I had a call today from a woman that has been very successful selling second hand clothes on ebay, making up to £500 per week which is fantastic.  She’s now thinking that she would like to translate her ebay business into an online store that is seperate and bespoke from ebay.  While I think this a great idea, she really needs to consider the costs and effort that will be involved in making this transfer from ebay to real world.

 The benefits of staying with ebay

• The first issue that she will need to take into account is that ebay already has an enormous customer base that she is benefiting from, it will be hard work to generate the same type of traffic to her own site
• The storefront is familiar and ready made, she doesn’t need to worry about merchant services or storefront design
• The review functionality makes her a trusted source to her customers, so she doesn’t need to persuade them that she is a legitimate business

Disadvantages of staying with ebay

• Ebay have the relationship with the customer, though it is possible for her to start building this on her own
• Cost, it costs her the listing fees each time she puts an item on the shelf, this is a real issue if an item doesn’t sell

The benefits of setting up her own store

• She will be able to develop her own brand and customer loyalty, building her own relationship with her customers
• She won’t be competing directly and immediately with every other seller in her niche area
• It will be her own business, with assets and value attached to it

The disadvantages of setting up her own store

• Cost, cost, cost - everything costs when setting up an online business.  The domain, the logo / branding, the online store, the hosting, the advertising.  Even the free stuff costs in time, even if not in money
• Finding and pulling customers to a website is hard work - she really needs to understand how to get her business listed organically for her niche products and build the site accordingly (luckily for her she is a journalist so at least has the writing skills to submit articles)

Her biggest problem at the moment though is that she doesn’t know what she doesn’t know.  She needs to pull together a business plan, marketing plan (both real world and internet), set a budget and targets so that she can figure out where to go from here.