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The Top Five Reasons eBay Sellers Fail

By: Skip McGrath

Building an eBay business is in many ways similar to building any business. To be successful everything has to work: Marketing, Sales, Quality, Pricing, and Customer Service. Selling on eBay, however, has some unique features that differ from traditional retail businesses.

On eBay, a seller's customer service reputation (Feedback and DSR Rating) is out in the open for everyone to see. Imagine, if every store in the shopping mall had a sign outside where customers wrote comments about their products and service. Would you stop to read the comments before entering the store? Negative feedback or poor DSR scores are the number one reason eBay sellers fail. A negative feedback rating, however, usually has its roots in other problems.

Here are the top five reasons why eBay businesses fail:

1. Poor Feedback & DSR Rating

New eBay sellers typically underrate the importance of quickly building a great feedback rating. I am amazed when I click on an auction description and see a seller with a feedback rating under "10." How could this person know anything about selling on eBay.? Experienced eBay bidders are cautious of sellers with a feedback rating under 25 - 50. Admittedly, getting your first twenty-five feedback comments as a seller can be a long process. Don't forget, feedback comments as a buyer count as well (although eBay does show the difference). Before you rush into selling on eBay, you need to get some experience buying. There is nothing better than putting yourself in your customer's shoes.

Once you have 12 feedback ratings as a seller, eBay will start rating you with their DSR – Detailed Seller Ratings that is their star system. This is just –if not m ore important as your feedback rating. And high DSR scores can earn you fee discounts up to 20%

I wouldn't start to sell on eBay until you have completed a dozen or more purchases, paid for them promptly and received good feedback from your sellers. Don't be afraid to ask the seller to post feedback in your payment email. Sellers like to be paid quickly. Sending payment by credit card or PayPal will build your feedback rating quickly as well.

When starting your eBay business, you should bend over backwards to provide exceptional service. Remember, you are fishing for compliments. When you have a positive feedback rating over "100," bidders will look at your rating number and then make their decision on whether or not they like your product. If your feedback rating is less than a 100, people tend to actually look back through your comments and read them. There is a big difference between "Nice transaction -- good seller" and "FIVE ***** SELLER, EXCELLENT PRODUCT- FAST SHIPPING" Whether you are a new seller, or a veteran eBayer, building excellent feedback comments should be a daily goal.

Poor communications between buyer and seller is the leading cause of negative feedback and low DSR scores. Make sure your first email to the successful bidder is clear, and complete. You should not only be polite, but also be effusive in your congratulations. Remember: Some people shop on eBay for bargains, but most people shop on eBay for fun. Make the transaction a fun experience. Be personal. Don't sound like a bureaucrat or a big corporation. Make the buyer feel good and close the sale by complimenting them on the great deal they made.

Make sure your payment instructions are clear and your shipping methods and charges are clearly spelled out (this should have been in your auction, but many people can't remember). As the seller, you have the most to lose by negative feedback. It is only a question of time until you run into a difficult or irrational buyer. He or she may be rude, or unresponsive, or both. Once your feedback rating is secure in the high hundreds, you can afford to take a tough line and weather the negative feedback that inevitably follows. But while you are building your feedback rating, sometimes you just have to swallow hard and be extra diplomatic. I always give people the benefit of the doubt and try and work something out. I would rather lose a sale than risk negative feedback from an irresponsible person. If a buyer won't complete the transaction, its better to report them to eBay, than to get into a feedback war. Once eBay determines they are a non-paying bidder, they will not be able to leave feedback against you.

To summarize, make your communications fast, friendly and complete and your DSR and feedback ratings will soar!

2. Ignoring Competition Can Kill You

Correct product selection is one of the keys to success for the small or new seller. Too many sellers want to sell the latest, hottest consumer product. This is a prescription for disaster. The hard truth is that unless you have thousands of dollars to invest in inventory you cannot buy these products in quantities and at prices that allow you to make money. All of the big sellers can cut their prices and make up the difference in volume. But if you try this you will get killed.

The secret for the little guy is to find a niche product with less competition. Typically the big guys leave these specialized niches alone. So you can charge higher prices and make better margins.

3. Weak Headlines and Poor Auction Descriptions Lose Bids

There are over seven million items listed on eBay every day. Your headline must stand out above the competition to attract bidders. A great headline should contain two key elements: "Key words" that are searchable, and "emotional words" designed to attract attention.

