Transitioning Out of the eBay Business Model

Time to Go Solo? Transitioning Out of the eBay Biz Model

Since its founding in 1995, eBay has become the biggest tag sale/flea market/garage sale in the entire universe. You can find anything from low-cost diamond rings to earth movers to steak knives.

And lots of entrepreneurs have used eBay to build very nice businesses. Many eBay Power Sellers earn six-figure incomes through this buy-and-sell portal and those with eBay “storefronts” earn even more. On eBay, the entrepreneurial spirit is alive and well.

There are numerous manuals and other how-tos describing the process of building an eBay-based business. One of the most prolific, eBay professionals is Gold Level Power Seller, Skip McGrath.

In his expansive manual, The Complete eBay Marketing System, McGrath sums up the appeal of eBay as a business partner. “It doesn’t take a wizard to make money on eBay, nor does it require more than everyday computer knowledge. You don’t have to be a marketing genius, because eBay does most of the work for you. You don’t need to invest thousands of dollars…”

You don’t have to be a genius, you don’t need to be a computer geek, eBay handles most of the marketing chores and you can start on a shoestring, working out of a spare room at home. And still end up making more money than you’ve ever earned before. That’s the allure of the eBay business model – up ‘til now.

Things Change at eBay

Since its inception, eBay has been the perfect business partner, open 24/7/365, providing guidance for both buyer and seller (so you don’t have to) and offering start up businesses global exposure – all this for just 2¢ per listing in bulk. That’s real bang for the buck (or the 2¢). With listing rates so low, Power Sellers and full-time eBay sellers could list lots of product for little money. Listing a thousand items = $20. Pocket change.

But that’s no longer the case. Beginning in August, 2006, eBay is upping its listing fee to 10¢ a pop – a 500% increase in the cost of doing business on eBay. And there are plenty of Power Sellers who are none too happy about this change in the business terms.

The "Web Pro News" forum describes another problem with the evolving eBay biz model. One store owner complained, “Things were fine on eBay, we run 6800 items, we were getting nearly 6000 hits per day doing no extra advertisement except Froogle and Google base. Then eBay changed the promotion of stores, (and) we struggled to get 1,000 hits per day.” Less promotion, higher fees. Starting to see a pattern?

Apparently, the folks at eBay feel they can do without the revenues generated by Power Sellers and stores because many eBay biz owners are leaving the nest, building their own sites and going solo. It’s one thing to partner with a company that delivers good value. It’s another to stick with a partner that’s sticking it to you.

Transitioning Out of the eBay Business Model

You’ve worked hard to build your eBay reputation and to work your way up to Power Seller extraordinaire. And that customer good will is not something you want to leave behind. You want to take that goodwill with you when you launch your own site. Bye-bye eBay.

There are two keys to keeping what you’ve got. The first is to move slowly. Keep your eBay listings, maintain your high level of customer service and continue to build your reputation.

Second, manage your new web site costs.

Controlling Web Site Costs

It starts with your web host. There are lots of them so it’s a highly-competitive market. And, as a new site owner, you want the most for the least.

Here’s what to look for when shopping around for a host for your soon-to-be, stand-alone business:

Low monthly hosting fees

It’s important to read the fine print when you sign up with a web host. Some offer what appear to be low monthly fees but nick you for every extra you require.

Free apps & tools

If you can design your own web site, you’ll save a bundle. But what if you don’t know anything about web site construction? No problem. There are lots of applications that enable you to build a slick-looking site with click-to-pick templates, fonts and other easy-to-install features.

You’ll also need a complete back office, a secure checkout, customer & order management software and some SEO software so you can get the search engine recognition you deserve. And you want all of this at zero cost.

Free, 24/7 customer care

When it’s your business, your livelihood, you want answers now. You want it fixed yesterday! If a host doesn’t offer US-based customer service reps at 3:30 in the morning, keep looking.

Reliability

If your host server goes down, you’re out of business. No sales. No site revenues. No income. Ouch! That’s why it’s important to find a web host that actually brags about its record of reliability. Not too many do because they can’t.

You need commerce-class reliability, servers that are up and running 99.9% of the time. And, when there is a server glitch, you want somebody on site to fix the problem fast.

Security

Regardless of how secure you make your base camp computer system, if your server isn’t secure, your business isn’t secure.

Ask about server security. Look for redundant security systems. Look for customized security applications. Look for lock-tight server security to protect your business.

Lots of Freebies

In addition to free apps and tools, check for other free stuff. Some web hosts will register your domain name for free. Not a huge expense, but it shows a commitment to client success. Remember, web hosts want you to be successful so you’ll stick with them.

Really good web hosts help you to succeed because they recognize that their success depends on your success. So, a web host that actually partners with you for success is a much better choice for a host than one that just rents you disk space and leaves you to fend for yourself.

Once you’ve selected a host that delivers all of these features, it’s time to transition out of the eBay model.

Don’t Bet The Farm

You don’t have to when you transition out of the eBay business model. In fact, keeping eBay as a secondary outlet for product is a great idea. You won’t use them as much, but you don’t have to leave them altogether.

Keep your eBay store active while you build, tweak and launch your own site. Keep the eBay store as you start to see foot traffic on your new site. And don’t be shy about letting customers (especially repeat buyers) know that you’ve set up shop elsewhere. As a Power Seller, you have a d-base full of solid gold data – customer information.

Drop your regulars an e-mail with your new web address. They’ll appreciate the personal notification and you’ll appreciate their continued patronage.

You don’t have to bet the farm to move out of the eBay sphere. Careful planning, low- cost hosting services, lots of free applications and tools, security, reliability and customer care will significantly enhance your chances of actually expanding your online venture.

When you open a new web site with the right host, you don’t lose a partner in eBay. You gain another partner who’s just as interested in your success as you are.

Time to go solo? You’ve got nothing to lose and everything to gain.