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Saturday, December 3, 2011

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.


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?


  1. I have only been selling for the past year. It's been off and on selling and almost all items that we had around the house. So far I have only done auctions but if free BIN is offered I always add that to the listing. Of course, the BIN option is wiped out by the first bid. I have contemplated becoming more serious about selling on eBay, I'm just not sure if I want to get into that.

    You are so right about it being an "I want it now" society and on the occasions I buy on eBay I do more BINs than auctions.

    As usual, I lot of good information and ideas to ponder and file in the back of my mind. Thank you.

  2. I am so glad you wrote a post on this as I was just thinking about this yesterday. I have been selling on ebay since July and added etsy in Sept. I will focus on ebay here in this comment/question.
    My revenue is about 200-300 per month on ebay and I have stuck with doing the 50 free listings per month. I list an auction price and a buy it now price (unless I have a unique item, then just auction). I attach one good photo and so I have zero money in upfront fees. I am also offering all free shipping so I am higher in the search results. I have noticed more sales and activity with the free shipping. But, I am wanting to increase my revenue, so I am wondering if I should open a store. At any one given time I have about 25 items in my store and I just relist and adjust price a few times a month up to my 50 free listings. I would like to consistently have about 40 items listed at any one given time.
    Jessica, in your opinion, should I have a store? My ebay name is vintagedreamsne if you'd like to take a peek and critique. Much appreciated!! Rachael

  3. OMG!!!! What an incredibly timely article. I was going to ask you this myself. I'm one of those who has been relishing the 1000 free listings promotion every week. Right now I have 130 items listed. But, some of them are stupid things I'm just fishing for the right person (like magazines) I wouldn't want to pay for the listing. Also, I'm trying to increase my sales by making my starting price higher, I almost always start at 9.99 because that is cheaper. But when I list at 15.00 and I sell it, that's 5.00 more than 9.99, but it's a quarter more to list, you see my dilemma. I'm dependant on ebay for income, so it seems I could be in it for the long haul. (I've been selling for 3 years now as a hobby)...But, and I haven't researched it, doesn't ebay get more from a store sale vs an auction sale? That's where I get confused. I sell vintage jewelry, vintage stuff I pick up at auctions (I just sold a seltzer bottle for 152.00 that I trash picked)so that stuff should be in auction. However I'm also following your lead, selling good clothes, shoes, small appliances, things where there are multiple listings, then a store would be good. During the current 1000 listing blitz, I listed most stuff BIN, cause I want it to move.

    Could you address the % ebay gets difference, or am I just missing something?


  4. Rachael - if you are exclusively using the free auction listings (no upfront fee expenses) and you aren't sure you want to be selling on eBay long term, then you're probably right to just stick with auctions. If you have any idea that you might want to do this long-term, then I would recommend a store.

    Gretchen - the final value fees for auction listings is 9% of the final sale + shipping. The FVF for store listings is 11% of the final sale. You can find those fees here

    For me, being able to sell my items at a higher fixed price than I would be able to sell it at auction has more than made up for the extra 2% I pay in fees. For example, I can sell a pair of shoes fixed price for $25, quite consistently. So I pay $2.75 in FVFs (plus whatever the FVF is for shipping). If I list it at auction for $9.99 and only get one bidder (because shoes don't usually get bidding wars), I'll pay 90 cents. Yes, I've saved $1.85 in fees by selling it at auction, but I've lost $15.01 in potential income by auctioning rather than fixed price. Does that make sense?

  5. Thanks for the feedback Jessica. Another question, if I start a store and then stop because I am not seeing an added benefit, would I keep my seller ratings and be able to keep my listings up or would I have to relist?

    Nice example too on the FVF with store vs nonstore!

  6. Rachael - yes, you'd be able to keep your feedback, DSRs and listings. All you'll lose is the little red store icon next to your name, and your store categories.

  7. This was extremely helpful, as I was pondering the thought of full store status after the holiday slow down. So thank you for advising about the unique item only auction. That is definately do-able for me. Thanks Jessica!

