As an entrepreneurship consultant who advises numerous small business clients on ecommerce strategies, I often get asked: "Is selling on eBay actually safe and worthwhile?"
It‘s a fair question. After all, eBay connects over 179 million buyers and sellers across the globe. Wherever huge sums of money start changing hands, the risk of problems inevitably arises too.
So let‘s take an in-depth look at the realistic risks sellers face on eBay, along with key precautions you can take. My perspectives come from both academic research and firsthand experience as an eBay merchant myself.
eBay By the Numbers
To start out, we need to understand just how massive the eBay marketplace has become:
- Over 1.5 billion listings live at any given time
- Total 2019 gross merchandise volume = $90.4 billion
- Active buyer base has grown 8% year-over-year
- 25% of all ecommerce growth in 2018 came from eBay alone
Raking in almost $100 billion in sales, it‘s no wonder why entrepreneurs want access to eBay‘s huge customer base. Yet whenever a marketplace reaches this scale, maintaining complete buyer and seller safety becomes challenging.
So what are the key dangers?
Top Safety Risks Buyers Face
Although the majority of eBay transactions go smoothly, various scams and deception continue victimizing buyers. Some common issues include:
Knockoff products – Counterfeit versions of hot items like luxury bags, watches, and sneakers proliferate on eBay. In 2019 alone, over 34,000 fake Apple products got removed.
Bait and switch – Sellers advertise an expensive product at an unbelievable price to drive bidding, then send a cheap knockoff version. Victims lose money with little recourse.
Non-delivery – After receiving payment, an unethical seller simply neglects to ship out the purchased item. Tracking shows no updates.
Phishing – Scammers posing as PayPal or eBay customer support contacts buyers attempting to steal login or bank account information.
Returns fraud – Bad buyers force unwarranted refunds by claiming an item arrived damaged or not as described. Sellers lose both the products and profits.
Top Issues eBay Sellers Face
For entrepreneurs interested in selling products through eBay, several critical risks also exist including:
Chargebacks – After you ship an order, the buyer later issues a chargeback through their credit card company forcing an immediate refund. Even if the order seemed 100% legitimate.
Suspended accounts – eBay can abruptly suspend seller accounts without warning due to dubious buyer complaints, questionable products (like health supplements), or terms of service technicalities.
Low profits – Between commissions, advertising fees, and production costs many sellers end up making shockingly little per transaction. Scaling profits substantially proves difficult.
No customer ownership – Because eBay owns the platform, merchants can‘t export customer data to nurture relationships outside the eBay ecosystem. You build their brand rather than your own over time.
Declining web traffic – As Amazon Marketplace continues dominating, more buyers abandon eBay making it increasingly hard for sellers to get found. Expect perpetually rising advertising costs.
Smart Precautions eBay Sellers Need to Take
Hopefully these risks scare you a bit about selling online without taking enough precautions. The good news? Many pre-emptive steps help merchants avoid or manage problems:
Vet buyers – Review buyer profiles, previous reviews, and order histories looking for any red flags before selling expensive or risky products.
Document condition – Take ample photos and write highly detailed descriptions of your items so lying buyers have much less leverage for starting cases.
Master shipping – Carefully pack orders, always ship with tracking, and take clear photos proving you shipped the correct product in new condition.
Insure valuables – Purchase 3rd party insurance for expensive/fragile items in case postal carriers damage or lose a package.
Automate messaging – Use email auto-responders to remind customers when payments are due and provide tracking info once an order ships.
Diversify sales channels – Don‘t rely exclusively on eBay so chargebacks or restrictions won‘t crater your entire business. Expand across other channels like Amazon, Walmart Marketplace, social media storefronts, and your own dedicated ecommerce store.
The Bottom Line – eBay Isn‘t Risk-Free, But Can Pay Off
In closing, selling products through the eBay marketplace provides incredible access to over 179 million global buyers daily. However, substantial risks exist too if you don‘t take adequate precautions.
As an entrepreneurship consultant, I believe eBay remains a viable sales channel for many small business owners. Just approach it with eyes wide open, start slowly, follow all recommendations, and diversify across multiple storefronts. This balances the amazing upside with the scary downsides.
And remember, platforms like eBay want to keep their ecosystems thriving on both sides. If you face any buyer or seller issues, don‘t hesitate to immediately contact customer support and clearly explain your situation.
Have you sold products on eBay too? I‘d love to hear about your experiences in the comments! Please share both the positives and negatives. This helps all entrepreneurs contemplating if eBay makes sense for their brand.
