Hi guys. I want to keep this post brief but as informative as possible. The question has been posed on forums around the internet many times why sellers markup their items so much on sites like eBay, Etsy, Amazon, etc. compared to their own websites. I don’t know if that question has ever been answered by a company before. So here I go…
I’m sure many of you have listed and sold items on venues like eBay. Not as a business, but just to unload some stuff here and there. In that case, the fee structure is fairy simple and straightforward. You pay a nominal fee to list and 10% of the final price in fees, and then you either pay for shipping or charge your buyer for it. However, when you run a business on these sites, the fees really begin to add up. Businesses must subscribe to monthly fees for having a “storefront”, a “shop”, or whatever the site calls it. In addition, in today’s marketplace the emphasis on “free shipping” is so great that these venues basically tell you that your items will play second fiddle and won’t be seen unless you offer it. Of course, that comes at great expense to a seller (and most work it into the price of the product). On top of that, there are advertising and marketing fees. Basically, you must spend a rather large percentage of your item’s selling price to get it out there, to get a sponsored listing, and get it seen. If that weren’t enough, you also must pay for their payment processing fees! Add in supplies and office expenses and you’re talking a huge chunk of profit going to a 3rd party. But a private website operates so much leaner…
I’m completely transparent with my fees here. I pay a monthly fee to host the website and a monthly fee for a shopping platform. I also pay a small percentage of the selling price to our payment processor, Stripe (or Paypal, if you pay that way). It’s so much easier to manage costs that way. I don’t really advertise the website; I include a business card with each order placed elsewhere leading repeat shoppers here. I charge a small fee for shipping instead of working it into the price—this way you are not punished for buying multiple items. It’s a better deal for me and a much better deal for the customer, especially if you’re buying more than one item. This is really how it is for every seller and company out there. We can control costs in house but once we rely too much on 3rd party venues it seems like the fees never end.
I hope this provided some value to someone (buyer or seller alike). We do love doing business on Etsy and eBay and we’ve had great success and experiences there. The bottom line is that it’s just a bit more costly to sell there than to sell here.
—Brando