One of the biggest downsides to selling on eBay or Amazon are the "seller fees" you have to pay every time you make a sale. Both eBay and Amazon will charge you (on average) around 10 - 15% of the final sale price in fees.
Sometimes it's more than that, sometimes it's less. It depends on what you're selling and how you're selling it. But regardless, it's a pretty bitter pill to swallow, particularly if your profits aren't very big in the first place.
Having your own store means you don't need to pay these "seller fees", so it can instantly bump up the amount you get to pocket from each sale.
You will often have to pay a small transaction processing fee, depending on what service you use to run your store, but it's likely to be in the neighborhood of ~2%, which is nothing compared to the fees that eBay and Amazon take.
Cutting back on seller fees is one of the biggest reasons people decide to launch their own store, but there's another big reason right on its heels...
When you sell on eBay and Amazon you're completely surrounded by competition. Even when potential customers are looking at your product listing, they'll see ads for other sellers all over the page.
Each of those ads has the chance to steal your customer away from you.
It gets even worse on Amazon: When multiple sellers are selling the same thing, only one seller will get into the "buy box" — and if that's not you, you'll have an automatic handicap against your competitors.
To add insult to injury, the very "marketplace" nature of these... err... marketplaces means that buyers can easily compare you to your competition. Most of the time (but not all the time) it'll be the lowest price that wins, and that can lead to a "race to the bottom" mentality where sellers slowly eat their own profits in order to stay competitive.
Pretty crappy situation for you as a seller, right?
But when you have your own store, there are no other sellers or products competing for your customers' attention. They'll only see yours. This means you won't "leak" customers so easily, and you can usually charge higher prices than you could in a busy, competitive marketplace.
There aren't a whole lot of ways you can customize your your customer's buying experience when you're selling on eBay or Amazon. You're pretty much out of luck if you wanted to do something like install a countdown timer on your page, or if you wanted to add a popup that offers a coupon in exchange for the customer’s email address.
But when you run your own store, the sky is the limit. You’re able to control all of these aspects and more. Everything from the color scheme, to the design, the logo, the placement of different elements — it’s all in your control.
With this extra power at your fingertips, you can make tweaks to increase the number of sales you make, improve customer retention, and stamp your own style on your store. Speaking of style...
It’s hard, if not impossible, to create a unique brand identity on Amazon or eBay. Most of the people on these platforms don’t care about who is selling the products -- as far as they’re concerned, everything is sold by Amazon.
With your own online boutique, you can add your own branding to every step of the process: From the time when they first stumble upon your content, on every page of your site including checkout, on their email receipt, on the marketing emails they receive, on your social media pages, and possibly even on the packaging and labels.
It's much clearer that they've bought from you, not simply from eBay or Amazon.
An additional reason to create your own online boutique store is to stop the online marketplaces from having control over you (and potentially the power to crush your business).
For example, meet Bob.
Bob spends two years building a million-dollar-per-year vitamin store on Amazon. Things are going so well that he rents an office building and hires some staff to run his new business.
One day, Bob checks his email and finds out that Amazon is no longer allowing the sale of three of his major brands of vitamins — which together account for 40% of all Bob’s sales. Suddenly, he can't afford to pay his employees. Overnight, his million dollar business is destroyed.
Bob’s story is not fictitious — I was one of the employees in his company.
His real name isn't Bob, but that’s unimportant. What’s important is lessening the grip Amazon and eBay have over you by giving yourself an alternative channel — your own website. That way if the marketplace does change its policies, or does change its fees, and it suddenly becomes impossible for you to sell on that marketplace — you have a backup plan.
If Bob had built his website sooner (he was working on it but not as a priority), he would have been fine. He could have decided to continue selling those brands on his own website.
Existing customers are one of the most valuable assets to any business. Customers who have bought from you in the past are much more likely to buy from you again, so promoting to these people (especially over email) can be extremely lucrative.
But when you're selling on eBay, Amazon or some other marketplace, you usually don't have access to your customer's information. You don't get their email addresses, and while Amazon will give you their postal address, they expressly forbid you to market to them.
So in all, your chances of being able to market to your previous customers is hamstrung by the platform.
