Regular readers will know that I am always going on about why you should sell online using multiple venues such as Amazon and eBay and why you should also have your own website.
The bottom line is, the more markets your products are available in, the more sales you have the opportunity to make, and the more money you’re likely to bank.
With multiple venues comes a small dilemma though, exactly how do you go about pricing your products for each market?
Should you sell their goods for the same price across all markets? Should pricing and postage charges differ according to where you are selling?
Pricing your products both on and off eBay
Let’s think about this for a minute. If you are selling on eBay then it’s likely your prices are very much driven by your competition. If you’re selling goods similar to numerous other sellers, you’ll need to price your goods at a competitive level. If you’re selling unique and one-off items, you can charge whatever the market will bear. It’s quite obvious really, yet still I hear sellers complaining about competitors undercutting them on eBay, while those very people making the complaints are using eBay to drive traffic to their outside eBay sites where prices are much lower. This is exactly the same thing as undercutting on eBay, only in a different marketplace!
Over on Amazon, prices are often higher per item compared to eBay, and at Amazon it’s very tempting to price match or undercut your competitors because you haven’t got the opportunity to make your product different or stand out from the crowd and thereby drive more traffic to your Amazon listings than to others selling similar goods on Amazon. That’s because you can’t really differentiate your product within your description on Amazon as you can on eBay or from your own website. The reason is, nine times out of ten, your item will already have been added to Amazon’s catalogue and you are forced to go with the description and images that are already on the site.
However, my attitude has always been to make as much profit as possible from a product, and surely this is the same for everyone – that’s the whole idea of business – so, wherever you are selling, what’s the point of letting your products sell too low?
Even though I’ve said it many times before, eBay selling is actually not always about being the cheapest seller, but this is still how most sellers – even many Top-Rated Sellers – view their position. So, most sellers aim constantly to be the cheapest which simply eats into potential profits and more often than not creates a pricing war from which no one benefits.
Over on your own website you don’t have the direct competition that eBay and Amazon has, so doesn’t it makes sense to sell at a higher price on your website? Plus you can offer postage options such as Special Delivery that are sometimes not feasible on eBay due to the costs to the buyer and again the fact that you do need to remain fairly competitive. So there’s an immediate advantage of selling from your own outside eBay website, namely of offering a more efficient service from your website and you are absolutely entitled to charge a premium for that.
But what about those who suggest, without eBay or Amazon fees to pay each month, you can afford to offer lower prices on your website? Well, I’m sorry to say so but there is always a cost involved even with your own website, such as domain name and website hosting fees. And perhaps you’ve already invested in website design software or paid for your site to be professionally designed, and maybe you also have shopping cart and auto-responder fees to pay. Not forgetting the cost of driving traffic to your website via pay-per-click ads or other traffic- generating methods. Those are all costs that are easily forgotten once you have paid them initially. So you could have invested quite considerably already in terms of time and money.
Don’t get me wrong, this is not a bad thing – setting up a professional website does require a little bit of capital – and you should most definitely have a website. All I’m suggesting here is that many people forget about the costs involved with a website and therefore think they can set their prices low, when in fact the truth is, your website prices should actually be higher. Also, even if you don’t want to set your initial price per item at a higher amount, you should at least cover your postage costs. People are prepared to pay more for postage from a website – much more so than from eBay and Amazon – so always add a decent postage charge or at least combine it with your price per item and then counteract this by offering “free” postage!
So, my suggestion is always to sell at higher prices on your website, but offer added value to justify the cost.
Here’s an example. Let’s say that you are selling a baby bottle steriliser on eBay for £19.99 and free P&P. Over on your website, you’ll have that same steriliser selling at £24.99 and with express postage for a premium. So immediately you’ve got more profit potential just by enticing buyers to purchase with the bonus of express delivery. But you’ll also have stocks of extra bottles, bibs, monitors, weaning equipment and a whole host of other related accessories, and you may also be offering a discount voucher or even faster postage. Perhaps you allow the customer to contact you with any special requirements. So, you are offering your customer further choice and a fast, efficient, customised, personal service. This is what buyers love and they will be more likely to stick around at your website and order multiple goods – even at the higher price than you’re asking on eBay and Amazon – which means more profit for you and also the possibility of repeat business.
