Chapter 1 The eBay Marketplace: Opportunities for Ecommerce Shops + eBay Statistics

Online marketplaces keep growing in popularity as an ecommerce strategy.

From a seller’s perspective, they are capitalizing on an existing flow of traffic to get their products in front of more eyes without having to first increase brand awareness.

From a buyer’s perspective, it functions much like a big-box store — it’s a one-stop shop for everything they need, and the presence of competition can help keep prices low.

Founded in 1995, eBay was one of the first online marketplaces – and it has remained a major player ever since. Though Amazon sees about three times the annual gross merchandise volume (GMV), eBay is still the second leading marketplace in the U.S.

What is the eBay Marketplace?

eBay was founded by Pierre Omidyar and, unlike Amazon, it was built to be a true peer-to-peer online marketplace. Its initial focus was on connecting buyers with online sellers of used or collectible items in auction-style listings.

In the past decade, however, eBay has shifted more towards fixed-price “buy it now” listings, which encompasses most of its sales. You can find anything from collectible baseball cards to brand new cars on eBay.

eBay Statistics to Make Any Seller’s Head Turn

By 2020, analysts predict that 40% of the online retail market worldwide will be through online marketplaces. That alone is reason to at least consider the pros and cons of standing up an eBay store as one of your sales channels.

Here are a few more reasons why you may want to consider getting onto eBay.

1. Over 1 billion active listings.

While eBay started out as a marketplace primarily focused on vintage and collectible items, today you’ll find that the majority of items listed are brand new. These listings aren’t all posted by individual online sellers anymore, either, with large and small businesses alike creating eBay stores to take advantage of the marketplace’s high traffic.

2. Over 180 million active buyers.

Of shoppers surveyed in 2017, 16% say they shop on eBay about once a week or more. In December of 2018, eBay garnered 109 million unique visitors, putting it behind only Amazon Sites and Walmart in the thick of the holiday shopping season.

3. In the past year, eBay generated over $10 billion in revenue.

The peer-to-peer business model on which eBay built its platform connects buyers and sellers, but eBay earns money through listing and transaction fees and marketing services. eBay has also heavily invested in several successful companies like PayPal (acquired by eBay in 2002; the companies split in 2015) and StubHub (acquired in 2007).

4. About 2 billion daily transactions.

With numbers like this, the impact of eBay’s marketplace cannot be denied.

As of September 2018, eBay was the second most popular ecommerce property in the U.S. based on time spent on-site. The average session duration was just over eight minutes.

5. 35–64 year olds make up 61% of eBay’s audience.

Younger Millennials and Gen Z haven’t flocked to eBay in the same volume as audiences who remember when the marketplace launched and catapulted to popularity. But if you have a significant Baby Boomer or Generation X target audience, eBay could be an important place to reach them.

5 Reasons to Consider Listing Products on eBay’s Marketplace

Whether you’re an established business considering eBay as a new sales channel, or you’re thinking of breaking into ecommerce, there are some good reasons to choose eBay — if it’s right for your customers and your business goals.

1. Free traffic.        

With 180 million active buyers, your listings have a huge potential for broad visibility as long as you can get your listings to rank highly. Since shoppers are already visiting the site, you can focus on product page optimization over customer acquisition.

2. Less up-front work.

Building your own ecommerce store — even with an easy-to-use platform like BigCommerce — is a significant time investment. Listing your products on an eBay store can be a way to get off the ground more quickly.

3. More brand authority.

eBay provides more opportunity for branding than some other online marketplaces, with a customizable storefront. This will bolster your brand-building, as well as convey authority to potential buyers. Amazon doesn’t offer the same branding potential, so while you may be making sales, purchasers there don’t have the opportunity to connect with your brand in the same way as they can on eBay.

4. Different revenue streams.

Products sell differently in different markets, and each marketplace will offer access to a unique target audience. You might find that the users who frequent eBay are more likely to buy your products. You can also test out new products in the marketplace to get an idea of how they may be received.

5. Risk mitigation.

Selling products through a marketplace gives you a bit of insurance if disaster strikes your ecommerce site. If your site goes down for a down for a significant period of time, you can still be earning revenue through your eBay listings.

eBay Pros for Ecommerce Sellers

eBay is obviously a highly successful online marketplace, but you will have to determine if it’s the right place for your products. Here are a few advantages to using eBay to reach your customers.

1. Prebuilt infrastructure.

Going back to the point of having less up-front work, you can be up and running on eBay just minutes after signing up — they’ve done all the heavy lifting for you, so you can focus on marketing your product.

2. More options to control your listings.

eBay has had a lot of time to optimize its product listing format, with great options for photos, descriptions, and more when setting up a listing. Take advantage of the time they’ve had in the market and leverage their best practices.

3. Auctions can drive prices higher.

Even if you have your own ecommerce site, you likely have fixed prices on your products (not counting promotions and discounts, of course). But the ability to auction your products on eBay can tap into shoppers’ competitive nature and drive prices — and profits — higher.

4. Variable fees.

Fees are, for the most part, based on what you sell. If you want more than just a basic account, you will pay a monthly fee for that, but every account type gets a certain number of listings per month for free.

