- Building an Online StoreWhats Involved?
- Pros and Cons of Running Your Own Website
- Does an Online Store Make Sense for Your Business?
This chapter is from the book
This chapter is from the book
This chapter is from the book
Pros and Cons of Running Your Own Website
When you’re slave to the eBay marketplace, running your own online store certainly looks attractive. But is the grass really greener on the other side of the fence? Not always, as you’ll see.
Pros of Running Your Own Online Store
There are many benefits to being your own boss, which is essentially what you get when you run your own online store. Here are some of the good points:
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You create your own business identity. This is a big one. When you sell on the eBay marketplace, you’re often viewed as just another eBay seller, no matter how hard you try to establish your own identity. It’s even worse on Amazon, where you’re just an anonymous face behind a simple product listing. But when you create your own website, you’re not part of any marketplace—you’re not an eBay seller or an Amazon seller, you are your own business. You can establish your brand however you like, and you can build your own business on your own name.
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You pay fewer transaction fees. Well, at least you might, depending on how you do things. eBay sellers complain about being nickel-and-dimed to death with eBay’s various listing and final value fees—not to mention the ever-present PayPal fees. So it’s a quarter here and a few percent there, but it adds up fast. It’s tempting to think that running your own website means escaping all those annoying and costly fees, and that’s mostly true. While you can’t fully escape all fees (you’ll still have to pay a fee for credit card transactions), it’s likely you can at least reduce the per-transaction fees you pay.
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You’re not beholden to a marketplace’s rules. Many sellers chafe under eBay’s various rules and regulations. You can’t do this, you have to do that; you’re not really in charge of your business—eBay is. Well, when you’re running your own website, you’re not beholden to anyone but yourself. You make up the rules, you run your business as you please. You’re finally free!
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You’re not held hostage by a marketplace’s feedback policy. Here’s something else that many eBay sellers find particularly annoying: A few cranky customers can completely ruin your feedback rating and perhaps force eBay to drop you from the marketplace. (And you can’t even retaliate with negative feedback of your own!) Well, moving to your own website means that you deal with dissatisfied customers on your own terms, not on theirs. (Or on eBay’s, for that matter.)
In general, moving from eBay to your own online store means freedom—freedom from rules and regulations, freedom from control, freedom from fees. There is a price to pay for this freedom, however—which is one of the cons we discuss next.
Cons of Running Your Own Online Store
If running your own e-commerce website was so great, everybody would be doing it—but everybody isn’t. All the benefits of running your own online store are counterbalanced by a few negatives, including the following:
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It’s a lot of effort—both upfront and on an ongoing basis. When you run your own online store, you have to do everything that eBay does—and that’s a lot. In fact, you don’t really start to appreciate eBay until you have to do it all yourself. You may find that it’s worth paying a few eBay fees to receive all the benefits you get from the eBay marketplace. In any case, get ready to start putting in longer hours when you’re running your own shop; a lot of time and effort is required.
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There may be substantial upfront costs. Depending on the route you go, you may have to invest a substantial amount of money upfront to get your site up and running. If you go completely from scratch (that is, eschew the prepackaged storefront approach), you could spend $10,000 or more to create a unique and fully functioning website. That’s not small change, folks.
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There may be ongoing fees. Let’s say you don’t have all that money to invest upfront. Instead, you go with a prepackaged storefront or contract out for various prepackaged e-commerce services. This lets you get into the game without a big upfront investment, but instead you have to pay ongoing monthly fees to use those services. Sometimes the fees are a flat monthly subscription, sometimes the fees are a commission on what you sell; in any instance, make sure you don’t pay more in fees for your own site than you did in the eBay marketplace.
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You still have to pay for credit card sales. Here’s one expense you can’t get away from. Some of the most disliked fees on eBay are PayPal fees; some sellers just don’t get that you have to pay for the privilege of accepting credit card orders. To that end, PayPal’s 2.9% fee isn’t that out of line. It’s likely you’ll pay at least 2% for third-party credit card processing. You may also be stuck (or prefer to go) with PayPal on your site—which means you still pay that dreaded 2.9% fee per transaction. Get used to it.
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You won’t have any customers on day one. One of the primary advantages of selling on eBay or Amazon is that you get to tap into their huge established customer bases. Millions of potential customers come to those sites every day, looking to buy something; they’re great places for a seller to be. Unfortunately, when you create your own online store, you don’t have those millions of visitors. In fact, you don’t have any visitors on day one. How do you get customers to your site? That leads us to our next disadvantage...
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You have to promote your own business. Smart sellers know that the exorbitant fees they pay to eBay are primarily not service fees but rather advertising fees. That is, they pay to have eBay drive business to their product listings. Well, on your own website, you have to do all the promotion yourself. That means paying for pay-per-click or display ads, organizing your own email mailing lists, doing all your own online public relations, you name it. If you have a marketing degree, this is probably second nature to you; if not, you may be in over your head. And whether you know what you’re doing or not, it costs time and money to conduct a full-fledged online marketing campaign. How much money do you have in your marketing and advertising budget?
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You’re not completely your own boss. So you got yourself out from under the yoke of eBay to be your own boss. Good for you! Except that you’re never totally your own boss. You’re still at the mercy of your customers, of course; if you can’t make them happy, they’ll find a way to get back at you. (And you won’t get any new ones, either.) Plus there are various restrictions you may have to follow if you subscribe to a storefront service; there may even be rules that your web hosting service enforces. And, of course, your online payment service will tell you various things that you can and can’t do when accepting payments. It’s not quite like being a slave to eBay, but it’s not that different, either. Meet the new boss, same as the old boss.
Put simply, running your own website takes a lot more time, effort, and money than you probably expect—and you may not have the specific expertise required. Are you really ready to run everything yourself? Some sellers are, some sellers aren’t. That’s a judgment you need to make.