best place to start an e-commerce business

Where is the best place to start an e-commerce business – eBay, Amazon, or an online store?

At Frooition we work with eBay, Shopify, and BigCommerce. Enhancing the customer experience of marketplace listings, and developing custom standalone stores which have the capability to list to multiple platforms, including Amazon. All of these e-commerce options are proven to grow profitable businesses.

But which is the best one for you to start with?

We will answer this question by covering the advantages and disadvantages of each platform, whilst running through a step by step plan that you can start straight away!

There are 4 main considerations for deciding where is the best place to start an e-commerce business:

  1. Goals
  2. Level of experience
  3. Budget
  4. Time

We will go through each of these considerations, to evaluate your own personal situation,  as the best place to launch your business will be determined by your specific circumstances.

goals

Your goals are the most important thing to consider when deciding the best place to start an e-commerce business. Do you want to sell online as a side business to complement your full-time income, or do you want e-commerce to be your full-time job? Are you planning to source stock and sell at a profit or are you the manufacturer? Is e-commerce purely a revenue stream, is it a vehicle to strengthen your brand, or is it both?

For those who are looking to create a side income, working just a few hours a day, eBay is the perfect platform. You don’t even have to ever look into other selling channels as eBay alone can provide you with the income level you’re looking for, even from selling part-time.

People who are looking for serious commercial growth should aim to use all 3 platforms to maximize their business’ potential. This usually means starting with eBay and then expanding to an eCommerce shop and Amazon. Not only does this allow you to reach more customers and therefore make more money, it also diversifies your risk. Selling on multiple platforms means that you won’t lose your entire business if something goes wrong with one platform.

It may be that massive sales are not your primary aim. Strengthening your brand online and building awareness may be the reason you are looking to sell online. If this is the case, being on all marketplaces is important because that will give you exposure. Equally, your own independent web store is important because that is a place to offer deeper information about your products and brand. All three platforms would obviously be quite a grand undertaking for someone who was not already selling online, so if you are new to e-commerce I would advise to start selling with eBay to get some selling experience and generate cash flow, then expand to a custom branded multi-channel store.

If you’re totally new to e-commerce and have very little knowledge on the topic, eBay would always certainly be the best place to start your e-commerce business. Why? Because eBay has millions of customers just waiting for new products, and it’s the easiest, most user-friendly selling platform to use when starting your first online business.

Traffic is probably the biggest disadvantage of a stand-alone website for new sellers. You really need to know what you’re doing marketing wise to achieve any decent results. With your own eCommerce site, it’s not enough to have a beautiful shop. You have to know exactly how to promote it – otherwise, no one will know your products are there to buy. Marketing an e-commerce store can be a full-time job in itself, and involves many skillsets which take time to master. If you are inexperienced in e-commerce, you should give yourself learning time and expect a bit of trial and error when you start marketing a new site.

Ebay is massive and many businesses grow into turning over millions without ever leaving the platform. On eBay, you can start with one listing, selling a used item you already own and learn along the way. You do not have to worry about attracting customers to your site.

If you’re totally new to the online selling world, eBay is the best place to start an e-commerce business. Begin with used goods, and then once you’ve gained some experience, you can look at expanding out into multi-channel selling.

Budget

How much money can you invest in setting up your business and buying stock? Ebay is always the best place to start an e-commerce business on a shoestring.

On eBay, you can start selling with no investment at all. Just start selling unwanted items from around your house. You can take product pictures with your phone camera and create listings in minutes. This is exactly how millionaire eBay seller Linda’s Stuff started out on eBay.

With Amazon, you’ll need to purchase brand new products in real bulk to make it work. This, of course, means a higher level of investment compared to eBay. You can still start with just one product on Amazon too but you’ll need to source it in bulk. Besides that, to list your own unique products in separate listings you’ll need to subscribe to Amazon’s Pro account, which starts at $39.99 a month.

This is probably less daunting if you already sell a product and can make some sort of prediction for stock volume, but if you have no e-commerce experience, or are going to be selling a new product, making a large initial stock investment is a big risk.

An eCommerce Shop is another step further into your pocket. Design and set up costs aside, you’ll need to buy a range of products to sell, and pay to promote them. There’s no point in starting an online shop with just one product unless it’s a very popular product that is a niche in itself, and even then, that means it will probably be extremely expensive to bid on keywords for paid search, and very difficult to build SEO. So, no matter what your inventory is, advertising and promotion will be a big cost.

If you are on a shoestring, start with eBay. You have nothing to lose, but stand to learn a lot of valuable lessons and make a profit while you do so. If you have a more serious budget, and existing eBay selling experience, you can start looking into setting up your own eCommerce Shop and linking that to an Amazon store.

Time

If you have a full-time job, you should start with a platform that is less time-consuming. Many people start building eCommerce shops not realizing how much time they have to put into them before they’ll even get that first sale. This is definitely NOT for people who can only spend a maximum of 1-2 hours a day on their online business.

Amazon is also relatively easy to maintain, especially if you use Fulfilment by Amazon – a service which takes care of your stock storage, order processing, and dispatch.

An eCommerce shop is the route that requires the most time and energy on your part. Everything takes time when we talk about creating a successful eCommerce shop – starting from setting it up, adding products, creating descriptions and ending with the actual promotional part – which is a science in itself. It’s definitely not suitable for people who can spend just 1-2 hours a day on the project.

It is possible to do it with just 1-2 hours a day, but anyone doing this should expect to spend many long months on it before they even see their first sale.

Compare this to eBay where you can list a product in the morning and dispatch your first three orders that very afternoon and it’s a BIG difference.

Summary

If in doubt, start with eBay. Even just selling a few things from around your home could be a valuable learning exercise if you have no previous experience. You can experiment without investing, and find what works for you in terms of shipping, returns, and stock.

If you are confident that e-commerce is where you want all, or the bulk of your revenue to come from, then you need to sell multi-channel. Starting with a custom branded multi-channel site would be the easiest way to do this.

Likewise, if you are building a brand, then multi-channel will be the way to go. If you are less experienced in e-commerce, start with one platform and perfect your branding on that before spreading out.

If you need any further advice on your e-commerce journey and creating a brand online, you can contact us to discuss with one of our e-commerce experts.

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