When you have your own store, however, you have full access to all these details. You can compile a list of previous customers and send them news of promotions, new releases, or gift ideas for special occasions.
This keeps your customers coming back for more, and is a great way to grow your business.
Even though I've been trash-talking eBay and Amazon a little bit in this article, I'm not suggesting you simply delete your eBay and Amazon listings and ride off into the sunset.
Nor am I necessarily suggesting that you'd be a fool to sell on eBay and Amazon in the first place.
Not at all!
These marketplaces are fantastic ways to get started, and even once you've decided to open an online store, you could continue to sell on eBay and Amazon as well. This way you get all the benefits of your online store, but you also reap the benefits of selling on a massive marketplace which gets a huge number of potential customers each day.
Your website can simply be an additional revenue source for your business. Think of the major marketplaces like Amazon or eBay to be your up-front money, and your website/online boutique as your long-term, slow-growth investment. Ideally your website will eventually overtake Amazon or eBay as your main source of income, but it will take time.
Of course, selling on multiple platforms at the same time and managing your inventory can be a bit of a juggling act, but by this stage in your selling career you can probably handle it. I recommend using an inventory management service like ChannelApe to keep track of your stock across all your channels.
It's hard to fathom when you're just starting out, but maybe one day you’ll decide you don’t want to run your online business anymore. What happens then? Do you just shut down your whole business and move on?
If you've spent time and money building your business, why throw that away for nothing? You'll probably try to sell that thing instead.
But here's the problem:
If your business is wholly based on a platform like Amazon or eBay, then selling it can be hard, if not impossible. You don’t really have a solid asset to sell — just a reputation, your feedback, and perhaps some supplier relationships.
You won’t be able to sell it for nearly as much as if you had an actual website with a domain name, a steady stream of visitors, a customer list, social media accounts and more.
By creating your own online store, you’re building something tangible that you can sell for a profit. So if you ever do decide to shut up shop, there could be a nice payday awaiting you at the end.
As you can see, there are a great many benefits to running your own online store. So... how do you sign up for one?
Building your own online store probably sounds like a daunting task. And it might have been if you were trying to do it ten years ago. But the good news is that it’s actually fairly simple and straightforward to do it these days; if you use the right tools.
The easiest and quickest way to create an online store is by using a hosted store builder. I'm calling these "managed" because you don't have to buy and install the software on your own web hosting service, or deal with a lot of the nitty-gritty detail that website owners typically need to deal with — a lot of it is done for you.
This means it doesn't matter if you've never build a website before: The store builder makes it really easy, even if you don't have many technical skills.
There are tons of online store builders out there, but I’ll mention three to get you started.
There's a really good chance you've already purchased something from a Shopify store at some point in your life. They're the biggest store-building platform out there, powering hundreds of thousands of stores.
When you hitch your wagon to the Shopify platform you also get access to a wide array of store templates and plugins to add extra functionality to your store.
BigCommerce is Shopify’s main competitor. They also have a huge following and a large, helpful blog.
We’ve created our own online store builder. You can choose a pre-designed template and start uploading your products in a jiffy.
Managed stores have a lot of features, and they sure make building a store easy, but they can also cost a pretty penny in subscription fees.
An alternative is to build your own website yourself. You can either hire someone to set up your store for you, or you can install a store-management software on it.
This is a more technical option, but it may allow you to escape the bulk of the fees associated with a managed store platform.
If you already have experience using the WordPress content management system to build websites, you could set up a store with the hugely popular WooCommerce platform. It's free to get a basic store up and running, although you may end up paying subscriptions for any extra add-on plugins.
If you're considering this, do the math and work out if it would actually be cheaper to use a managed store builder like Shopify instead.
I recommend that if you've never built a website before and you don't know how to use WordPress, stick with the managed platforms like Shopify and Bigcommerce. If you're already an experienced WordPress user, look into WooCommerce.
If there’s any downside to creating your own webstore, this is it. It can be fairly difficult to get customers to a new website.
When you sell on eBay, Amazon (or other marketplaces) you get access to the torrent of visitors using those sites — it’s like you’ve set up store in a busy shopping mall. But when you go it alone with your own website, it can feel like you’ve set up shop in the middle of nowhere — at least in the beginning.
However, there are some tried-and-true methods to get your first few customers!
