Please do not get us confused, we absolutely love eBay. It is an incredible marketplace that can be very profitable for both new and veteran sellers. However, over the years, eBay has become less seller-friendly. Not being able to leave buyers negative feedback in transactions is one thing but what we are most concerned about is eBay's fee structure. As of today, October 2nd, 2012, eBay charges a 9% final value fee for auction-style listings and even more for some fixed-price listings. They also charge an insertion fee on each item. Then you also have to consider that just about every transaction is processed through PayPal, an eBay company. PayPal also takes 2.9% of your money plus an additional 30 cents. Add up all these fees and you're looking at an average of 13-15% in eBay fees for every item you sell!
We are big advocates of selling on our own stores to avoid eBay fees. You can set up your own store and start competing with the big boys like BestBuy.com, SunglassHut.com, and others within minutes. This can be done by purchasing what is called a shopping cart. Many of you have shopped online before and seen the term "add to cart". If you have seen that before, you have been on a site using a shopping cart. Shopping cart services will set you up with your own Website and allow you to easily add products and accept payments on your own domain name. They will host it for you, provide secure checkouts, and even help you promote it, usually for a low monthly fee. For instance, we pay a flat $100/month fee for our shopping cart services. There are no additional transaction fees per order aside from the credit card processing fees which average about 2.5-3%, similar to PayPal fees.
You might look at the above fees and still wonder how it is cheaper. Consider this... What eBay is essentially doing for you is marketing your products, that is what you are really paying for. With your own shopping cart, you must promote the products yourself which can be costly. However, let us consider a return customer. Just like you have eBay customers that come back and buy from you on a regular basis, you will have customers that will return to your eCommerce store. However, each and every time your repeat customers buy from you on eBay you are hit with that 13-15% charge. Once you spend the money to attract customers to your eCommerce store, as long as you give them a pleasant buying experience you will not have to spend any more money on attracting them to make a purchase. From that point on your costs on that customers future transactions are limited to the credit card fees and the monthly service fee for your site. Statistics show it is 7 times more expensive to obtain a new customer versus hanging on to those that are already customers!
You can see from the example above that although eCommerce stores tend to be a costly initial investment, they will pay big dividends down the road. We highly recommend investing in a storefront as early as possible. After trying several of the most popular eCommerce solutions, we opted to go with 3DCart.com. We highly recommend their services, you can learn more about them here.