  8. A store makes sense if you are going to keep over 200 items in your store. I used to have 600-800 items in my store, but lately have come down to 250-300+. I thought about downgrading to the basic but it's still cheaper for me to keep the premium store. I'd like to add more inventory - I have tons waiting to be listed - but I'm struggling to find the time. As for auctions, it just depends on what you are selling. This year, my sales INCREASED tremendsouly by doing more auctions - best year I've ever had of doing eBay for over 10 years. But it does not work for everything. I also sell sewing patterns and I only list these as store inventory, because they will only sell to the "right buyer". So, I think a good answer would be: whatever works best for you and the product you sell. I have noticed that everyone is constantly trying different strategies. And it's a constant evolution - what works now may not work later. That's why I am grateful to everyone who shares because we all learn from one another!

  9. What a fantastic and timely post! I'm really close to pulling the trigger and opening a store. I've been playing around with the eBay fee illustrator calculator. Could not figure out how the heck to estimate what my sales would be. Looking strictly at the monthly fees makes more sense on how to make the decision. I am amazed at how many people don't want to wait for a purchase but it makes sense because I really don't either. (unless I'm only looking for a deal) I've put BIN on only a few of my recent auctions and most have gone for the BIN price. (even though they sat for 3 weeks at a much lower auction price). Thanks again!

  10. One thing also that encouraged me to open a store - I was too busy each week to relist, relist, relist. Now with my store I can list an item and it will sit there for a month if I wish. Then I can spend my time listing new items! Megan

  11. Jessica,

    Possibly a more general question, what do you do when you go on vacation? Do you have someone ship items for you, do you de-list, or do you just not go on vacation (like a week at the beach)?

  12. Kate, that's another bonus of having a store. There is a vacation setting for stores. You can set the dates that you will be unavailable. Then you have two options: you can either have eBay hide your listings altogether or you can have eBay post a note on all of your listings letting your buyers know that you won't be shipping until xxxx date. I've used it several times with great success. When I get sales while I'm away, I always send a note to make sure the buyer saw the message about the ship date. I've never had a buyer back out of a sale.

  13. Excellent, thank you for the information. Now I have one more totally unrelated question for you. The winning bidder of an item that sold at auction yesterday wrote to tell me she doesn't want the item, she got a better deal elsewhere. There was another bidder that bid $1 less that said they will take the item. I know I can do a second chance offer in eBay, but how do I go about that and how do I report the winning bidder to eBay? I have tried to figure it out but in this case it's not obvious.

  14. To take care of the winning bidder, you could either agree to cancel the order or you could go through the Unpaid Item process (find either one of those in the Resolution Center under the Account tab in My eBay).

    To do a second chance offer, if you go into your Sold items, you should see Second Chance Offer in the drop-down menu on the far right next to that item. It should walk you right through it.

  15. Thank you for all your help. Do I need to cancel the sale before I can do a Second Chance Offer?

    I have been unable to figure out how to report her to eBay. I would think they would not want a customer that behaves in that way to continue. Here is the message she sent:

    Hi, Sorry to say, but I am notifying you the I already got a better offer of this product. So I wont be able to buys yours since I am already going to receive one. Thank you for your services! =)

  16. I don't know if you can do a SCO without cancelling the first one. Go ahead and try it. I'm sure if it's not allowed, you'll get an error message.

  17. Great article! I agree that if you are going to have a couple hundred items listed all the time, you need a store. It is very nice to be able to pick and choose which format is best for each item, which you really need to do these days!

    I wanted to add, I use Best Offer on pretty much all of my fixed price listings. I set the price at the highest I think I could get for the item, add Best Offer, and then set the auto-decline for the lowest price I will accept.

    Some people pay full price, some people send offers... You decide if you want to accept it, make a counter-offer, or decline. I think it helps me make sales I might not have made without it. :)

  18. Do you think it is advisable to have a store while still building up your DSRs? I have only about 130 (100%) - I've sold over 200, but it's shocking how many people ignore doing feedback.

    I want to start a store in the New Year, but the low number of DSRs makes me hesitant.

  19. Latoshia, I wouldn't hesitate to buy from a seller with 130 feedback. I think that's about how many I had when I started. Don't let that hold you back :)