Would you be better off shifting your eBay spend towards Adwords? This is a question that many eBay sellers may never ask of themselves, but those with online stores should do the numbers!
There are a growing number of eBay sellers who do have their own online stores either of their own software and design, or provided to them by default if they are ChannelAdvisor or Marketworks users.
If you don’t have your own store, then I certainly recommend investigating it. Other sales channels add revenue to your business, and when you have other sales channels you don’t have all of your eggs in the one eBay basket.
eBay marketing costs
Your eBay marketing costs are simply the fees you pay to list your items, sell them, and run your eBay store. You pay these marketing fees to sell your products to eBay customers.
You can total up your fees fairly easily, by using the invoice totals that eBay provides.
With this total you should be able to see how much it costs you in fees to generate a particular level of sales, and profit.
Adwords marketing costs
Using Google Adwords is straightforward and can be very economical. You need a website to send your customers to, and Google Analyitcs to effectively monitor and track your traffic and conversion rates from your adwords ads.
To learn more about Adwords use the link at the bottom of this page.
Google Analytics is a free product from Google, and really very good. We use it on all of our sites and I recommend you look at it to.
Comparing the spend
Once you have some Adwords campaigns running and sending people to your online store you have the ability to measure their conversion rate to sale.
Comparing the spend between eBay and Adwords is simple enough, but there are a few more factors to take into account, such as :
- Different pricing on your website/eBay auctions
- Costs to create and manage your online store
- Time taken to manage each sales channel (eBay and your store)
When you take these factors in to account, you can start to analyse whether or not it is as cost effective to take marketing spend away from eBay, and put it towards Adwords.
For example, you might pay eBay $100,000 per annum in eBay fees (if you are a sizeable seller).
Maybe that generates $1mil in sales, and you net $100,000 or 10%.
If you spent $100,000 on Adwords, how much in sales would it generate? With your conversion rate, maybe you sell $500,000 of products, but because your online store prices are higher you make $140,000 profit.
This would prompt me to work a little harder at building a better online store, and putting more effort into it, as dollar for dollar, it would generate more profit.
Of course you may not be able to spend $100,000 per annum on your Adwords campaigns, and you may not want to stop selling on eBay altogether but as a seller you should certainly be looking for ways to broaden your customer reach, increase sales and reduce risk.
Online store software
eBay tools with online stores