Every now and again I get asked to comment on eBay and ecommerce. A request a few weeks ago, resulted in a quote in The Independent. But as ever, I submitted much more than was used. So here is the Q and A in full:
Has it become easier or harder to make money on eBay now it has become so popular?
eBay has killed auctions. Businesses that want to get started on eBay need to concentrate on fixed price (Buy it Now) sales from day one. eBay is also increasingly favouring big businesses and even high street names: originally the home of small businesses online, eBay is making it harder for SMEs to find an ecommerce toehold as it pursues profits. The way that eBay is charging business sellers favours those with higher turnovers and the new way items are displayed in search results benefits sellers with a longer track record. It can take months for new eBay sellers to compete effectively these days on what was once a level-playing field.
Budding eBay sellers should also know that eBay is losing its share of ecommerce. Don’t put all your eggs in one basket. Yes, eBay continues to deliver sales and customers but also think about Amazon which is growing more quickly.
What are the golden rules for people looking to set up an online business?
Measure everything. Understand what’s working and what’s not. Examine your sales and web traffic so you appreciate where to direct your efforts. What’s selling best with the best margins? Too many newbies waste time on unprofitable lines.
Be organised. Keep records, track stock efficiently, despatch quickly. Chaos is time consuming and time is money. So try and be ruthlessly ordered in everything you do.
Be professional. Your business might be online and operating from home But don’t let the fact you’re in working from the spare room in your pyjamas dent your professionalism. Your customers deserve the best regardless.
What are the most common mistakes they make?
Lot’s of fledgling sellers forget costs, margins and profits and concentrate on turnover. It’s easy to look at your sales total and be satisfied but once costs are taken into account (and that includes tax) the profits can be small or even non-existant. Also, factor your own time into your costs. It’s the most valuable commodity you have.
Any trends/other comments that might be relevant?
Plan long term from the start. eBay is just one opportunity but selling online is best done using multiple channels. Opening a webshop of your own, using Amazon and other outlets, as well as Google to advertise, are all well trodden paths to ecommerce success. Even in the recession, online retailing continues to grow so there is a huge opportunity for anyone who wants to have a go.
One of the most attractive aspects of starting a home ecommerce business is that you don’t need massive funds to get started. At a time where banks are reluctant to lend, you only need a few hundred pounds to get started.