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Thinking of Setting Up an eBay Store? Get to Know the Fee Structure First

February 20, 2011

I have been buying and selling on eBay for close to a decade now and for close to the past three years now I have operated an eBay Store through which I sell my unwanted sports cards and memorabilia.

In the third article of my Toward Self-Sufficiency Series, I outlined a number of the reasons that I like the eBay Store format over traditional eBay auctions, which included:

  • I can have literally thousands of items available for sale 24 hours a day, seven days a week, 365 days a year;
  • It helps avoid some of the inefficiencies of listing in auction format;
  • On a per item basis it is pretty affordable;
  • It is a more ‘buyer-friendly’ option;
  • It is a fantastic inventory management tool; and
  • I have found that in general I realize better sales figures for my items that I get through auctions.

Despite the fact that the list of things noted above may lead you to believe that I am entirely in favour of the eBay Store system and would encourage others to follow the same path, the truth is far from that.

Last March, eBay instituted some major changes to the Store fee structure that have had a dramatic impact on my point of view about the system and its positive contribution to the pursuit of my self-sufficiency goal.  Subsequently, my opinion on suggesting it as a useful system for others to consider starting up has done a near complete reversal.

When the pricing changes were first announced, the communications folks at eBay somehow made them sound as though I would be benefitting from them as a store operator.  In the end that was not even close to being the case, as my 2010 fees were almost triple the amount that I paid in 2009, and that includes paying fees

With this sort of policy change it is no wonder that eBay faces a significant amount of criticism from online merchants and those who would like to be.

Thankfully, I have been able to navigate my way through this massive increase in fees, albeit with a much thinner “profit” margin than I would be looking at had the fees remained at least somewhat close to their previous levels. 

In fact, I firmly believe that if it were not for the major fee changes I may already have achieved my goal of a financially self-sufficient hobby by now.

It is because of situations like what happened to me roughly a year ago that I urge anyone looking at setting up an eBay store of their own to proceed with caution.  

The most important thing that a prospective eBay Store operator can do before deciding whether or not it is the best option for his/her situation is to take a very close look at the eBay Fee Illustrator.

Store subscriptions come in three levels, each with a different pricing structure and each with certain limits related to the features included.  Based on the information that you input into the calculator you will be provided with which level of subscription would be best suited to you.

I cannot stress enough how important it is to be as realistic as possible about the information that you input.  It is incredibly easy to find yourself in a situation that can end up costing you significantly more money than you could possibly hope to generate in sales, making the eBay Store option a complete waste of time, effort, and money if that circumstance were to arise.

I bought in to the creative writing of the eBay communications department and did not bother to use the illustrator prior to the fee change, firmly believing that those changes would actually be of benefit to me as the announcement stated.  As I said earlier, that did not end up being the case at all.

By no means would I ever discourage anyone from investigating the possibility of setting up an eBay Store.  My list of six benefits that I have noticed by using the system are entirely true of my experience, and I firmly believe that they can easily be duplicated by other sellers.

What I would discourage is blindly believing that an eBay Store is an absolute assurance of a substantial amount of income.  Having an eBay Store requires a significant amount of work and a thorough understanding of its viability in your own individual situation, so do your due diligence beginning with the Fee Illustrator, look closely at what will work best for you, and make an informed decision from there.

Until Wednesday, all the best in your collecting pursuits!

Ryan

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6 Comments leave one →
  1. February 23, 2011 10:05 PM

    Excellent, excellent article! Very helpful. I will be posting a link to this article in tomorrow’s edition of The Card Corner Report at http://cardcornerclub.net

    I have often thought about going the store route but was just unsure. I didn’t even know about the fee illustrator. Thanks for saving me a ton of money.

    • February 24, 2011 5:58 AM

      Glad that you found it of use! Not a pleasent experience for me to have gone through at the time (and costly too), but in the long run it worked out and now hopefully I can warn others about some of the risks involved. Defeinitely emphasizes the need to do your homework and not take big companies at their word.

      Thanks for offering to help spread the word too!

  2. June 27, 2012 7:53 PM

    Thank you for writing this, and leaving it up! I’m researching, trying to decide if I should go the store route now, later, or never, and this article told me more about operating a store than ten minutes of looking for information beyond the splash page on eBay’s site. Very much appreciated!

    • June 27, 2012 8:01 PM

      Glad you happened to come across my article, always love hearing from people who take the time to read. Very happy that I could be of some help to you, feel free to pass the link along to anyone else you think it may be of use to!

  3. August 26, 2012 1:00 AM

    I have been toying with the idear of opening up an e-bay shop for several years but get cold feet, because I’m of the belief that somewhere in the small print, something will come out and bite you. i found your article very informative and am still unsure whether to go this route or not! what would your honesty opinon be if asked this question now of you?

    • August 26, 2012 8:38 PM

      Despite some attractive freebies offered by eBay to sellers without store subscriptions, if I were to do it all again I would still make the move to an eBay Store. It’s the easiest way for me to move out items that I don’t want or need and use the cash for items that I do. It also allows me to be selling at all times rather than just during promotions or through the limited number of free listings that would be available to me if I didn’t have the store.

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