What’s the worst that can happen? The worst is that people will go back to your eBay listing and purchase there instead. If they do, it’s still your sale; you’ve just opened up the options. Alternatively, they may purchase one product from your website and another from your eBay listing.
And remember that once someone purchases from you on eBay or Amazon, you will in effect “own” that customer which entitles you to contact them in the future with further offers and deals. There are endless possibilities here and the profits are far greater than just selling on eBay or Amazon.
Another advantage of selling from your website is that when a buyer purchases, your overall customer service is less important than when you are selling on eBay or Amazon. That’s not to say you should slacken off – customer service should be excellent at all times – but if goods are posted a few days after ordering rather than the same day, or you don’t get back to a customer within two hours, you know you’re not going to lose your business through poor feedback which can happen on eBay.
For those reasons, and more besides, you may have already considered diverting people from eBay or Amazon to your website. If you’re not doing so already, here’s a tip to help you get started in a way that allows you to profit from eBay’s massive membership base. You can do this because eBay allows you to link from your “About Me” page to your own website. So the task becomes one of getting people to visit your “About Me” page in the first place, then to move to your own outside eBay website later. You can get people to look at your “About Me” page by placing a clickable link to your “About Me” page from within your listing description. All you do is add the sentence: “Please visit my About Me page where you can see my other products and learn more about me” and make it into a hyperlink.
You’ll then have a link within your “About Me” page which goes to your website and completes the chain. You’ll find that curious people will simply click on your links, arrive at your website and after browsing, place an order directly rather than go back and buy through eBay. So it’s your job to get people to your website and keep them there.
Don’t worry about higher prices putting them off – shout about your service, free gifts, fast postage and so on – do whatever it takes to hook your potential buyer.
The immediate advantage of this is that people will also be able to view your other products all in one place, without moving between several eBay listings, and this makes it easier for them to place a multiple order. Another possible scenario is that people will see one of your items on eBay, ask you a question about it, and then you direct them to your website in your reply (not strictly legal in eBay’s eyes but you can be really subtle about it by telling your potential buyer that you have a wider range available at your site). Then your enquirer might purchase a completely different product from your website (preferably, more expensive!).
So, while eBay and Amazon are absolutely fantastic venues for generating potential sales, the fees you pay are directly related to the pool of customers those marketplaces provide you with. Think of it like an agency fee and you’ll understand that it is worth paying these fees for the amount of potential business you achieve. On your own website though, it’s entirely up to you to generate your business and that’s why you should not lower your prices because in effect you’ll be undercutting yourself.
Your website is your opportunity to break out of the pricing wars and advertise at a price that is guaranteed to make you a profit. Don’t forget that it’s easy to flick from seller to seller on eBay and Amazon checking out prices so the competition is plain to see. With your website you’re competing against other websites which requires more research on the part of your customer. That’s why, once you’ve got a potential buyer’s attention over on your website, you need to keep it!
Of course, there are plenty of buyers out there who would rather purchase from a website than on eBay or Amazon – they just feel safer. And on the other side of the coin there are buyers out there who always think they will get the best bargain on eBay – but this isn’t always true!
Ultimately, as a short-term strategy, cut-price offers on your website may work, but it’s not something I would advise in the long term. If ever you decide to stop selling on eBay or Amazon you’ll be left with just your website, selling at low margins which is definitely not going to be profitable without a constant stream of buyers which will be declining if you are not driving them from your other venues such as eBay and Amazon.
So to sum up, my advice is to use your website to offer an exclusive, premier service with higher prices, and try to keep your special offers and weekly deals purely for the eBay and Amazon markets where you’ll always have a steady stream of customers you don’t have to work hard to find.