I was speaking with a friend recently about eBay and why people shop there. The number one reason we settled on was “cost savings.” So, people go to eBay to save money. That makes sense, I know I frequently do.
How is it that we can expect cost savings on eBay? Among other things, sellers on eBay frequently have a lower overhead than brick and mortar retailers. We don’t have to pay for commercial space, as much staffing, infrastructure, etc. so we can offer products for less than the cost of a normal retailer, and pass the savings along to the consumer.
However, I think frequently the consumer expects the same level of service from an eBay retailer as with a store like Macy’s. But, that isn’t always possible. With lower margins, smaller sellers aren’t always able to provide the same level of service as Macy’s. Service has a cost and the more service one offers, the more it impacts margins. Some larger sellers are able to offset that cost to a degree by buying in even larger volumes, driving their original cost down to accommodate the cost of raising service standards and infrastructure.
I think that buyers on eBay accept a level of implied risk. When shopping on eBay I think buyers focus a great deal on how much they are saving, without necessarily considering the cost of those savings. There’s an implied level of risk in shopping on eBay, and while feedback may mitigate some of that risk, feedback itself is a flawed system. But that’s a whole different story…