As an eBay consultant, a common question from eBay sellers is, “How can my competition be selling this product so cheaply? I can’t even buy it for what they are selling it for.” This observation is correct. Many large sellers offer their products on eBay at a loss. And they are doing it on purpose.
eBay is one of the most visited websites on the internet, and one of the most popular marketplaces in the world. It is also is a place where millions of buyers are congregated together ready to buy products. Large sellers and big corporations see the value of having a presence on eBay. Here is the strategy.
A big corporation sets up shop on eBay and offers its products at a lower price than the competition in order to get the sale. Once the sale is made, the large company has the buyer’s address and email address and can market to that customer forever. When the seller ships the order, they entice the buyer to visit their website by using a percent off coupon or a free gift with their order. Big companies are using eBay for customer harvesting. Sure, they may be taking a $10 loss on each sale, but they are recruiting customers who may buy from them for years to come.
This strategy works especially well if the product is some type of consumable like ink cartridges, batteries, skin care products, gourmet food products, vitamins, or pet supplies. Consumables get used up and have to be replenished on a regular basis. A large company could find a customer on eBay, establish a relationship with the customer, and receive $20 or $30 a month from this customer for many years. The long-term revenue far outweighs the initial loss on eBay.
The next time you are checking out your eBay competition and find a competitor whose price you cannot beat, take a look at their feedback page. Is it a large seller with hundreds of sales a month and a huge inventory? If so, they are probably only on eBay for one reason, and it isn’t to make a profit. Large companies are using eBay to harvest customers and direct them to their own website.
To learn more about eBay selling, visit the eBay Coach Blog.