Musings ////

The hot eBay selling season has started. Our sales for the month of September were up 35% over the previous month and 9% higher than September of last year. Apparently a lot of investors are seeing this because eBay's stock price has finally started to bounce back from its post-split lows. So if you have inventory sitting around, get it listed. Now is the time to clear out any slow moving or low margin inventory and get your cash invested in fast-moving high-margin merchandise.

Just after Labor day I put on my first eBay Success Seminar at the Alexis Park Hotel in Las Vegas. We had over 40 participants at the all-day event. Based on the feedback comments from the participants, I can happily claim success. I have taught classes, been a featured speaker at other seminars and been interviewed for newspapers radio and on TV, but this was my first paid all-day seminar.

As with any thing you do for the first time, Murphy's law and inexperience caused some glitches. Although this hotel specializes in seminars, the room had a lot of problems and the internet was not set up on time, causing me to have to tap dance for the first half-hour. I also learned that no matter how well you know your material, you really have to practice, practice, practice before doing a long and complex power point presentation. It's very easy to get ahead of, or behind your slides and the animation, if you are not really on top of it. But all-in-all the mistakes and setbacks were minor and everyone really enjoyed themselves. The most negative comment I received was that the seminar was too short and I should have done two days instead of one. Everyone agreed the value they received was well worth the price.

I invested in a professional videotaping crew for my own benefit so I could review and improve my presentation and as a possible product to sell to those who cannot attend a seminar. Once the videotapes are edited I will be packaging them with some other materials onto DVDs and will offer them for sale to my readers.

I am now looking at a schedule for a 2006 seminar series. The plan is for a series of one-day seminars in various cities around the country and 3-day intensive boot camps --one on the West Coast and one in the East.

Mike Enos is launching his first seminar series on a cruise ship to the Caribbean in late January. Mike invited me to join the cruise and speak, but Karen and I have a timeshare in the Bahamas the same week. We tried to move it, but they are completely full the week before and after, so I reluctantly had to decline Mike's generous invitation.

If you like cruising and would like to read about Mike's seminar, just click here. Mike told me Jim Cochran, author of The Silent Sales Machine Hiding on eBay will be one of the featured speakers and he is lining up some other eBay gurus as well. It really sounds like a lot of fun and a good opportunity to learn from some of the masters of the business.

My good friends, Ina and David Steiner, at Auctionbytes.com have launched an online TV network that will provide news and informational programming about eBay and the online auction world. I will be working with them over the coming weeks to develop educational content so in the near future besides reading my words you can see my talking head. You can read about the new service here. AuctionBytes publishes two free newsletters, Update which comes twice a month and Newsflash that comes out two or three times a week. You can subscribe here.

My new web site www.ezauctiontools.com that I launched in August has been a big success. This is where we sell the EZ Cube line of photo light tents that allows anyone to take great product photos for your web site and your eBay auctions. I built this web site with City Max. It took me about two hours to put up the basic site and about another two hours to build the product catalog and load the built-in shopping cart with products.

Citymax provides the web site submission tools for free and a $50 credit when you sign up for google adwords. It took about four weeks for the site to get indexed to the larger search engines, but now I am seeing good traffic and the EZ Cube is selling really well.

Speaking of the EZ Cube, I have just listed a new product, The Complete eBay Trading Assistant Digital Photography Kit. If you own a drop off store, or are serious about becoming an eBay trading assistant or consignment seller, this kit gives you absolutely everything you need to get started.

For the past three months I have been doing a series of free tele-seminars sponsored by Sellers Voice. We have been averaging about 200 listeners on each call. The next seminar is on Thursday, October 6th, at 6-PM Pacific Time, 9-PM East Coast Time. You can enroll and get the phone number and code by clicking here. The subject of this seminar is: Promoting Your Auctions.

Well, let's get started with this month's issue

In This Issue ////

1. Using Audio In Your Auctions

I have always been a late adopter of new technology. eBay announced its association with Skype, Voice over Internet last week, but I didn't rush out to try it. I will, but I will wait a few months un till the dust settles and some of the inevitable bugs are worked out. It was the same way with audio in auctions. This technology has been around in various forms for over three years, but I only started using it about six months ago. The early systems were clugy, you had to download special software, and it was a real pain to insert the audio clips into your auctions.

But earlier this year I discovered Seller's Voice, a company that developed a really simple and clean method of putting audio in your auctions. And boy does it work... I continue to see more bids and higher final values in my auctions where I use audio. People have even left me feedback comments that mention the audio message as the reason that they purchased. I do get the occasional complaint --you can't please everyone, but overall the program has been a stunning success.

Competition on eBay is fierce and increasing fast. Everyday there are more auctions and more items for sale. The question is... how do you stand out from the pack? What will grab your visitor’s attention?