Advertising on social media is one of the easiest and quickest ways to get your first customer because you can immediately get your product in front of eyeballs interested in your industry.
However, it does cost money (you can start with a few dollars a day), it takes a lot of testing to be done properly and you need to know who your audience is; if you target the wrong people, they won’t be interested in what you’re selling, don't click on your ads, and will just waste your money.
Success in social media advertising relies on targeting the right people to see your ads.
Click these links to go to a guide on how to advertise on the respective social media platform:
Here’s an example of Ugmonk, a clothing and lifestyle brand, doing social media advertising right:
They shared a motivational quote on Twitter with a link to their shirt for sale. They boosted it (paid to advertise it) to a certain group of people, and it got retweets, further expanding their campaign.
Another way to advertise your online boutique is through the use of Google Adwords. With Adwords you can pay to have your ad appear when somebody searches for particular words in the Google search engine.
For example, the first company to pop up when you google “mens running shoes” is Reebok:
They are advertising their product on Google every time someone Google’s the exact phrase, “Men’s Running Shoes”.
Adwords can be a good alternative to "traditional" advertising where you might pay for a certain number of "views" or "impressions" of your ad. Adwords operates on a "pay per click" (PPC) format, meaning you only pay when somebody actually clicks on your ad — in other words, you're paying for results.
The problem with Adwords (and other PPC networks, like the one operated by Bing) is that the more people bidding on particular "keywords" or "search phrases", the more expensive it gets. (For an extreme example, check out the top 100 most expensive keywords in the US.)
So it stands to reason that the best way to use Google Adwords is to bid on keywords that are not ridiculously popular, and where you can still get clicks for under $1. This means shunning the more general keywords (like "candle making supplies") and going after more specific, "long tail" search terms. (Like "buy wood wicks" "wicks for beeswax candles", "candle dye blocks", etc.)
It can also work very well if you're in a smaller niche that is naturally less competitive.
I've grossly oversimplified the Adwords model here. Google also factor in things like the quality and relevance of your page when they're working out how much to charge you. Check out this guide to Adwords pricing for a more thorough overview. Google also have the Adwords Help Center with comprehensive details about the entire platform, (but in typical dry Googlese language).
If the costs of advertising in Google make your eyes water, there is another free alternative.
Most of the results you see in Google when you search for something haven't actually paid to be there. They are what we call the "organic" results. They're there because Google's algorithm thinks these pages are highly relevant to whatever you searched for.
When you click on any of these "organic" listings, the website owner doesn't have to pay Google anything. So they can get (potentially) huge numbers of people to their websites, and it won't cost them a cent.
Sounds good, right?
So "search engine optimization" is the art/science of getting your website to appear in these "organic" search engine results, so you can get visitors to your website for free.
It's a tricky business because the search engines kind of don't want you doing a lot of it. They want the top spots to go to the websites that are genuinely the best results for this search term — not just to the websites that put the most effort into gaming the system.
But there are some things you can do as a store owner to help tip the scales in your favor:
The big (BIG) downside to SEO is that it is s..l..o..w. Seriously slow. It can take months to start seeing any movement of your rankings in the search engines, so it's definitely not the right strategy for you if you need visitors, like, yesterday.
It's best viewed as a long term strategy.
SEO is a massive topic, so if you're interested in this method of getting visitors, I recommend you start with this introduction to SEO.
Now that you understand what SEO and keywords are, it’s time to start creating content for Google to rank you for. Without content, what are you going to show up for?
Content marketing is quickly becoming one of the top contenders in the marketing world. It’s not merely the act of writing blog posts - that’s the easy part. No, you have to also promote that content, get other websites to link to it, and get people to share it.
You can figure out what kind of content to rank for using the keyword research you performed on Google. Once you write the content, you need to share it on your social media profiles and reach out to influential blog and website owners in your niche. Ask them to share or even link to your content.
One of the best examples of websites using content marketing successfully is bodybuilding.com. They sell sports supplements, and almost all of their website traffic (and therefore their sales) comes from people finding them through their content. For example, I first found them through their “Top 10 Protein Powders” article, and proceeded to buy the #1 powder from their website due to their honest reviews.
