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new online business – eBay, Amazon, or an online shop

ebay-vs-amazon-vs-ecommerceOne of the most common questions I receive from people just starting out in the online selling world is “where do I start!?”… and it’s a very good question. Which is the best platform to launch your new online business – eBay, Amazon, or an online shop? I’ll try to answer this question in today’s blog post by covering the advantages and disadvantages of each platform plus I’ll show you a proven, step by step system that will get you started in no time!
First though, we need to evaluate your own personal situation as there is no one single answer as the best way to launch a business will depend a lot on yourself and your specific circumstances.
Level of Experience
experienceThis is by far the most important thing you have to consider. If you’re totally new to online business, haven’t sold a thing in the past and in general, have very little knowledge on the topic, I highly recommend you start with eBay first. Why? Because eBay is still the number 1 and easiest selling platform to use when starting your first online business.
If we take eCommerce shops on the other hand; you really need to know what you’re doing to achieve any decent results. With your own eCommerce site, it’s not enough to put together a simple shop and wait for the money to roll in, not at all. As I explain in my eCommerce Magnates course, you have to know exactly how to build your shop and exactly how to promote it – otherwise it’ll be a failure – no two ways about it, there’s no shortcuts to be taken at all.
Sure, there are still plenty of things you need to learn to start selling on eBay but in general; it’s far easier compared to online shops. On eBay, you can start with one listing, selling a used item you already own, and learn along the way. And you’ll make that sale if you follow some basic principles.
I would put Amazon in 2nd place, right after eBay IF we base this decision purely on your level of experience. In some ways Amazon is even easier to get started with as there are not that many rules to follow, no templates to use etc. The problem with Amazon however is that it will be much harder to get those first sales in compared to eBay, especially if you just want to gain some experience with second hand goods.
To sum it up – if you’re totally new to the online selling world, start an eBay business. Begin with used goods and then once you’ve gained some experience, you can start looking at Amazon and maybe even your own online shop.
Budget
budgetBy budget I mean the amount of money you can invest in setting-up your business and buying stock. Basically the same rules apply here – if you’re on a very low budget, start with eBay! As I said, on eBay you can put together a listing for just one product and be up and running, selling in 10 minutes’ time. No other platform comes close to this.
Even more – on eBay you can actually start selling with no money at all! Just start selling unwanted items from around your house, use free eBay listing templates, take some product pictures with your current camera and you’re good to go!
With Amazon you’ll need to purchase brand new products in real bulk to make it work. This of course means a higher level of investment compared to eBay. You can still start with just one product on Amazon too but you’ll need to source it in bulk. Besides that, to list your own unique products in separate listings you’ll need to subscribe to Amazon’s Pro account, which costs £25 a month.
An eCommerce Shop is another step further into your pocket. Not only do you have to invest at least a few hundred pounds designing and setting up your shop, you’ll need to buy a range of products to sell as well. There’s no point in starting an online shop with just one product, unless it’s a very popular product that is a niche in itself (like a piece of fitness equipment or a specific business tool/machine).
So, if you have very little money to work with, start with eBay. If you have a more serious budget, you can start an Amazon business. If you have at least a few thousand pounds PLUS existing eBay selling experience, you can start looking into setting up your own eCommerce Shop.
Long Term Plans
long-term-planWhat’s your plan here? Do you want to start a full-time business OR simply generate some extra income each month to help pay your bills? This is a very important question to ask because for people who just want to make a few hundred pounds extra per month, the best path will be different compared to people who want to build a serious, long term business.
For those who are looking to create a side income, working just a few hours a day, eBay is once again the perfect platform. You don’t even have to ever look into other selling channels as eBay alone can provide you with the income level you’re looking for.
On the other hand, people with serious long term plans should use all 3 platforms to maximise their business’ potential. This usually means starting with eBay and then expanding to Amazon and an eCommerce shop. Not only does this allow you to reach more customers and therefore make more money, it also diversifies your risk! You won’t lose your entire business if something goes wrong with just one platform (like if eBay decides to ban you for example).
Time
If you hatimeve a full time job, you have to start with a platform that is less time consuming. Many people start building eCommerce shops not realising how much time they have to put into them before they’ll even get that first sale. This is definitely NOT for people who can only spend a maximum of 1-2 hours a day on their online business.
You can of course outsource many tasks if your budget allows it but still, I recommend starting with eBay alone if you can only dedicate a small amount of time to your business.
Amazon would fall into the same category as it’s relatively easy to maintain, especially if you use Fulfilment by Amazon – a service which takes care of your stock storage, order processing and dispatch.
An eCommerce shop is the one that requires the most time and energy on your part. Everything takes time when we talk about creating a successful eCommerce shop – starting from setting it up, creating product pages, adding descriptions and ending with the actual promotional part – which is a science in itself. It’s definitely not suitable for people who can spend just 1-2 hours a day on the project.
Okay, I am exaggerating a bit here of course – you can do it, even with just 1-2 hours a day, but then expect to spend many long months on it before you even see your first sale. So yes, it can be done but it will just take a longer period of time before you see any results.
