So many tools, so little time. Where do you start? The possibilities can seem confusing and overwhelming. Even if you have some knowledge of and experience with the process of website development, the number of options that are available for selling your products online can be daunting. This article will give you some examples of the kinds of solutions available and may help you decide what you want to do next. All examples and fees (at the time of this writing) are summarized in a Summary Table at the end of this article.
In general there are three ways to sell your products online:
- through someone else's store, which we call Consignment
- through your own store within a larger store, which we call a Community Shop
- through your own, independent site, which we call a Web Store
We believe the terms, Consignment, Community Shop and Web Store will help clarify the differences between the selling options.
Consignment:
You list your item in somebody else's Web Store. Listing a product on Consignment is a fairly straight forward process that involves filling out an online form for each item which includes the description, price and photos of the item. Additional information, number of photos and options vary.
Perhaps the most well-known example of this method of selling online is eBay. You list an item for a fee and if and when it sells, you pay a commission on the sale. The fees charged depend on the value of the listed item.
With Amazon, sellers are charged when their item sells; commission, transaction and closing fees vary according to the type of item listed. Some categories require approval before they can be sold on Amazon.
A Consignment type Web Store can be focused on a niche market. For artists and crafters, two examples are Etsy and Artfire. Etsy charges 20 cents to list each item and 3.5% for each transaction. A basic membership with Artfire is free with free listings and no transaction fees. More benefits are offered for a monthly fee of $7.
Another option within this category is classified ads. Sell.com is an example. Listing fees vary with the item but transaction fees are not charged.
In all the Consignment examples, your item is displayed along with others when the Web Store's search engine displays your item's category or matches a search word or phrase in your item's description. These sites get lots of traffic and have a huge customer base. And there's a whole lot of competition too. The earrings you list may be one pair in 12,000.
With most Consignment Web Stores, you, the seller, must collect the payment. Most sellers use a Paypal account which allows buyers to use a credit card to buy your items. And you'll pay transaction fees if they do.
Amazon is an exception. Amazon processes all the payments and distributes the proceeds to the seller.
Fees for Consignment selling vary among Web Stores, as do the aesthetics of the pages in which the text and photos of your items appear. You have very little control over color schemes, page layout or advertisements. See the comparisons in the Summary Table.
Community Shop:
You sell your items from your storefront that is part of a community of shops. Forms are used to upload the information for each item and a seller may also be able to manage the appearance of their storefront. In addition to listing & closing fees, you pay a monthly subscription fee.
With a Community Shop at eBay, you have some control over the appearance of your storefront. Your choices include color schemes, menu items and page layouts with your own logo. eBay's logo appears at the top of your storefront page.
Amazon also provides sellers with an option to have a storefront. Some storefronts display a small logo identifying the seller while the rest of the page is clearly in Amazon's format.
Collection of payments from buyers and distribution of funds from sellers with the Community Stores offered by these two hosts are consistent with their Consignment opportunities: Ebay leaves it up to the seller to collect payments and Amazon processes payments for you. A Summary Table of fees is located at the end of this article.
Web Store:
You sell your items from your own Web Store. This option requires the most resources from the seller-both time and money. Essentially, you or someone you hire must design and implement the Web Store. Each Web Store includes the following elements:
- Domain name
- Web host
- Product and content pages which must be designed and programmed to include menu items, photographs, buttons, graphics, etc.
- Shopping cart
- Secure method for collecting payments from buyers
Solutions are available that include most of above elements as well as templates for creating your store's look and feel.
All of the Web Store entries in the Summary Table below provide web hosting, store templates and a shopping cart. With all but Amazon, sellers must also set up their own merchant account to collect payments. Amazon provides a secure payment collection system.
Summary Table:
Please note that fees are one factor that a seller could consider when choosing an online sales solution. Other features that a host may provide should also be taken into account: reliability, support, marketing and design tools, disk space, bandwidth, number of products and more. This article does not make any comparisons among companies other than the fees charged which are summarized in the following table.
For the purposes of comparing fees, a single item will be used as an example--a hand painted silk scarf listed with one photo, selling for a fixed price of $25 with standard shipping. The seller and buyer are both in the United States. The type and price of the product, the number of photos and other options may incur additional fees.
| Fees | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Host | Type | Setup | Listing | Trans-action | Com-mission | Closing | Paypal or Merchant Account * | Monthly Sub-scription | Monthly Merchant Account** |
| eBay | Consignment | $0.35 |
12% of $25 = $3.00 |
(2.9% of $25 = .73) + .30 = $1.03 |
|||||
| Amazon | Consignment | $0.99 |
15%of $25 = $3.75 |
$0.46 |
|||||
| Etsy | Consignment | $0.20 |
3.5% of $25 = $0.88 |
((2.9% of $25 = .73) + .30 = $1.03 |
|||||
| Artfire | Consignment | ((2.9% of $25 = .73) + .30 = $1.03 |
$7 Verified |
||||||
| Sell.com | Consignment | $6.00*** |
(2.9% of $25 = .73) + .30 = $1.03 |
||||||
| eBay | Community Shop | $0.35 |
12%of $25 = $3.00 |
(2.9% of $25 = .73) + .30 = $1.03 |
$15.95 Basic Store |
||||
| Amazon | Community Shop | 15%of $25 = $3.75 |
$39.99 |
||||||
| Volusion | Web Store | $129.00 | (2.9% of $25 = .73) + .30 = $1.03 |
$49.95 Bronze |
$30 |
||||
| eBiz | Web Store | (2.9% of $25 = .73) + .30 = $1.03 |
$49.95 Express |
$30 |
|||||
| Yahoo | Web Store | $50.00 |
1.5% of $25 = $0.31 |
(2.9% of $25 = .73) + .30 = $1.03 |
$39.95 Starter |
$30 |
|||
| Pro Stores | Web Store | .5% of $25 = $0.13 |
(2.9% of $25 = .73) + .30 = $1.03 |
$29.95 Business |
$30 |
||||
| Shopify | Web Store | 2% of $25 = $0.50 |
(2.9% of $25 = .73) + .30 = $1.03 |
$24.00 Basic |
$30 |
||||
| Homestead | Web Store | (2.9% of $25 = .73) + .30 = $1.03 |
$24.99 Enhanced |
$30 |
|||||
| Amazon | Web Store | 7% of $25 = $1.75 |
$59.99 WebStore |
||||||
* If credit cards are accepted, either Paypal or another merchant account may be required. The %2.9 discount rate and .30 transaction fee are typical but may vary according to many different parameters.
** Typical monthly charges for Credit Card Processing and Payment Gateway combined
*** Accessory Category
Finally, you can roll your own Web Store: register a domain name, select a web host, program your own pages, program or rent a shopping cart solution and set up your merchant account. FloweringEnterprises.com was created this way. The following services, software and books are used for this site and are highly recommended:
- Domain name and web hosting are provided by Yahoo
- Dreamweaver is used to program html, css and javascript
- Securenetshop.com provides the shopping cart solution
- Our secure payment processing is provided by Fast Transact and Authorize.net
If you build it...well, that's another article-on Search Engine Optimization.
Flowering Enterprises, Inc. - January 2009