If you’re ready to get started content marketing, Neil Patel wrote an awesome guide to writing content to get in the top 10 results of Google.
Speaking of influential blog and website owners, once you reach out to them and begin to develop a relationship with them, you can start a mutually beneficial partnership with them as well.
While you certainly don’t need to become official business partners (although a good business partner would probably help you succeed), you can simply agree to share and promote each other’s content.
It’s a win-win because you both get more publicity, shares, and, hopefully, customers.
Additionally, you can give away your products to influencers for free.
In exchange, ask for them to promote your content and give an honest review of it on your website and/or their blog or social media accounts.
For example, the owners of this Instagram account are given free products to try out and advertise through their website and post pictures on their social media.
As I mentioned before, starting your own store doesn’t mean you need to quit selling on eBay or Amazon immediately. In fact, using your existing sales channel to promote your new store can be a great way to get things off the ground.
Quick disclaimer: Before you do any of this yourself, check with your existing platform to see what their policy is on this kind of promotion.
New Zealand-based outdoors and hunting gear site Bushbuck does this well: They sell their products on the local equivalent of eBay — TradeMe — and use these sales to build awareness of their brand and their online store (bushbuck.co.nz) in a few different ways:
Being very visible in key product categories: When someone searches for “hunting jacket” on TradeMe, they’ll inevitably stumble upon a Bushbuck listing. Sure, there’s a chance Bushbuck will make a sale here, but the real prize is the brand awareness. That customer might not have heard of Bushbuck before, and now they know that they make hunting jackets. There’s a chance they’ll search for Bushbuck directly next time.
Listing products for $1 reserve on TradeMe: These get a lot of attention, and a lot of exposure for the brand. Only one person can end up buying the product, but in the meantime 400 people might have viewed it, watched it, and researched it.
Adding marketing material to packages: Bushbuck slip a little thankyou card into each item purchased through TradeMe. This card has a promo code for a 10% discount off their next purchase from Bushbuck’s online store. So they’re able to entice their TradeMe customers to their online store.
The trick is to look for existing channels where there are lots of potential customers, and see how you can tap into those. Don’t just focus on how much profit or how many sales you can make through these channels — also consider how much exposure they can give you, your brand, and your online store.
Of course everything comes down to cost. Luckily, building an online store doesn’t cost much.
Running an online store can cost you less than $50/month (at the time of this writing). Let’s break it down:
Shopify (and it’s competitors) cost roughly $27/month.
Hosting your own domain name (mydomain.com instead of mydomain.myshopify.com) costs roughly $13/year, or less than $1/month.
So the bare minimum is about (we’ll round) $30/month. Additionally, Shopify takes ~2% of all sales.
Of course, there are a million and one other things you could spend more money on. However, some things that I would consider essential are:
An email marketing software like MailChimp (~$10/month). If you don’t like MailChimp you could also use Aweber or GetResponse — two other very popular services.
Advertising, such as social media or Adwords (At least $50/month, but once you’re making a profit through your store you can spend more to make more.)
So all-in-all you can run a store to start out for less than $100 a month, and you can keep that number even lower if you use more of the free marketing methods (like partnering with influencers in your niche, using your existing channels to promote your store, or doing SEO over the long term). It costs less than many people spend on coffee or cigarettes, and actually gets you a return on your investment. Pretty cool, if you ask me.
Now that you understand the benefits of creating your own online store, you may be wondering when you should start thinking about creating one.
On one hand you could argue that you should build one right at the outset, since it’s reasonably inexpensive.
On the other hand, there’s already a lot to learn when you’re selling online, without having to learn how to run and market a website as well. You might choose to use a platform like eBay or Amazon as a training ground first.
The best answer I can give you is this: Open your own personal online store when you know you’re 100% committed to success in eCommerce.
I say that because selling on Amazon or eBay is less work to get up can running. You can just list your products, then let that platform work it’s magic for you. You can decide to leave selling online as a side project at that point.
Running your own store, as I said above, will take a little more work. You have to learn social media marketing, how to get people’s email addresses to market to, and many other ways of getting traffic to our website. Basically it will give you some additional job titles. However, it will also be much more rewarding if you commit to opening your own store because of all the benefits I listed above. You’ll have a real business.