Over 60% of bidders find the item they are looking for by using the "Search" feature. Unless you use the key words bidders are looking for, you will miss many bids. For example, if someone collects Ferrari Formula 1 model cars, they will search "Ferrari" rather than "Formula 1" or "model cars." A search of Ferrari turns up 41 items, while "Formula 1" turns up a few thousand items. A search of "Blue & White" will turn up thousands of listing in the pottery section, but a search for "Liberty Blue" (a specific type of blue & white pottery) turns up only a few hundred items.

Your headline should also include "emotional" words designed to attract a bidder's attention. These words include: new, rare, unique, sexy, secret, unbelievable, super-value, etc. You should not call something "rare" if it is not. But, there are other adjectives that work well in headlines. Besides the emotional words you can use words such as exquisite, charming, wonderful, mint, perfect, clean, superb, etc. Just make sure you are accurate.

Once you catch the bidder's attention with a great headline, you need to "sell" them with your item description. Too many bidders simply describe the item they are selling. Yes, it is important to completely and accurately describe the item, but too many sellers leave it at that. Take the time to "romance" your item. Sell the benefits.

Before writing the auction description, ask yourself: "Why would someone want to own the item you are selling." If you are selling something you use, say so. Tell the potential bidder why you owned the item, how you used it, what benefits it brought you. Sell not just the features, but also the benefits and the romance.

Here is an example:

"This Sterling Silver bracelet is five inches long set with zirconium stones that look just like diamonds."

Now lets add some romance:

"This exquisite Italian Sterling Silver bracelet is set with five glimmering zirconium stones that sparkle like diamonds. The silver is finished to a high polish. It's so bright, it looks like white gold. Whenever I wear this bracelet my friends ask: "Wow, are those real diamonds? Where did you get that bracelet?"

Your auction descriptions must also be complete. A clear photo is critical to the success of the auction, but remember, photos don't always show all the details a bidder needs. If you are selling an antique, collectible or any used item, be sure to describe any and all flaws. The fastest way to build negative feedback is to over-describe the item, or over-promise performance.

4. Poor Images Can Turn Off Sellers

The saying "A picture is worth a thousand words" is never more true than with on-line auctions. Not having a photo of your item will greatly reduce your bids, and lead to unprofitable or unsuccessful auctions. Not only must you have a photograph of what you are selling, the photo must be accurate and revealing.

It is not necessary to be a professional photographer. eBay bidders understand that most sellers are taking snapshots of the products they sell. But, your photo should be clear, and show the product as completely as possible. Here are some tips for good photos:

  • If the size of an object is not obvious, use a reference such as a ruler or a coin.
  • Show any flaws or defects. Point them out in the caption if necessary.
  • Don't use a flash. It causes reflections. Take your photos in open shade or using indirect window light.
  • Do not use "stock" photos. Bidders want to see a picture of the actual item they are bidding on, not a scanned photo from a brochure.
  • Use a tripod to make sure your shot is sharp.
  • Keep your photos to less than 300 pixels. Larger photos take too long to load and impatient bidders will click away from your auction. The "e-mail" setting on most digital cameras works just fine for most auctions.
  • Except for flat items such as prints, photos, stamps, cards and so on, scanners often produce an inadequate image for most items. A better solution is a copy stand. Just Google that term and you will find plenty for sale at low cost.

5. Not understanding your costs is a prescription for disaster

It is very easy for a new seller to get caught up in the excitement of selling and not pay attention to the costs involved in selling. Before deciding whether to sell an item on eBay, and what to sell it for (i.e. reserve or Dutch auction price), you need to understand all the costs involved.

First of all there is the "listing fee." There is also a "selling fee" that will be set by what price the item actually sells for. There may be a fee to process a Billpoint, PayPal or credit card sale. If you use an auction management service such as Auctiva or Vendio then you have their fees. Don't forget shipping, and the cost of the shipping materials.

If you are selling items you purchased wholesale, were there shipping charges to get it to you? Did you pay sales tax on the item?

Many businesses fail because they are either under financed, or because they do not understand their costs. A program such as Quicken's "Quick Books" could be one of your best investments. Quick Books will allow you to track every expense, down to the penny, and allocate the costs to different categories so you will fully understand where every dollar is going and if it was well spent.

For More Tips on how to be a successful eBay seller, check out: The Complete eBay Marketing System

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