Why using online selling to make a living is harder than you think

Most online selling websites like eBay and Amazon would have us believe that online selling is easy. This may be true if you want to dispose a one-off item. But if you are planning to sell online to make a living you should consider your options carefully.

Online selling looks easy because you can start selling without the need for having a physical shop. You can put your items on display on the internet and off you go. Simple isn't it? But that is where the easy part ends.

Online sales websites make more money than you do

Most websites like eBay and Amazon charge you commissions and fees. This is usually mentioned in small print and it may initially seem like a meagre amount but it all adds up and cuts into your profits. For example, sites like eBay offer higher probability of your item being sold, but they charge you a listing fee plus a fee based on the final sale value of your item. Receiving payment via Paypal is expensive too as Paypal charges further commission on the received amount. Selling a £20 worth item can cost you £2.50 worth of commissions and fees all added up. And in reality it costs these online sales websites literally nothing to display your item on their web space. Remember they are online too and your item does not take up any physical shop space for them to display!

It is very hard to convey value

All the buyer sees is a picture of your item. Even if your item is better than the competition the picture does not always convey this. Say your item is better built then the competitors, but the buyer cannot touch or feel or hear it, so it is hard to convince them about the extra value in your product. Using stock photographs and standard templates makes this worse as your item looks further like the rest. Using your own custom templates and pictures consumes a lot of time and may require good computer skills.

The buyers can easily compare prices but not value

When you use eBay or Amazon to sell your items, remember that your competition is also selling the same or similar items on the same website. This means competition is tougher as users can easily view your item side-by-side to your competitors. This forces you to keep prices low or your buyers will simply choose the competition over you. This may look like a shopping mall where also competing items are displayed side by side but it is not, as the buyer cannot actually touch or feel your item to ascertain its value.

You also compete with casual and international sellers

Causal one-off sellers also put their items for sale on general websites. These people are not there to make a profit, they simply want to dispose their item and get some value back. They may put a lower price on their item and snatch away your sale. Similarly an international seller may be able to offer the same item at a much lower price.

Selling on your own website

Selling on your own website is much more advantageous than using general purpose websites. You do not pay excessive commissions and you cut out the competition (though buyers can still compare prices, it requires more effort on their part). However creating your own website requires an investment (time and money) plus computer skills. The website must be built right and follow web standards otherwise buyers will be unable to locate it and it will get lost in the WWW1. A sloppy website can also scare buyers into believing you are a dodgy seller. Remember your website is like your face on the internet. It must be well dressed up. Most buyers would use search engines like Google or Yahoo to find your website, so your website must feature top on these search engines and only one website can be at the top. You must also be able to convince buyers that their personal details and credit/debit card details are safe with you. All this requires professional and technical help to get working right and cutting corners here means buyers may never find you or may refuse to trust you. Finally your website once setup will need to be maintained and kept up-to-date. So this option is not very easy either.

1. 1. World wide web