Shopify vs. eBay : Where Should I Start Dropshipping?

Creating an online store on Shopify (or any platform) vs. selling on eBay (or any marketplace) is really a question of two different businesses models that both have their advantages and disadvantages. Here are some things you should consider when making your decision:

1. Driving Traffic

Shopify is one of the easiest e-commerce platforms to get up and running, and you can create a store that looks great in a matter of a day. But it is important to understand that having a nice looking store with loaded products does not guarantee traffic. Investing time and effort into marketing your store and driving traffic to it is essential. There are multiple ways to drive customers to your store: Google/Facebook ads, keyword rich blog posts, accurate product descriptions for SEO, digital community building (such as posting on Quora) and more. However, this will take time and money, where on eBay there is already traffic and an audience looking for your products. eBay spends millions of dollars to drive traffic to their site, and you can benefit from that by listing your products. But with that traffic that eBay provides, comes a price.

2. Payment and Fees

Shopify’s cheapest plan starts at $29/month for an online store and has 2.9% + 30 cents credit card transaction fees if you use their Shopify payments. No other fees are applied if you use their Shopify Payments (which is essentially the Stripe payment processor). The basic plan comes with the ability to list an unlimited amount of products in your store.

eBay does not have a monthly fee, however they have what they call “insertion fees” and “final value fees”, which means they charge you for each product you want to list (insert). They will also charge you a percentage of the final sale value of the product. There are also fees for choosing special duration of listings, multiple categories and other advanced listing fees. eBay fees can stack up rather quickly to outweigh the fact that there is no monthly fee to have an account.

3. Customer Retention

The biggest drawback to selling primarily on eBay is that you are not building a relationship between your brand and your customer. eBay is a marketplace of products where customers are driven by finding a product from a seller they can trust. Shopify is a retail shop in which customers are driven by trusting the shop/brand and buying the products that they trust the retailer to list on their store. Think of it this way. People like to head directly to a certain apparel store in a mall because they know they will have the clothes they like and will also find clothes that they didn’t even know existed that they will also enjoy. This is because that store/brand has a relationship and understanding of their buyer and seeks to provide them with the products they are looking for. The equivalent of eBay in the offline world would be if you took all the stores in the mall and moved their products into the middle of the food court and then organized them by product type. You would go to the mall looking for a shirt, and the supplier of that shirt would be standing behind it saying you can trust me because I have “x” number of reviews, while that same shirt would be hanging right next to it with another supplier saying the same thing maybe with more or fewer reviews. So think of the next time that customer is looking for a shirt. They are not going to walk into your store, you will just have to hope they find you again in the sea of shirts- that is the difference in selling in a marketplace vs. a store.

So when getting started, sure you can do both. Maybe eBay is a good way to start getting sales in the short term to build momentum. On the other hand, Shopify (or any online store) is going to be tougher to gain traction, but the long-term and more sustainable business model.

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