The Hidden Costs of eBay
We have many customers who have made the transition from eBay to EROL. They do this for a variety of reasons:
- Security – you own the software and all information that creates your site.
- Design -you have complete control over how your site works and functions
- Search Engine Optimisation (SEO) – very fine SEO control on each individual page allowing you to maximise your chances of appearing in the top search engine (Google’s) results pages.
- Cost – once your online earnings go over a certain threshold, then it becomes cheaper to have your own (rather than an eBay) shop…
…Taking a look at cost in particular:
As mentioned, we have found that there is normally a threshold that those selling on eBay reach before it becomes economical to switch to running your own e-commerce store.
eBay costs
To illustrate this, eBay charge an insertion fee of £0.10 plus £0.35 for optional features, then 8.75% of the final sale price. If the payment is taken via PayPal then a further charge of 3.4% plus £0.20 is charged. With a product sale of £50*, the cost for selling via eBay/PayPal would be £6.57 per product (approximately 13% of the product sale price).
If you are selling one item a day via eBay with an average value of £50*:
Total first year cost: £2398 inc VAT
EROL costs
The costs to consider when setting up your own e-commerce website are:
- Domain Name: £20.00 inc VAT per year
- Hosting: £90 inc VAT per year
- Payment Gateway: £360 inc VAT per year
- Software: £460 inc VAT one off fee
Total first year cost: £930 inc VAT
Summary
Taking the above example, this is a saving of £1000 per year! This money could be put back into the site – building traffic, improving design or usability. Remember, when you invest in your site, you are investing in just that – your site, but when you spend money on eBay the money can rapidly seem to go into the ether.
*The average order value through all EROL stores during 2008 was £59.89.
