Millions of small businesses started out selling online with eBay auctions, but times have changed and fees are soaring. E-Commerce expert Michael Miller shares his insights about choosing the right selling strategies and channels for your businesses.

Benjamin Tomkins, Contributor

June 22, 2009

5 Min Read

Michael Miller

In recent years, thousands of small businesses are abandoning eBay auctions due to soaring fees and eBay's growing focus on large sellers. But what comes after eBay? In "Selling Online 2.0: Migrating From eBay To Amazon, Craigslist, And Your Own E-Commerce Web Site," online business expert Michael Miller shows how any online business can make the jump away from eBay and thrive. He offers help in comparing and assessing the eBay alternatives and tips on how to plan a systematic move to other online selling channels. Michael Miller is a popular writer and commentator on technology and digital lifestyle topics. He has authored more than 75 non-fiction books. His best-selling books include "Absolute Beginner's Guide to Computer Basics," "Tricks of the eBay Masters," and "Googlepedia: The Ultimate Google Resource." Miller spoke with bMighty about eBay alternatives and how to create a cost-effective online selling strategy for business.

Don't Miss The "Selling Online 2.0" Book Excerpts:
Planning For Selling Success Establishing Your Own Web Site: Is It Right For Your Business?

bMighty: What's the difference between selling online 1.0 and selling online 2.0?

Michael Miller: Professionalism. If you want to be a next generation online seller, treat it as a business. Fortunately or not, with eBay, you didn't have to be business savvy to be successful; eBay made it easy enough. But you need to be more savvy, plan, and treat it like a business. Anyone could stumble into initial success, but it's not sustainable.

bMighty: You've written other books about YouTube, Google Apps, and cloud computing, why a book about selling online now?

Miller: What's happening now is that eBay is changing. Sellers are seeing natural growth slow or stall. The question is how are we going to grow from here? eBay has always had to strike balance between sellers and buyers who don't always want the same things: sellers want low fees, lots of buyers, and high prices, whereas buyers want choice, low prices, and less competition. Over time, eBay has come down on the side of buyers by making it more secure, buyer friendly, encouraging larger sellers, and more professional sellers that offer return policies and accept credit cards. The result is to discriminate against small sellers. It's really hitting the small seller upside the head; eBay has been good to them in the past, but not going forward.

bMighty: So should SMBs with eBay storefronts be looking elsewhere?

Miller: It depends on the type of business. You don't necessarily need to leave eBay, but you do need to leave online auctions. eBay is shifting from auctions to fixed pricing. Buyers don't want that anymore so you need to shift to fixed price and use new techniques. There are really three main options outside of eBay. You can use CraigsList, but that's more personal than for businesses and it only works for very local markets, there's Amazon, and the third option is your own e-commerce site.

bMighty: What's the misconception people have about selling online?

Miller: That simply putting things online will sell them. Everything is different and some types of things work better in particular marketplaces. Collectibles and antiques work on eBay, but for commodity products, say golf balls, eBay is a horrible place to sell. For big products like exercise equipment and refrigerators, CraigsList is an option because the market is localized.

bMighty: Should business owners consider using multiple marketplaces at the same time?

Miller: You need to think carefully about using multiple channels and probably place different merchandise in different channels. If you put the same inventory out through multiple outlets, you have to manage it and that's a bag of worms. The other approach is to have separate inventory pools for each channel. Software can solve this issue, but you need to invest in the software and the people to use it. If you are using multiple channels, you should watch the pricing closely so you have the same pricing across all channels. If you use different prices in the different marketplaces for the same products, you'll end up competing with yourself.

bMighty: When should business owners launch their own e-commerce site?

Miller: It depends on the business; running your own site is challenging. It's not the technology so much; there are solutions that make it easy. What's challenging is that you don't have any customers. eBay has customers, tens of millions of potential customers, but when you launch your own site, you have zero. The real challenge is marketing; how do you get people to know about your business. You can almost flip a switch and have an e-commerce site, but you can't flip a switch and have a successful business.

If you've been selling you should have customers -- that's an e-mail list you can use to drive customers to your site. Focusing on a particular product helps too, because there are communities on the Web for everything and you need to start working those communities and get to know the bloggers on that topic so they mention you. You can also advertise with Google AdWords and Yahoo's equivalent.

To run your own e-commerce site, you really need to have all the business skills. There's buying, distribution, shipping, fulfillment, and you need to have those going for you. eBay does the marketing for you, all you need to do is put your product up. When you go out on your own, you need to do it and have the budget for it. Planning is key; sit down with a spreadsheet and map it out. Compare those 10-15% eBay fees to the costs of doing it all yourself. If you compare it over a 12-24 month budget, it will be obvious which makes sense for your business.

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