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.


Sue said...

I have to agree with all of that :-) Some experimenting I've been doing with my own stores suggests that there is something fundamentally broken with Finding on eBay at the moment.

For *some* of the indicators I'm using - visits to both my core listings and shop front are way down, but page views within my shop are way up, and ASP is up too - which suggests to me that buyers can't find me, but that they like me when they do.

I know I keep saying in your comments that Shops/Stores (or Boutiques as they are on eBay France - how cool is that!) are such an underutilised resource on eBay, but I live in hope of someone from eBay actually listening to what we're saying... hopelessly optimistic though it is :-D

Randy Smythe said...

Sue, apparently from what I am hearing from various sources. Stores/Shops were going to be the future of eBay until roughly 12 months ago when management changed their mind.

Current management made an All-in bet on CORE and 2007 will be the year that makes or breaks this plan. It is going to be a bumpy ride through the end of the year at least.

It is best to plan alternatives.