Compare it to eBay where you can list a product in the morning and dispatch your first three orders that very afternoon and it’s a BIG difference.
So these are the 4 main considerations for which platform would be best for you to start on:
  • Level of experience
  • Budget
  • Long term plans
  • Time
In almost all cases, you’ll end up selling on all 3 platforms sooner or later, apart from people who just want to make a little side income and therefore will only use eBay.
And as you can see – the pattern in most situations is quite clear: eBay > Amazon > eCommerce Shop
This is the approach I almost always recommend people take when starting a new online business. To me it’s a logical plan to get started and grow your business as your level of experience increases. I have met very few people who have started out with an eCommerce shop and then expanded to eBay and Amazon as that’s not the logical or natural path of progression.
Now, with this information to hand, you can take a look at how eBay, Amazon and an online shop compare to each other and what my thoughts are on each. This is just my opinion of course, so completely subjective, but this is how I see the three platforms:
ebay-logoeBay is eBay… the world’s largest online marketplace. Their position only strengthens each year as they grow and make more profit. I really believe that eBay is that one opportunity where anyone can start a successful business online.
What I like most about eBay is that you can start selling so quickly and see results almost instantly. No other marketplace offers such ease-of-entry to people who are new to the online selling world.
There are downsides too of course…
Rules
Even though it’s easy to start selling on eBay, there are so many rules you have to follow to stay above everything and just keep your account active. Even though eBay has recently improved their Help center, for new sellers it may all sound too complicated. So I highly recommend you get some basic education first, before you even start selling. If you want a step by step guide on how to start a successful eBay business, check out my Easy Auction Business video course which will walk you through the whole process.
Competition
eBay is a very competitive marketplace and only the strongest and smartest sellers survive. But don’t be put off by this. In reality most of the competition you see on eBay are not that smart at all and can easily be out-competed IF you’re willing to take the extra steps needed to take your business to the next level and really make it something special.
Limited expansion
eBay itself is huge of course but still, if you sell a product on eBay, there’s a set market size for it and in most cases you can only take a small percentage of that. It’s hard to advertise an eBay business outside of eBay and even then; eBay’s tools for customer retention and for building long-lasting relationships with your customers are very limited.
Risk
eBay comes up with new rules all the time and if you’re not careful, one day you can instantly lose your business merely because you breached some rules you weren’t even aware of! Genuine ignorance won’t be accepted as a valid excuse and as eBay has complete control over us sellers, once an account is banned, there’s almost nothing you can do to get it back.
Low prices
eBay is seen as a bargain hunter’s paradise. That, added to the high level of competition, means eBay is a cutthroat marketplace where price is the no.1 driving factor in the buying decision. That being said, I have proved over and over that you DON’T have to be the cheapest to make your eBay business a success – you just have to be smarter! That means using clever branding strategies, marketing strategies, and listing strategies to ensure you make sales even if you’re not the lowest price on eBay.
Fees
I wouldn’t really call this a downside, more a cost for opportunity. On average you’ll pay eBay and PayPal 15% of each sale you make. For some people this may seem like too much, and that’s ok, but you have to understand that nothing comes free in this life and that you’re being provided a lot in return for that 15%… you’ll understand exactly what I mean later on when I cover eCommerce, which most people consider to be ‘fee-less’.
Even after listing all these negatives, I still consider eBay to be the number one opportunity for people who are just starting out selling online. It’s easy and cheap to get started and you’ll learn valuable real life experience that you can apply to other platforms – this is so much more worthwhile than anything you’ll ever learn in a book!
amazon-logoOr to be more precise – Amazon’s Marketplace. Anyone can open up a free seller’s account and start listing some used or brand new items on Amazon. In some ways it’s even easier than on eBay as there are not that many rules and systems in place BUT it’s also not as effective as eBay.
Unlike on eBay, where you list your products in individual, unique listings which will show up in search results, on Amazon; your offer will simply be shown under one listing for that particular product. And all the offers will be sorted by lowest price first. In my opinion this means you can only really achieve success on Amazon’s Marketplace if you sell a popular item and you can offer the LOWEST price for that item.
But the real gem lies in Amazon’s PRO seller account which comes at a cost of £25 per month. With this account you can list your own products in your own listings, meaning you’re selling your own brand products. This is where the real power of Amazon’s marketplace lies! You can take advantage of Amazon’s massive traffic and make a killing with your own products! The product itself doesn’t even have to be 100% unique – you can use my branding strategies and turn an unbranded product that everyone sells into a uniquely branded item that only you sell! I truly believe that this is the way to go on Amazon.
While there are less rules to follow on Amazon, don’t think it will be an easy ride. There are some downsides too…
Customer service
To keep your Amazon seller’s account in good standing, you have to provide super customer support, sell high quality products and do whatever it takes to resolve any issues of conflict. Amazon is actually even stricter than eBay and will ban accounts very quickly if your customers start leaving bad feedback.
