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Let me start by saying that I think eBay is a revolutionary service and one of the great ideas of our time. I am a former eBay powerseller. I joined eBay in 1998 to sell items around the house. My wife and I started selling seriously in 2004 and achieved and maintained Power Seller Status and a feedback of 99%. I left eBay in 2006 for some of the same reasons that eBay sellers are complaining about today but the primary reason was that I felt I had learned enough to be successful online without eBay.

One huge reason for the complaints is that the eBay model favors eBay and its buyers, not the sellers. Look it up and you will see that one of the founding elements behind eBays creation is to cater to its buyers needs. Also note that the this model greatly benefits buyers by creating very aggressive competitive product pricing amongst sellers and forces sellers to provide value adds such as good service and swift or free shipping to set themselves apart from other sellers.

Looking at our books as powersellers on eBay, it became clear that after eBay was paid for listing, gallery, final value, & paypal fees, that much if not all of the profit was gone. Not to mention operational cost, like the time it takes to manage the end to end sale, shipping supplies, and the other elements required to sell on eBay.

Auction and sales management time is a big cost factor to consider but a lot of us don’t consider it at all. We don’t put a value on our time. Why not? There should be a dollar amount attached to your time just as everything else has a dollar amount attached to it in business.

I feel that the majority of eBay’s buyers are seasoned and know what they want and how to conduct themselves on eBay to get it. However, we found that a lot of eBay customers are high maintenance. Some are always seeking a deal, even if its on top of an already great deal that they could not beat anywhere else on or offline. I don’t blame them for trying.

Then there are the buyers with the lower feedback ratings that buy and don’t respond to your payment request for the item they bought until after you report them to eBay and they advise you that they were:

• Having surgery
• Attending a funeral
• Out of town
• Had a power outage and could not get online

Let me see, I think thats all of the most common excuses that I remember. Whats funny is, each person thought their version was original. Meanwhile I would look at their feedback ratings and notice that they were buying items and paying other sellers while Im being told someone died and having to track them down for a payment. Shameless, lol.

Anyway, my point is that it requires a lot of time to manage your eBay business and you should attach value to it.

There are a large number of people selling items on eBay that think they’re making money because they make a sell. That’s called generating revenue NOT making money. Your making money when you have something left after you have paid to list, completed the sell and shipped the item.

This is one of the primary reasons for my theory, which is that eBay can stick to this business model as long as they like and be successful. eBay boycotts and complaints and have been around as long as eBay has and every year eBay introduces an increase of some fee and justifies it with an excuse about something it must do for some reason that you cant confirm. See these fee increase dating back to 2001 for yourself; 2001, 2002, 2003, 2004, 2005, 2006, 2007 & 2008. Thats something isnt it? Boy this Internet thing makes it hard to escape accountability.

One of the interesting things that I noticed about some of these fee increases, is that they were often made on the heals of a good earnings announcement. Go figure. I think its safe to say that, this cycle will continue.

Now I do feel that for a small minority of sellers, eBay is a great place to prosper for the long haul. The categories that I feel are the most beneficial for sellers are those:

1. Sellers who produce the product that they are selling - Some examples are, digital products like ebooks, software, how-to guides or manuals, candles, Ethernet cables, etc. This is because the cost of the product is time (you set the value) or very low when compared to purchasing from a distributor or other source.
2. Sellers who purchase in such large volumes that their pricing can survive eBays slice of the return and still turn a profit. I think this is a small percentage of sellers on eBay and certainly not the average sellers position.
3. Sellers that own other properties, whether brick and mortar or online, that have a need to move discounted or surplus products, that would otherwise be trashed, donated or sold in bulk and written off as a loss. Examples are returns, open box, refurbs, and things that just wont sell in your store, etc. (NOTE: We’ve found that items sell with ease on eBay that will not sell on our ecommerce site without lowering the price)
4. Sellers who sale collectibles - this one is variable on eBay but should be good for most of these sellers.

Today, we still use eBay in this role to sale our returns and items that don’t do well on our ecommerce site. This is a win win situation because these items would have been lost revenue if not for eBay, so we don’t mine paying eBay for providing a path for us to sale those items even if we break even or take a small loss on the item, its better than nothing at all.

Finally, we concluded that eBay is a good place for people seeking to get into ecommerce. Its a great place to get your feet wet and learn about ecommerce. However, after you learn the basics, why not brand yourself and take a fraction of those fees to promote your own online store.

2 years after leaving eBay and setting up our own ecommerce website, we increased our sales by 300%. A large part of this was because we reduced our operational cost and used those fees for marketing. We still offer Paypal and were happy to offer it. Although we found that a lot of customers off of eBay shop using Credit or Debit Cards.