Once you’ve exhausted any free listings, you will pay an “insertion fee” for each listing thereafter. From there, fees are charged per transaction, so eBay will get a portion of the cost of each product you sell — which they term the “final value fee.”  

5. Flexible shipping and return guidelines.

As a seller on eBay, you’re able to set your own shipping and return policies and associated fees. While there are some established limits (e.g., a 14-day or greater return window), Amazon’s equivalent policies are much stricter.

eBay Cons for Ecommerce Sellers

Every business — and what each needs to be successful — is going to be different. We’ve looked at some of the possible advantages to using eBay as a sales channel, but here are some of the possible disadvantages that you need to be aware of before taking the plunge.

1. Less control.

“Wait, I thought you said you get more control on eBay!”

Well, control is relative.

Compared to other marketplaces, eBay gives you a lot more flexibility in representing your business and your products. But compared to controlling an entire ecommerce store that’s all your own — eBay is, of course, going to be more restrictive.

In some cases, this is a benefit, but unlike with your own site, you can’t control many factors of a listing. Because you’re working with that prebuilt architecture we talked about, you will have to fit your content into its existing parameters.

2. More competition.

On your own ecommerce site, you’re only competing with (and against) yourself. On the eBay marketplace, you’re competing with a whole host of other sellers. Remember — eBay has more than a billion active listings! One of your biggest tasks when selling on eBay will be to find ways to differentiate yourself from the competition.

3. Limited support.

On your own ecommerce site, you can leverage any number of methods to communicate with your customers. On eBay, you can only use their messaging platform. This can be an issue if you’re trying to scale your customer support or manage a number of communication channels with a lean staff (or just yourself!).

4. Variable fees.

Yes, this is listed as both a pro and a con — and it’s highly dependent on your business.

While the variable fees likely won’t be prohibitive to your profits, it’s still money spent that you don’t have to pay when selling through your own website.

A couple of other things to remember about eBay fees:

• The insertion fee you pay to list your products applies per category, so if you’re listing a product in multiple categories, you will pay an insertion fee on that listing twice.

• Insertion fees are non-refundable, so if your product doesn’t sell, you’ve actually lost money.

• You’ll pay a final value fee on both the price of the item as well as its shipping. And if a buyer doesn’t pay, you’ll have to work with eBay to get your final value fee re-credited to you.

5 Tips for Selling Items on the eBay Marketplace

Once you weigh the pros and cons, it will be time to decide whether or not you’ll take your products to the eBay marketplace. If you do, here are some strategies you can use to help ensure your success.

1. Research your competition.

To succeed against the high volume of competition on the eBay marketplace, you have to know what you’re up against. How many sellers are listing similar — or the same — products as you, and how can you differentiate yourself? Make sure you’re looking at pricing, too: your competitor could be selling 10 times more because they price it a dollar cheaper.

2. Rack up great reviews.

Buying items through a marketplace isn’t the same as purchasing from a tried-and-true business, so it can be a little bit more difficult to earn customer trust. Reviews serve as a signal of trust and authenticity, which is critical to building your brand as a seller on eBay.

And, of course, the reviews need to be stellar. Make sure you’re meeting — and exceeding — your buyers’ expectations. Reviews can make or break you as an eBay seller, so you have to do everything in your power to ensure a 99%+ satisfaction rating.

3. Ship faster than your competitors.

In the era of Amazon Prime, consumers’ shipping expectations have risen significantly. Fast shipping for free is the gold standard for selling on eBay and can give you a leg up on your competition.

4. Be mindful of fees.

Fees add up quickly, and some add ons can add up to a couple of dollars per listing. Make sure you take these fees into account when pricing your eBay listings.

5. Sync your website with your eBay profile.

If you run your own ecommerce site outside of eBay, syncing it with your eBay profile can have a high reward when it comes to business operations. This will enable you to keep your inventory, shipping, and distribution management all in one place, leaving less room for error.

BigCommerce syncs easily with eBay, offering automated product updates and centralized inventory management. With this native BigCommerce integration, you can manage your eBay sales channel through the BigCommerce platform.

Summary

Whether you’re fleshing out your omnichannel sales strategy or taking your products to market for the first time, you should consider the advantages (and disadvantages) of selling on the eBay marketplace.

If you choose to do so, you’ll have the opportunity to put your products and your brand in front of millions of active users who shop on eBay and, ideally, generate new revenue streams. With the marketplace’s provided infrastructure, you can get off the ground quickly, while still retaining enough control over your content to exhibit your brand identity.

But it’s not the right choice for every business. While you have more flexibility with eBay than with some other marketplaces, it’s not the same as having your own ecommerce site that you fully control. And, while the seller fees that eBay charges are relatively low, you do need to keep them in mind as you strategize your marketplace presence.

Incorporating eBay into your selling strategy will take some work, but many businesses have found it very successful. Make sure you research your competitors so you know the landscape you’re getting into, then provide great service and support — including fast and inexpensive shipping. As your positive reviews increase, so will your potential opportunity.

Although managing another sales channel can add complexity to your business, syncing your eBay product listings with your ecommerce site (remember, BigCommerce integrates with eBay so you can manage everything in one place) can make your life much easier. Read on to learn more about the ins and outs of selling on eBay and how to decide if it’s right for your business.