Selling on eBay - Free Services From Google May Dominate Small Business
Online Sales Market
May 15th 2006
Google is beginning to cut into eBay profits by offering free services.
Any business owner will tell you that it takes money to make money, but
because of eBay’s high cost per sale, sellers are trying new options
including Google’s Froogle Service and Google Base. By the time you add
up the costs associated with listing fees, final valuation fees, gallery
fees and other promotional fees, sellers can end up losing money selling
on eBay. If your item does not sell the first time or second time out,
you are still out their listing fees.
Mary Crane writes in Forbes Magazine that while the new Google Base
service has not become a significant driver of sales for e-commerce
companies as of yet, 50% of the conference attendees said they have
started to list products on the database. These eBay users include
people that make 75% of their income from eBay and are considered power
eBay is still the premier site for sellers because of the volume of
buyers. When compared to Overstock, Yahoo and Amazon, eBay is the place
to be. But how can Google compete?
Google makes their money primarily from search advertising. The company
can afford to offer free space as long as they can place their ads
there. Froogle is a free service, but many of the search results will
be dominated by paid advertisers. So if you are looking for a sandblast
cabinet, the top search results will be taken by paid advertisers. But
you can still advertise for free, but you will just be down the list of
Googles new online database called Google Base, offers sellers the
opportunity to store information for free. This information can be
queried like eBay, where potential buyers can find your items for sale.
Google needs to add more features including an automated checkout or
capability for third pary checkouts, and possibly a payment system to
their Google Base. They also need to get online market-helpers like
Andale, Marketworks, Channel Advisor and Zoovy onboard as partners.
Some of these “helpers” have created channels for Yahoo, Amazon and
Froogle. Hopefully, sellers will need to do some minor adjustments and
checkbox a list for the Google Base option, just like they do for Yahoo
and Amazon right now.
I believe Google can keep the service free by placing their text ads
among search results. Sellers could benefit by keeping their costs
down. Google should add some sort of feedback system as well.
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