How do you start an online sales business? No one needs to tell you that online sales are quickly moving to dwarf traditional retail. Shopping malls and physical stores are closing everywhere, malls are empty, and the wake of the recent pandemic is having a long-lasting impact on physical retail.
For the foreseeable future online shopping is where it's at. More and more people are realizing. The rise of new online stores is apparent on every platform you shop. Many of those stores will vanish over time, while others will succeed.
Having successfully run one of these stores for several years now, we've made a lot of our own mistakes. Making your online store into a fulltime business is not an easy thing and it doesn't happen overnight. There's big challenges in sourcing good inventory, putting it up for sale, and in getting it to the customer.
While there's an abundance of sales channels out there, each one has its own pros, cons, and quirks that can trip up the new seller pretty quickly and create a lot of extra work or lost time. Below, you'll find some of our recommendations for selling your goods online, as well as some of the things to watch for on each of them.
eBay
Everyone is familiar with the flea market of the internet. eBay is a household name, up there with Amazon, but serving an entirely different market. Where Amazon is more like a shopping mall, eBay is like a swap shop.
Selling on eBay, you have two types of options: auctions or fixed-priced sales. In an auction, buyers will bid on your merchandise, while fixed-price listings sell for a set amount. You can also accept an offer on your merchandise.
Pros:
Sell used goods: eBay allows several types of product conditions, ranging from brand new to items sold for parts only. Correctly labeling your product's condition, though, is absolutely crucial to your reputation on the platform. eBay's feedback system will directly affect your ability to sell on the platform. A history of poor ratings can get your account suspended entirely.
Easy to ship from: eBay provides a shipping label system built into the platform. They also offer significant discounts on shipping labels from a variety of carriers. While some sellers choose to use other shipping platforms for their labels, there is another advantage to using eBay's label system. That's when the time comes that a carrier will, inevitably, lose a package or a buyer will claim it never arrived. Printing a label with eBay's system allows eBay's resolution people to see that you, as a seller, bought the label through them and made no alterations to an address. This way, if you are met with a chargeback, eBay can provide evidence on your behalf that the product was shipped to the address on the order. From there, your own customer service policy can decide how to handle each case.
Vintage and collectible market: eBay has a huge collectible market, where you can find a lot of unique items. They also offer a verification service for in-demand products that are commonly faked, such as handbags or shoes. While not all sellers use the service, it is offered for those that want to make use of it.
Easy to list: Whether you list your products on eBay directly or through a third-party tool, eBay provides two different APIs if you want to build your own connection, and also integrates with several popular Ecommerce platforms. If you are going to sell across several different platforms, having a system to automatically sync your inventory across them is a must.
CONS:
Lowball Buyers: People shopping on eBay are looking for a deal. While it's possible to sell big ticket items, you'll see the most sales volume with lower-priced items.
High Fees: Nearly every platform has some kind of fee for selling. eBay has many fees of different kinds. For each sale made, you'll pay a transaction fee, as much as 12% in some categories as of this writing. If you purchase labels through eBay, obviously you pay for the label. You can always have the buyer pay for shipping, but eBay will offer you incentives for offering "free" shipping to buyers. If you want to run any kind of actual business on eBay, you will want a storefront.
A storefront, naturally, costs money. You can start small, but if your business grows you will want to consider an anchor store subscription, to avoid yet another fee. Listing fees! Every listing you create, eBay has a fee for. You're allowed a certain number of "free" listings each month, after which you pay a small amount for each additional one, the cost of which is determined by your subscription plan.
Since eBay took over managing all payments from PayPal, staying on top of your fees became more transparent, but also more difficult at the same time. eBay offers a screen to track every single fee, but when you're also trying to run a business, it can be difficult to go through an extensive list of microtransactions every single day. eBay knows this, of course. Just keep in mind that eBay cares a lot about a business. It just isn't yours.
This brings us to another fee, which is promoted listings. Your visibility in eBay's search (though they deny it) is directly linked these days to whether you pay for promoted listings. You can easily configure your promoted listings allowances in the promotions platform, and decide what percentage of each sale you're willing to give eBay in exchange for enhanced search visibility.
Scammers
People have the opinion that eBay is rife with scams. Having sold on the platform for many years, and in high volume, eBay is actually one of the lower platforms in terms of scam attempts. It happens, but not as often as you might think. If you take to time to understand eBay's clunky and extensive "seller protection" program, you can plan ahead to ensure that you're always ready when someone does try to pull a scam. For example, eBay will side with the seller if they provide valid tracking (like buying your shipping labels through them) that shows that the seller did follow through on their commitment to ship an order to customer. If you obtain signatures, too, eBay will usually back you up.
Poshmark
Poshmark is an entirely different kind of marketplace from eBay, but does have some similarities. The platform was recently purchased by a South Korean company in 2022, so there may be changes coming down at some point. Poshmark is more like opening a closet, and in fact your storefront is called a closet. Poshmark's departments have expanded a lot over time to encompass more than clothes and fashion accessories. Electronics, home goods, and small appliances are all things you can now find on Poshmark.
Pros:
Friendly Community: Poshers tend to be a pretty supportive and friendly bunch of shoppers. They appreciate a deal, too, but they're more willing to bargain and work out a deal. As long as you can accurately advertise your merchandise and you communicate well, we've found that most Poshmark customers are happy to give a good review and follow you for more deals.
