coming in - it seems like a fair amount of work for little reward.

However, your visitor stats will increase steadily over time in relation to how much marketing you put behind your site (link building / word of mouth). Your running costs are far lower, and profitability is much much better than an eBay shop, and once you have steady traffic, you have a reliable, very profitable site. What's more, you can properly build your own brand and business with your own website - a place that can be recommended and returned to by repeat customers. It's a place where you can expand your business without being punished for doing so (with more listings fees on eBay).

eBay shop
eBay gives you instant traffic to your shop, but you are forever competing directly with competitors so over time you're likely to sell the same items for lower and lower prices. Meanwhile with eBay's complex fees, it's very hard to know your profitability levels in the future if even one of these fee variables change. You can't really brand-build with an eBay shop.

Conclusion

There are advantages and disadvantages to both e-commerce platforms. eBay gives you instant traffic but that comes at a literal cost. Your own site requires more patience to start with, but in the long run can be much more profitable and cheaper to run.

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