eBay Stores vs. eBay Auctions

Is it just me, or is that a freakishly long thumb?

Anonymous said: "I would also love to hear your thoughts on when it is good to have an ebay store rather than just listing auction items."

I'll give you the short answer, and then I'll give you the long answer.

The short answer: Don't do auctions.

The long answer: In general, I am very anti-auction. I started out selling on eBay with auctions only. I suspect that's how most people start out. I didn't even know there was such a thing as eBay stores back then. That was during the day that store listings were separated out from auction listings in search results, so I wouldn't have wanted to do that anyway. Once I started to sell more, and once eBay integrated store listings back into search results, I decided to make the leap. I was half-sick about that $15 a month (or whatever the basic store level is), because how would I afford that??

It became obvious in a very short period of time that I made the right decision, and I've never looked back. My store fees were only 5 cents per month (back then - they have since changed it to 20 cents per month for basic stores). That $15 paid for itself very quickly. I was able to list my items higher and get what I wanted for them, rather than listing them at auction and hoping for the best.

Several months later, I did the math and realized that I would save even MORE money by upgrading to the mid-level Premium store. If I thought I was sick about paying $15 a month, imagine how I felt at the thought of paying $50 a month! But again, what I was saving on listing fees quickly added up to pay for the store subscription. I don't think there's a boost in search results by having a premium store, so I don't think making that upgrade really increases your sales, but there is a point where mathematically, it makes sense to upgrade. Let's take a look at that before I talk about why else I don't do auctions.

Basic Store: $15.95/month; listings 20 cents each

Premium Store: $49.95/month; listings 5 cents each

If you have a basic store, and you list 230 items per month, you are paying $15.95 for the store subscription, and you are paying 20 cents per listing, which is $46.00. Your total monthly fees (excluding final value fees) are $61.95.

If you have a premium store with the same 230 items per month, you are paying $49.95 for the store subscription, and you are paying 5 cents per listing, which is $11.50. Your total monthly fees (excluding final value fees) are $61.40.

So yes, your premium store subscription looks like a lot of money, but you are actually SAVING money by upgrading. You pay more up front, but your listing fees are lower.

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Ok, so now that I've gotten that off my chest (something that had nothing to do with the original question) ... let's go back to the original question.  When is it better to run auctions? And I think I said something like, "Never."  Let me explain my reasons for saying that:

Instant Gratification. We live in a Gimme-It-Now society. Auctions are a thing of the past. More often than not, people don't want to bother waiting for an auction to end. They want their item, and they want it now. I speak from experience here. I just bought something the other day that was an auction listing with a BIN option. I didn't want to wait until the end of the week. I wanted it sooner. The difference was just a few dollars, so I just bought it now. I was not the least bit interested in waiting until the auction ended. People don't like to wait.

Over-saturation. eBay has been running all these ridiculous 1,000 free listings promotions. Everybody and their mother is listing their stuff at auction right now. If you search for something like "Clarks Black Shoes Size 8," you will probably be overwhelmed by all the search results. Because everyone is listing, there are way too many listings to choose from. A bargain buyer will sort those gazillion search results by lowest price. You have 2 options: underprice and be the lowest price so yours sells, or price fairly and let the lower-priced auction get the sale. Neither of those is appealing, so you need to price your item where you want it and wait for a Gimme-It-Now buyer.

Ordinary inventory. I sell shoes. They aren't exactly collectible. There are a lot of shoes out there in the world. Let's say a buyer searches for "Clarks Black Shoes Size 8" and finds a pair that she likes at auction. She bids, but is outbid. She has a gazillion other Clarks Black Shoes Size 8 listings to choose from, so she'll just move on to the next one. On the other hand, let's say a buyer searches for "Curse You Red Baron Fire King mug." There is currently ONE of those listed at auction. This is a rare item (one that I actually managed to find and sell last summer!) If there are 8 people looking for this mug, those 8 people are going to get into a bidding war over that ONE mug that is listed. They HAVE to win it. There is no other option. They can't just move on to the next mug listing. That is an auction item for sure. You need to know what's ordinary, and what's extraordinary. Put the ordinary stuff in your store. Auction the extraordinary stuff. And it needs to be truly extraordinary. I have had great success (meaning $100+) with only 3 auction items in my history of selling on eBay. All three of those items were hard to find and were one of very very few that were listed at the time.

Time investment. I'm busy. I'm pretty sure most of you are busy too. During several of eBay's recent free auction listing promotions, I decided to go ahead and move some of my older inventory to auction, as a form of clearance. I spent over an hour switching those listings over to auctions, only to have just 3 or 4 of them sell. I then had to spend over an hour a week later switching those listings back to store inventory. Maybe it didn't cost me money to switch them to auction, but it did cost me money to switch them back to store inventory. It also cost me a great deal of time, time that I could have spent listing NEW items.

So to summarize:  only use auctions if you have a super-special, extraordinary item that is rare, with only 1 or 2 other active listings (or better yet - zero!). Price your auction wisely. Start your item at a price that you would be content with. But generally speaking, if you are planning on sticking with eBay for awhile, you NEED to open a store. I guarantee you your sales will increase. Not necessarily in units, but definitely in dollar amounts. You can price your items how you want them, and you can relax, knowing that that price is the price you will get. Eventually.  Store listings are less exciting than auction listings, but they are definitely more reliable.

Let's hear some opinions in the comments. Who has a store? Who just does auctions? Why? If you have a store, have you ever looked back? If you only do auctions, are you considering opening a store?