Time
Amazon is not as fast as eBay, in terms of business growth or even getting those first sales in. Amazon’s search results depend heavily on product ratings and reviews. With a brand new product, with no purchases, it’s not easy to get a high level of traffic. That is unless competition for that product is very small. In general, expect to wait weeks and even months on Amazon for a product to really start ranking well and make the first page of search results.
Limited product selection
Amazon is naturally a more suitable marketplace for all kinds of electronics and household items etc. but may not be as good as eBay for clothing or say craft supplies. This means that not all niches and products will sell as well on Amazon as they do on eBay. You’ll never know this for sure without trying of course so I still recommend giving Amazon a chance, no matter what niche or products you work with.
To sum it up, Amazon is a natural 2nd step to take after your eBay business is up and running. It will work better for some products but everyone should give it a go and list their inventory on Amazon to reach more potential customers.
bigcommerce-logoLastly, eCommerce, your own online shop and the road to making millions online… as cliché as that may sound, it’s true. As only with your own online shop can you build a multi-million pound company. Technically you can do so on eBay or Amazon as well but that is so much rarer and much more difficult to achieve in comparison. eCommerce really is the way to go for anyone who wants to build a long-term, sustainable business that doesn’t rely completely on 3rd party marketplaces.
Here’s why I like online shops…
100% control
No more eBay or Amazon rules! You’re the boss and you control every aspect of your business, be it shipping, payment or dispatch rules – no one will tell you what you can and can’t do and this is obviously a great advantage to have! Not talking about account bans – no one can ban your eCommerce shop unless you’re doing something really stupid like selling counterfeit goods or other illegal products.
No direct competition
While you’ll still competing with other sellers in your niche, it won’t be direct competition as once a person lands on your shop, you’ve ‘got them’ – all they can see are your offers and products – there won’t be competitor’s listings taking their attention away! This also means that it’s more difficult for people to compare your offers with other sellers, so you stand a higher chance of making a sale.
Higher prices
People go to eBay to get bargain deals. Not so with online shops. While it is still important, with your own shop you don’t have to compete on price alone and can put more emphasis on the products’ features and quality.
Unlimited growth potential
The sky REALLY is the limit when we talk about eCommerce shops! You can become as big as you want within the means of your niche. Work on paid advertising, free promotions, build your own customer email database, do joint venture deals and so much more! If you’re willing to work hard, your own online shop is the perfect platform to make your dreams come true.
There are many more positives I could list but this just illustrates the fundamental difference between selling on your own shop vs. a third party marketplace like eBay / Amazon.
It all comes with some downsides though…
Investment
Unlike on eBay, where you can start selling with no money at all, you’ll need to invest money in setting up your shop, filling it with products and advertising it. In most cases we’re talking about a few thousand pounds but obviously it will depend highly on the niche you’re working in.
Time
eCommerce is not a fast track to success, unless of course you have tons of money to spend on aggressive advertising. It will take time to build a great looking shop, it will take time to get ranked on Google, it will take time to build your customer base and so on. It all takes time. So if you’re not ready to work at least 6-9 months on your shop BEFORE you see any real results, don’t even bother starting. Seriously, this is not the quick route to riches by any means!
Knowledge
I mentioned how eBay is rather complicated with all the rules in place etc. but eCommerce takes it one step further. It’s not about the rules in this case but about all the various topics you have to master to make your shop a success. I’m talking about skills like:
  • marketing
  • design (if you can’t outsource it all)
  • email marketing
  • blogging
  • SEO
  • advertising
  • tracking
  • and many more!
There’s a HUGE amount of things you need to master to get it all right. That doesn’t mean you have to learn through trial and error of course as that would be a very costly education! There are tons of books written on these topics, there are blogs and forums you can learn from. And you will need to learn at least the basics before you waste money on things that are proven not to work!
If you want to learn from the best, check out my eCommerce Magnates course! It’s a massive video course that shows you step by step how to build, manage and promote a highly successful eCommerce Shop. It’s not a theory filled, boring book. No, these are real time video lessons in which I create a brand new online shop in front of your eyes, managing every aspect of it all the way to the first sales. I highly recommend this course to anyone who is new to eCommerce or anyone who wants to expand their knowledge and increase their chances of success.
Conclusions
So that’s it – that’s my answer to anyone who wants to know what platform it’s best to start on – eBay, Amazon or your own eCommerce Shop!
I hope I gave you some valuable insight into all 3 platforms and that this information will help you make a more educated decision. There’s no ONE formula that fits all, which is why it’s so important to evaluate your own personal situation when deciding which platform to launch on.
In most cases, you will want to sell on all 3 platforms eventually. After all, each one opens up further selling possibilities and allows you to reach more buyers so why not take advantage of them all?
Start with eBay, then expand to Amazon and lastly – an eCommerce shop. You really can’t go wrong with this approach. If one platform doesn’t work well for your business, just drop it and concentrate all your energy on those that bring in more money for you. It’s not like you’re required to sell on all three!
If you want my advice on your specific situation or you’d like me to clarify anything mentioned in this blog post, then feel free to post your questions below and I’ll personally answer you.
Good Luck!
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