Keep reading for all the details but here's a fun fact - we also talked this one out over on our YouTube channel ...
If you buy guitars and guitar parts you likely both bought and sold stuff on eBay and Reverb. eBay was the major marketplace for guitar parts for years. Reverb, the relatively new kid on the block, is primarily for selling guitars and basses, however, in the last few years, it's expanded with guitar parts vendors. Another online sale option is the direct business website, which in our case is hosted by Shopify. All of these methods/marketplaces have pros and cons, and the differences are wide enough that currently, it's in our best interest to operate on all three.
Here's a look at the costs to do business on these platforms, along with the headaches and benefits each of them offers. Note that we're not talking about Amazon here. We don't sell on Amazon and really don't intend to due to prohibitive costs. Our niche is affordable, high-quality guitar parts, and it's tough to be competitive on Amazon.
The oldest and more well-known of the three that we are talking about here, eBay is a huge marketplace for guitar parts, and definitely offers the most traffic. eBay's fee per transaction on musical instruments is 3.5%. Payment fees primarily right now are handled by PayPal, which is 2.9% + $.30 per transaction. It should be noted that eBay is currently rolling out eBay Managed Payments, which expands payment methods and comes in at 2.7% + $.25 per transaction. Listing fees vary by product, and in our case, we have a $27.95/mo online store subscription, which means we can list up to 250 listings a month without charge.
What's good about this? Well, the marketplace is huge. You see a ton of traffic, and it's possible to sell a lot of products on eBay. The feedback feature is useful as well, our store has over 25,000 reviews which makes a difference to a lot of buyers. They also have a semi-decent seller protection program that can help with disputes. Their shipping services are fast, work excellent and provide great shipping rates. They also have great tools available that help you to list a ton of products quickly.
What's bad about eBay? The marketplace is skewed way in favor of the buyer. Buyers can commonly return anything they like for any reason...which is fine, except for shipping. You do have occasional cases of folks that have buyers remorse and will try to find ways to say your listing is inaccurate, and make you pay for the return shipping. There are plenty of scammers that get away with a lot on eBay. There can also be difficulty with eBay's elaborate seller rating system, where your standing can be damaged when things happen out of your control, like USPS taking too long to deliver a package. Lastly, of all the platforms we sell on, we pay the most fees to eBay. This can be tough to deal with, because the eBay marketplace prices tend to be a race to the bottom, with all vendors trying to outdo each other.
Reverb is an excellent platform. We find that the buyers tend to be younger than those on eBay, and it's a great place to sell guitars and basses. The fee per sale transaction is the same as eBay, at 3.5%. Reverb has its own managed payment system, and we pay 2.5% + $.25 per transaction. That's it on the fees. No subscription fees or listing fees.
What's good about Reverb? It's an excellent platform, with great seller support services and responsive staff. The fees are more manageable, with decent shipping features and expectations. The traffic we receive on our products is good, but not at the same level as eBay. This is likely because Reverb is not really looked at as a source for parts as much. That seems to be gradually changing.
What's bad about Reverb? A lot of the same reasons as eBay, however, Reverb has helped us out a ton with dispute issues. They have stepped in and provided a refund in "Reverb Bucks" to some of our buyers who have had packages stolen or lost in the mail. Reverb is set up more for used guitars, things like that. Our store has over 300 different products, and listing all of them on Reverb is a painstaking, long, manual process. The questions we get about our products on eBay seem to be more technical in nature, where the questions we get on Reverb are like "help, I don't know how to wire this switch I bought from you." While the shipping features are good, the discounted shipping rates they provide kinda suck. We use a separate site called Pirate Ship to ship Reverb orders. They offer great shipping discounts, and if you ship for your business, you should really check them out.
Shopify is what powers our website. It's not a marketplace, however, there is intriguing news out there that they may be putting together a marketplace to rival Amazon. Since it's not a marketplace, there's way less in the way of fees. We pay $29.00/mo for a basic shop subscription, and 2.9% + $.30 per transaction. No fees per sale or listing fees.
What's good about Shopify? We get to keep more of our money if we sell on our website. We make the prices on our website lower than anywhere else, and still, come away making more money per product. That means we always list our products for more money on eBay and Reverb. That's just the way it is. If you want to buy from us on those platforms, you'll be paying a premium. We can set our own policies on our website, and totally manage 100% of the business that we do on it. It also has a fantastic invoice system, where we can send deals and discounts to specific customers for special orders. The shipping rates that we receive on Shopify are the absolute lowest anywhere, which they negotiate with USPS to get. Shopify's back end interface is very modern and easy to use, and you can use apps and even manipulate the code itself for customization. You definitely can't do that with Reverb and eBay. eBay's interface is dated and can be glitchy as hell.
We can't say many bad things about Shopify. We could use a few more features, a little more functionality here and there in terms of analytics, but that's about it. You can get more functionality with the top tier plan, but the monthly charge jumps from $29 to like $80, so no thanks to that for now. While not necessarily a bad thing, we have to drive our own traffic to the website with tools like Facebook ads, which seems to work pretty well.
We're very thankful to all these avenues and platforms, despite any headaches, for helping to allow us a way to have our own business. The future for us is definitely moving towards a majority of our sales coming from our website, and we're already making great strides in that direction.