A. Dear Stephen:

I would say it depends on your goals, your resources and your long term plans for your online business. It's not a question of which is better - your own website or storefront in eBay; rather, it is a question of where your target market can be reached. If you are sure that your target market uses eBay extensively, then an eBay storefront would be best. But if not, then it pays to try to create presence on where you can reach them.

Many etailers nowadays are using multi-sales channels for their businesses, even the big boys. Hence, big companies such as Dell computers, Sears, Samsonite luggages, Novica (of National Geographic) have stores on eBay in addition to their own websites (albeit they use eBay more as liquidation of their excess and returned inventory).

If you have a steady supply of product to sell (not just based on what you can find in your attic), I would go create a website - and THEN use eBay as an additional sales channel. You just have more room to operate and grow your business with having your own store.

Below is a list of some pros and cons of each course of action to help you decide which path is best for you:

Creating Your Own Website

Pros

• Allows you to establish your own "real estate" on the Web;
• Allows you to attract a bigger audience; not limited to eBay buyers (not everyone buys on eBay)
• Scaleable as it allows your business to grow;
• Allows you to give more information about your business to your visitors and give them reasons to trust you
• Allows you to give more information about the product, play around with factors that can increase conversion
• Gives you a more professional look
• Makes you look like a "big" business (an e-commerce seller that also sells on ebay "looks" so much bigger than a purely ebay seller)
• You can put in as many items you want without paying listing fees
• You can sell as many items as you can without paying value added fees
• Less restrictions than eBay (you are more free to write your sales copy)
• Easier to market on the Web
• Measurement and tracking of sales is easier to do because of greater flexibility in installing statistical software

Cons:

• Requires technical know how to create a website (or money to pay someone to do it for you)
• Expensive especially if your website requires special programming
• You have to think how your site will look or hire a web designer to create your website
• Fixed price (price you set is what you get)
• You're basically a "nobody" and you have to build your reputation, brand and traffic from scratch. 
• Harder to market and you may need to spend more on advertising.

Pros

• Auction format; prices can go up higher than you originally set it for
• eBay's brand and size of its market
• Gives instant access to millions of buyers
• Offers a level playing field between small sellers and bigger, better branded sellers

Cons

• Listing and final value fees - you pay every time you put a product up for sale, and when it is sold
• There are more restrictions and limitations in terms of how you can write your copy and present your product
• Harder to get onto search engines
• Link exchanges are more difficult
• Increasing competition (it is not as easy to sell now on eBay with increased number of people selling on eBay)
• Does not allow you to have metrics that can help you improve your product presentation and increase sales, such as conversion, shopping cart abandonment, unique visitors and pageviews, among others.

About the PowerHomeBiz.com Guide:  

The opinions expressed in this column are those of the author, not of PowerHomeBiz.com. Users should not treat the Guide's response as legal, accounting, or professional advice as all answers are intended to be general in nature. Such advice can only be properly given by qualified professionals who are fully aware of a user's specific geographical areas or circumstances, such as an attorney or accountant.