Getting visitors to bid on your items begins by first grabbing their attention. On the Internet nothing grabs attention faster than hearing someone's voice. When a visitor lands on your site and hears you talking, it’s hard for them to ignore you. Hearing your voice grabs their attention more quickly than trying to get them to read your site copy.

I started listing the same EZ Cubes on eBay that I was selling on my web site, but they just weren't selling. Out of four auctions listed the first week, I only made one sale. The following week I added audio to my auctions and my store listings. I sold three out of the four auctions listed and two EZ Cube sets sold from my eBay store. My first full month of using Seller's Voice, I sold 3 EZ Cube light tents and 11 complete sets for a total final value of over $2,600 versus one set the previous month for a final value of $214. If you would like to see how I use Sellers Voice in my auctions just click here to see the auction and listen to how I use audio.

When you listen to the audio, notice that I mention Sellers Voice at the end and invite the listener to click on my About Me page. Once you sign up for Seller's Voice you can then join their affiliate program. Seller's Voice costs $29.95 a month for the service, but they pay you $9.90 a month for each affiliate you sign up. I have now signed up over 14 affiliates from people who clicked on my About Me page. This is earning me about $138 a month. That is not a lot of money, but it more than pays for my Seller's voice account.

2. Making Money with Shipping and Insurance

If you buy frequently on eBay, you have probably been gouged by some unscrupulous seller charging far more for shipping that the real cost. You pay the eBay seller $7.50 for shipping and when you get the package the postage cost is only $2.50. None of us like that and that is not what I am suggesting here. There is a big difference between charging a reasonable handling fee and gouging someone.

Shipping is a cost center. Your costs are not limited to the actual shipping charges. there is also the cost of the box, and shipping materials such as styrofoam peanuts, bubble wrap, labels and so on. Then there is your time to package the item and get it to the shipping center.

Your first step is to do everything you can to reduce your costs including your time. Different shippers charge different rates based on the size and weight of your shipments. For example, USPS Priority Mail is faster and cheaper than UPS on items weighing less than 5 pounds. So step number one is to survey the various shippers (USPS, UPS, FedEx Ground, DSL) to see who offers the lowest cost for what you are shipping.

Next look at your materials. If you ship via Priority Mail, the post office will give you free boxes. This is an important cost saving area because boxes are expensive. If you ship with other carriers you will have to buy boxes. Some sellers save on boxes by dumpster-diving but I don't recommend this. I once received something I bought on eBay in a box from a Subway store that smelled like salami. Instead visit your local gift shop, Radio Shack or kitchen store. These types of stores receive merchandise every day in good quality boxes --many with packing material. In most cities local ordinances require stores to recycle these materials which is expensive. If you cut a deal with your local gift shop or kitchen store to take their boxes off of their hands, you will have a continuing source of good-quality used boxes and packing material that can be reused. No one minds a used box as long as it is in good condition and the packing materials are clean.

Your time is important. the best way to save time is to first automate your weighing, postage calculation and label printing. eBay now has an integrated system with USPS and if you do enough volume with UPS they will give you label printers or sell them to you at a good discount. For postage I prefer Endicia. the system works with both Macs and Windows PCs and they have a very nice deal on an integrated scale and label printer.

The other place to save time is your shipping station. Set up an organized area in your home or garage with a table that contains all of your shipping supplies laid out in an organized fashion so you don't waste time looking for boxes or bubblepak. Invest in a tape gun and any tools that will save you time.

Now let's look at charging. There are two ways to charge for shipping: Calculated and Fixed. I prefer fixed rates but many prefer to use a calculated rate. If you use a fixed rate I like to pre-calculate the shipping cost to cover most but not all of the country. Here is what I mean. For example UPS has 8 domestic shipping zones. I live on the west coast and zone 8 is on the east coast. So I choose zone 6. This way I make money on any shipments to zones 1 thru 5, break even on 6 and lose a little money on zones 7 and 8. I also add 10% of the shipping charge to the total to cover my handling costs. So far this has been a good strategy. I am making a little money on average on my shipping and no one has complained.

If you charge calculated rates, the eBay shipping calculator allows you to add a handling charge that the buyer doesn't see. UPS offers an option where the shipping cost does not appear on the label. If you use Endicia, they offer a feature called stealth postage that does not show the actual postage cost.

Insurance is another opportunity to make a little extra money on shipping. The post office charges $1.00 per hundred dollars of value for insurance. Shippers such as UPS give you the first $100 coverage for free and then charge a sliding scale for higher amounts. I use a company called Discount Shipping Insurance (DSI). Their rates are up to 60% less than the post office or shipping companies. You can charge the full amount for insurance and keep the difference that DSI charges.

Added together, you won't make a ton of money of shipping, handling and insurance, but this is a area where small amounts can add up quickly If you are closing hundreds of auctions a month.

3. Why Do So Many Sellers Still Not Have an About Me Page ?

I am always amazed when I open an auction and notice that the seller does not have an About Me Page (AMP). The About Me page is an excellent selling tool for many reasons.

