Everyone has heard of eBay You may have traded on it and if you haven’t, you’ll probably know someone who has. For most of us, eBay is seen as a sort of online car boot sale and you have probably never contemplated looking at as an extra channel for your business.
The growth of the eBay phenomenon
What is surprising, is that whilst most of us personally buy and sell on eBay, fewer of us have looked seriously at making the world’s largest marketplace an integral part of their company’s online sales strategy. In fact, almost half of the UK Internet population is on eBay every month looking to buy. According to Nielsen / Netratings, eBay.co.uk's reach was 42.3% in January 2006.
At a recent pre Christmas trading ecommerce event hosted by Sun Microsystems, 70 major retailers were asked the following questions: “how many of you trade, or know someone who trades on eBay?” (all hands raised); “how many of your businesses actually trade on eBay?” (2 hands stayed up).
But things are starting to change. The sheer scale of eBay and it’s continued growth, allied to the huge traffic driven by it’s massive membership base (15 million in the UK) cannot be ignored by business. Two things are for sure: it’s not going away any time soon and every day people are on there, looking for products and buying them in massive numbers.
A brief history of eBay
Let’s start by asking some key questions. What is eBay? and how can it help businesses, both large and small, succeed. (And incidentally, one of the biggest eBay Sellers in the US is a company of 3 people!) eBay is well over a decade old now, founded in Sept ’95 by Pierre Omidyar who “had a really good idea” to use the early days of the Internet to sell and trade some rare “Pez” sweet dispensers. To his surprise they quickly went and before he knew it, a community of “Pez” traders had built up around the US and overseas. The ‘community’ based trading ethos of eBay was born.
Twelve years on, eBay has over 200 million global customers and offers massive UK, European and global exposure for your product and your business. Just imagine opening up your warehouse or a new shop and having over two hundred million people turning up. And then remember that your business hasn’t had to spend a penny on Pay Per Click or search strategies to get them there.
A common misconception about eBay is that it is purely an auction site for trading used goods. In fact, ‘Buy It Now’ (BIN) items account for approximately 60% of all transactions on eBay, whilst the recently launched ‘eBay Express’ is purely for selling BIN and new items.
eBay is still a great place to pursue products with the auction format and ‘the thrill of the chase’ is still holds great appeal for many buyers. This is vital for any online operation. The user experience determines whether a buyer will return and spend again, as well as recommend to friends and family that it’s a great place to go. Auctions therefore can be an essential part of the strategy you employ to draw traffic to your eBay store, as well as a great way of getting the highest price for your product.
There’s no doubt that online sales are here to stay and the UK market in particular has one of the highest adoption rates of online retailing in the World, (eBay UK is the third largest eBay region globally, closely following Germany and then the US). Increasingly, overseas businesses are looking at the online-retail friendly UK market and determining strategies to grab a share of the UK market. UK companies need to wise-up to this global threat and future-proof their businesses by implementing an effective ecommerce strategy that will both grow their revenue and their loyal customer base.
Running an eBay business
At first glance, online selling can appear confusing, with eBay, Amazon, Dealtime, Kelkoo, Google, Froogle and your own website. If your business doesn’t actively trade online yet, then eBay looks like a great place to start. The barriers to entry are low and you can create your own eBay business quickly and cost-effectively. Get your eBay Store and eBay Product templates branded and looking great, agree pricing and eBay listing strategies, then upload your product inventory and watch the business flood in!
Actually, it’s not quite as simple as that. eBay has lots of nuances to understand and deal with and when you start selling more than 200 items approximately per month you really need to be using an automated product listing tool that ensures you can also have a life as well as continuing to run a successful online business.
Running a business on eBay is not for the faint-hearted. It’s a competitive environment that is a marketplace in the truest sense that will, over time, sort out the winners from the losers. But if you have belief in your business and your products and the determination to succeed, the rewards are there; trading well, building your profile slowly, becoming a Powerseller (an eBay status awarded to established eBay businesses) and maintaining good levels of customer feedback as you go.
The inspirational stories of success are numerous, from a small business that grew from single sales to now shipping over 2000 Prams per month to bead sellers selling tens of thousands of product, or another selling hundreds of thousands of CDs and DVDs. Put your product up there, at the right time, the right price, and with the right strategy and it will most likely sell. Just make sure you’ve got enough product to meet eBay’s tidal wave of demand. eBay’s trading velocity is second to none; an item of women’s clothing sells every 8 seconds; an item of Ceramics every 20 seconds; a motorbike every 7 minutes.
The potential benefits to a business can be summed up succinctly: eBay offers businesses an opportunity to open up a new route to market quickly and cost effectively without affecting existing channels; to grow market share; increase your customer database; reinforce your brand and get maximum recovery rates for end of line or excess inventory.
So as you sit down tonight and review the day’s sales, consider how much more you would have liked to have sold. Then take a look at eBay, search the types of product you sell, and see how many are selling. That is incremental business you could have had today or even tonight, as buying on eBay doesn’t stop at 5:30. In fact, much of the buying is done in the evening (or through the night if people are buying from the US or the Far East) Just think, you could be making money while you sleep!