If certain myths are to be believed, eBay has the online auction market sown up. They may be the biggest auction portal on the web, but for business that does not necessarily mean profit. Profit is derived from generating scale and controlling costs. Scale is generated by marketing the business to create the sales.
For a business to create a viable business model it needs to ensure the following:
- they can control costs
- provide focus on their products to customers
- control the marketing message
- create a strong online brand
- generate sales leads and repeat business
By using eBay as a sales channel these can’t be controlled.
Ebay has a natural market and it attracts a lot of users. However this means your products are being sold and marketed along with other seller’s lots. This has two negative effects. It dilutes the business brand and it effects overall sale price. It is easy for bidders to make price comparisons against similar lots and can they can therefore trade one off against the other. The effect on the brand can also be negative for the business. If you promote your lots being sold on eBay, then you are also promoting the items of your competitors as well.
Controlling costs is important to business. Whilst eBay and other auction portals charge for listings, they will also take a cut of the transaction through Paypal as well. This means costs will increase with sales volume and sale prices. If the control of the shop is retained through your own online auction website then you are in control of the costs.
If you are interested in finding out more about auction marketing then it may be worth having a look at some of our auction marketing ideas.
Once sales have been made through your own website, it is easier to begin developing a relationship with your customer. This will generate trust in your website and your brand and this will help generate repeat sales.