Ease of shipping: Items sold on Poshmark should be, in general, less than 5 lbs. You can ship items over that, but you'll pay more for it. When you get a Poshmark sale, the company will email you a label to use, meaning all you have to do is print and ship your item. Once the customer receives it and approves, they have a short period to mark it as acceptable and your funds for the sale are released.
Great for Brand Building: Poshmark gets a lot of traffic. People also tend to stay on the site browsing for quite some time. If you're getting a lot of likes and shares, it can be a great way to spread your brand, especially through the built-in sharing feature that you can use each time you post a new item. Just be careful of oversharing. There's a "Poshmark Jail" that's a silent ban on listing or sharing new items if you share too many in a day. It's an anti-spam feature that can catch a lot of people up and results in an inability to share or list new items for up to 24 hours.
Cons:
Difficult to stand out: Unless you have something very unique, it's difficult to stand out while just browsing listings.
Commission: Poshmark charges, at the time of this writing, $2.95 for items under $15, while items over that mark they charge a 20% fee for. This is in line with our next marketplace, which is big one and a difficult one, but worthwhile if you can do it right.
Walmart Marketplace
One of the world's largest and most recognized retailers has their own online marketplace and it accepts the likes of mere peons such as the rest of us. Getting started on Walmart comes with the need for a lot of preparation to make sure you can get it right, so it's not a jump in and start listing sort of deal.
Pros:
Huge amounts of traffic: Millions of people are shopping Walmart's site all day, and your merchandise is shown right alongside their own. This generates a huge amount of exposure for your brand, and if you're working on getting seen in search results, being on Walmart can be an awesome boost for your business.
Connects easily with many platforms: If you use a backend system like Shopify, Big Commerce, Magento or others, there is likely a Walmart app that will connect your store to keep your inventory in sync. However, there's a caveat to that and we'll get to it.
Cons:
Difficult to list product: Walmart is not an easy marketplace to create a product on. It isn't that the tools they have in the seller center are complicated, it's the sheer amount of information required for each product you list. In addition to that, there is the UPC match. Like most marketplaces these days, Walmart requires a UPC/EAN/ISBN or other product identifier. However, whatever UPC or identifier you use will link your product with every other one that has the same identifier. This means that if you enter the incorrect identifier then your product will be listed as the wrong product on the site.
Now, this also means that if the seller who first submitted that identifier put it in as the incorrect product, every one listed thereafter will show up as that product. This requires that you do some research prior to posting your product under that identifier and then follow up to ensure it is listed correctly. You can submit a ticket to have Walmart look into any incorrectly listed product, but this is a process.
High Fees: Walmart charges a 20% fee on all transactions, making it one of the higher commission rates.
Almost no seller protection: Walmart has little in the way of seller protection. Customers are the primary focus and Walmart is so large that sellers are a dime a dozen. This makes Walmart rife for scammers to steal merchandise from you, if you don't protect yourself. All a buyer needs to do is tell Walmart that the item was lost after delivery and they receive an instant refund. The only way around this is to have the buyer sign for every package, and then submit that proof to Walmart's service team, who will credit the sale back on your next payout.
In addition to this, in nearly all returns you will pay for the shipping, and you'll be encouraged to provide free shipping, too, and two day shipping if you want all the benefits.
Amazon
As the largest online retailer in the world, it's difficult to ignore Amazon. The site has three channels for selling your goods.
- Amazon FBA: Fulfillment by Amazon is for sellers of new goods.
- Amazon Renewed: For sellers of used, refurbished, and open box electronics.
- Amazon Handmade: For artisans who make handcrafted goods.
Pros:
There's no bigger source of retail traffic than Amazon and almost half of shoppers start there. Buyers who come to Amazon are looking to buy. The FBA program provides warehousing, shipping and packing, removing all the work for a fee.
Cons:
Competition. You're in a big sea of other sellers, including a lot of generic overseas brands, so competition can be very stiff. It's so stiff in fact that there are a lot of cutthroat sellers out to sabotage others through bad reviews or other underhanded practices.
High commissions: On average, you'll pay a 15% commission fee. If you're using the FBA service, you'll also pay an additional percentage for storing and shipping your goods.
Facebook Marketplace
Facebook has been making inroads into the Ecommerce space for several years. From Facebook shops to Marketplace, Meta's premiere product is a moneymaker for sellers and the company, both.
Over the last few years, Marketplace has been evolving from a basic sales platform with a lot of gaps to one that's still far from perfect, but rapidly gaining users and features.
Pros:
Large userbase: Facebook may not be the big social media platform of the younger generation, however, that older userbase is the one with the money. Those kids that grew up using Facebook are now the one with jobs and income, and they're the ones using Marketplace to shop and sell.
Low fees: Unlike some of the other entries, Facebook charges a low 5% fee or as little as $0.40 for orders below $8. That includes taxes and payment processing. There are even periods when Facebook suspends fees or offers free shipping just to encourage usage.
Relationship building: Shoppers can easily contact sellers directly through Facebook, which makes customer interaction easy. This can be a con, if you're a small company with a small staff, as you can be suddenly deluged with a lot of messages at once.
Cons:
Branding can be difficult. Kind of like Poshmark, folks are looking for a deal and their loyalty is to the price and not the seller. Likewise, Facebook has no real vetting process for sellers, meaning anyone with an account can start selling.
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No matter where you choose to start your Ecommerce journey, there's a wide field out there. Every platform has their own requirements and differentiates on what you can and can't sell, and in what conditions. Make sure you do thorough research and have a long-term plan for how you're going to use that platform in your overall business structure.
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