While giants such as Dell, Sony and Canon have a strong presence on the site, SMEs are also starting to realise eBay's potential. Here in Ireland, a recent course on how to sell on eBay held by Wicklow County Enterprise Board was attended by representatives from a PR agency, a kayaking company, a business consultancy and even a driving school.
There are still some misconceptions in the Irish business community about eBay, however. "People are a bit unaware of the difference between selling your granny's dress online at an auction and the very professional aspect of running a business through eBay," says Louise O'Riordan, assistant chief executive officer with Wicklow County Enterprise board.
Measuring the market
In Ireland there are 500,000 registered eBay users. The amount of purchases made on eBay by Irish users outnumbers the amount of goods delivered by Irish sellers by three to one. The majority of these imports come from the UK. In terms of value, cars and vehicles rank number one, followed by clothing.
"Compared to the UK, Irish sellers haven't grasped eBay as much," says Patrick Munden, head of business development at eBay Ireland. "They might think that eBay is a competing channel. We would see it as a complementary channel where they can make just as much margin selling the same items."
Aside from the substantial domestic user base, there is an even greater opportunity for those interested in exploiting the export market. eBay has 14 million registered users in the UK and 275 million worldwide, highlighting just how big a marketplace businesses can potentially reach.
The top five exports from Ireland, through eBay, in terms of value, are:
- Computers
- Photographic equipment
- Consumer electronics - video
- Consumer electronics - audio
- Telecommunications products, such as mobile phones
LuzernTech is one of Ireland's biggest exporters on eBay. The Blanchardstown-based company sells between 10,000 and 12,000 refurbished electronic goods a month on behalf of electronic goods manufacturers like Creative and Archos. Around 60 percent of LuzernTech's sales are made on eBay.
"[eBay] is a global marketplace. People should see it as an opportunity to get new customers and to be prepared to be international. The reality is the customers will be from anywhere but Ireland," says Ken Doyle, CEO of LuzernTech.
Getting started
Setting up an eBay shop is a quick way for businesses to establish an e-commerce presence. It can also be a good way to get noticed, as eBay is the biggest purchaser of Google Adwords in the world. This means if someone searches Google for a particular product, they are likely to get results featuring ads for products available in eBay shops.
"You can get an eBay shop set up within a few hours. Then, the only costs involved are the listing costs and your payment costs for using PayPal and the final value fee for using eBay," says Munden. Businesses are charged a 'final fee' when their item sells; is typically, a small percentage of the sales total. (For more on PayPal, see Issue 189.)
Munden maintains that you don't need to be an IT professional to get started on eBay. "We have tools that allow a non-IT person to be able to set up and sell on eBay within a few hours. We have eBay shops which allow you to replicate your own website and just put it up as a shop. You can actually research what is selling and what isn't selling through our business area," he says.
eBay has a business centre where SMEs can read up on what they need to get set up online and book a consultation with an eBay advisor if need be. eBay also runs workshops and courses around the country through its eBay Academy . These workshops are often run in association with county enterprise boards or organisations like the IIA or the Small Firms Association.
Running the shop
Once a business has established an eBay shop, it can auction products or services for a particular period and set a reserve price. It can also provide 'Buy It Now' prices. This option allows sellers to set a price which consumers can purchase the product immediately; effectively skipping the auction process. This is a popular option for retailers who want a particular margin rather than relying on auction prices.
For companies who want to list items online in bulk, eBay has a tool called Turbo Lister, which allows businesses to list dozens of items for set periods at different prices every day. Using such tools effectively is important if businesses want to make their eBay presence felt.
"Take [eBay] seriously. If you don't, you don't get the buyers. You have got to put a bit of time and effort into understanding how [eBay] works so your products get found. If the buyers have a negative experience they won't buy from you again," says Doyle.
Online fraud is also a worry for any business selling online. eBay insists that nearly all of its transactions are legitimate and that using PayPal as a payment option will help prevent fraud. "We have put together quite a large team that look at supporting all our merchants to make sure that any of the listings are safe and the company doesn't have any fraudulent purchases. PayPal is one of the most secure payment options on eBay. You tend to find you will get your payment much quicker and because PayPal has verified the accounts of the buyers," says Munden.
That said, eBay hopefuls should educate themselves fully about the possible risks of online selling, and plan their strategy accordingly. Only then will their internet store, and their business, reap the rewards of the online marketplace.