The biggest change I have seen on Ebay since I first started 9 years ago officially in 2007, is that the competition has increased to a frightening level. As a seasoned seller who was on top of the food chain for many years, I don't like what I am seeing. The question is, will everyone who is listing be able to make money while Ebay is in the process of becoming ridiculously overloaded with sellers from all over the world?
I still am in the evaluation phase on this. I now have over 10,000 positive feedback, however, it should be much greater than that. My specialty field is baby products (you can check out my actual website, not my Ebay listings, at: http://www.shop.nubysippycup.com to see what I sell.) I'm not afraid of competition but I am afraid of what other sellers are doing to our online businesses, more than likely, not intentionally, but because they "think" they are making money because they are selling a few items.
In my niche, new sellers are coming onto Ebay at a rapid pace and selling items for $1 or less profit in many cases. They are lowering prices to levels that prevent most full time, seasoned sellers from being able to compete and still be in business. This is also happening on Amazon, subsequently, where I also sell but Amazon is a whole other story in itself. I was queen of selling one baby product for about 4 months. In fact, between Amazon and Ebay, I sold over $10,000 a month of these baby products as a merchant seller not using FBA (fulfillment by Amazon). We were packaging over 100 orders per day and barely able to keep up. It was glorious for awhile. I had to hire extra help. I was the leading seller and I made a fair profit. My customers were happy, I had great feedback, then BAM! in came the wholesalers. The wholesalers and our OWN suppliers, as well as retail stores, and international sellers are now all selling on Ebay and Amazon making it nearly impossible for the average Joe to make a profit.
If you were working a full time business, would you be happy with a $1 profit? No way. These new, deep pocket sellers have the buying power to put many of us out of business. Then, you have the less experienced sellers who seem to be forgetting how much it costs to purchase poly bags, printer ink, paper, packing tape, boxes, and other materials. They don't seem to be calculating in the gas it costs to drive to and from the postal services nor their time. They seem to be losing money yet they continue to sell at such ridiculously low prices.
The sad part for many of us regarding new competition is that they aren't all losing money. Many are sellers with deep financial pockets who are able to buy up thousands of dollars in inventory directly from China or from USA manufacturers. They make profits in various ways. Many make a profit only through adding a $1 or two handling fee to the shipping charges and they are making money for sure. Many sell just a few cents above cost and use items as loss leaders.
Loss leaders are products that are selling at or below cost. You see them all the time in grocery store ads. They advertise a product for a penny just to get you in the door and then expect that you will not only buy the advertised product, but you will purchase other products as well. Some offer free shipping, but when you get to their site and add on another product or two, they have handling charges that will help them make a profit or they can hike up the prices of their other items to make up for the losses on the loss leader product. They can also sell items at near cost because they are volume sellers. That does not help the little guy who runs a small business or who is just selling here or there and who is struggling to compete against them on any online platform.
Then you have the international sellers. They have hit Ebay like flies on you know what. The international field has caused Ebay to become overloaded with sellers from many countries. I am not against anyone selling on Ebay but something is very wrong when a seller from China can take the product you are selling that costs you $5 to purchase and $2.60 to ship (actual shipping cost for 8 ounces or less USPS) and sell it for $1 or $2 with free shipping! Granted you have to wait a few weeks to get your product from China, but if you are not in a hurry, what a deal. People say we should support our own USA manufacturers and I agree. The problem is, if you look on most items, you will see that they come from China or Japan or Indonesia, etc even when sold in the USA.
Ebay competition is increasing so rapidly with these international sellers that on some baby products for example, you have to scroll through the first several pages to even find a USA seller. If you know how to use the boxes to the left side on Ebay, you can check off USA only and that will help if you are trying to find a seller from the USA, but it looks like the international sellers are doing quite well and are selling lots of their items. Being from China no longer seems to deter the buyers since they know that the majority of products sold in retail stores come from there anyway.
I will go into more detail on this in the next blog post. I'm not saying that you shouldn't sell on Ebay. I am saying that you should be prepared to deal with an excessive amount of competition when you are in a baby products niche. Can you still sell in the baby niche and succeed? Yes, to some extent and only if you are creative.
That is why you need to do so much research. You need to be able to identify a niche where there are fewer sellers and where it is less likely that you will have a ton of international competition. Can you still succeed on Ebay these days? Probably, but it isn't going to be the same as it was in the past and new strategies will be needed to survive all of the Ebay competition.