Why should I have an About Me Page ?

Take a few minutes to browse eBay looking for About Me pages to get some ideas before creating your own.

4. Increase Sales and Profits With A Second Chance Offer

This is an article I wrote about 9 months ago. The reason I am repeating it is twofold. First it has really been working for me. In the past month alone I have sold 17 items with a second chance offer that I would not otherwise have sold. Secondly, I have received several emails from readers asking either how it works or if it is something they should do. So my apologies to my veteran readers for repeating something, but I think this subject deserves another look

Last year eBay introduced a new feature called the Second Chance Offer (SCO). Originally the SCO was designed to offer the second highest bidder the chance to buy at their losing bid price in the event the winning bidder did not pay and became what eBay calls a Non-Paying Bidder (NPB). The feature was very successful, and in late 2004 eBay modified and expanded the feature so that you could offer an under bidder on an auction a second chance bid in the event you had more than one identical item to sell.

Here is an example: You have an auction for a teddy bear and get the following bids:

OK. Betty wins the teddy bear at $43.50. Let’s assume you were happy with any bid above $39.00 and you have several identical teddy bears in stock. You can offer both David and Charlie a second chance offer to buy a bear at the price they bid. David would get a bear for $39.25 and Charlie would get a bear for $42.50. Here is the best part: You would pay eBay the final value fee on all three sales, but you only pay the listing fee on the bear that Betty, the highest bidder, won. Best of all, you have sold three items for a total value of $125.25 for the effort of placing only one auction.

The second chance offer is very simple to use. When an auction ends, you simply click on Second Chance Offer on your item sold page. A new page will come up with the auction number populated. Click “continue” and you will go to a page with the usernames of the under bidders. Put a check mark next to the ones you want to receive an offer and eBay sends them a link to a special page where they click on the “Accept” link if they want to buy. When they do this, a PayPal window opens up and they just have to click to buy if they want to pay via PayPal.

There are several advantages to the SCO. First is the fee savings. Next is that you do not have to tip your hand that you have more than one item –so the perception of scarcity is preserved in the auction format. Also is the fact that you get to make three sales from one auction listing. If your acceptable margin had allowed you to accept any bids over $36.00, then you could have even had a fourth sale to Albert who bid $36.50.

5. eBay Launches New Wholesale Portal with Global Sources

You may recall an announcement from eBay and Global Sources at eBay Live! in San Jose that eBay had partnered with Global sources to create a site where eBay sellers could import goods from China and the far east in small quantities. The site is called GlobalsourcesDirect and features items from leading Chinese manufacturers in smaller quantities than these companies usually sell at.

The site has not yet been promoted and is undergoing a soft launch, so my readers are some of the first people to see this. Right now there are only about 100 products offered on the site, but Global Sources expects this number to be in the thousands over the next few months.

Here are a few items from the current offerings (Note - these may not still be there when you read this, but these are provided as a sampling of the things you can buy:

I did a little checking on eBay and all of these items could sell at a nice profit. One seller is selling the LED flashlights for $1.74 each but charging $10 for shipping. (This is a practice I really think eBay should crack down on). The same thing with the iPod car charger: People are selling these for pennies, but charging anywhere from $10 to $14 shipping. This is not the way I would do it, but they are making a nice profit on these items.

Be careful with these prices, however. Be sure to look at the shipping cost from China. This is revealed when you add an item to the cart --but before you have to purchase. On some of these products, the shipping cost almost doubles the price. Nevertheless, there is still room to make money with these goods.

Global Sources' main competitor is Alibaba. I have heard rumors that Alibaba will soon come out with a competitive site. There are some companies selling in small quantities on Alibaba now, but you have to be very careful as there are a lot of scam artists using the site. If you buy on Alibaba, be sure to buy from those suppliers listed as a Gold Supplier as these are the legitimate companies as opposed to just anyone who can list a product on the site and attempt to sell it.

The thing I really like about this new Global Sources site is that you can pay via PayPal or credit card, thus giving you some fraud protection. Also, they have a return policy if you are not satisfied. You have to pay a 20% restocking fee, but most overseas companies do not offer any return policy at all.

eBay also has a site for power sellers only to buy in wholesale quantities. See the next article.

6. eBay Reseller Marketplace: A Wholesale Portal for Powersellers Only

eBay has recently created a new marketplace for business buyers to acquire inventory for resale. Basically it is a venue for liquidating returned, refurbished, or otherwise excess inventory in bulk lots to eBay Powersellers for resale on eBay and in other channels. It is called Reseller's Marketplace and is open to powersellers only.

The format is by bidding. But I have been watching the bidding and basically you can buy for the asking price. I have seen very few people outbid. If you are a Powerseller, you should log in and see what they have. The selection of items is not that large, but there are some great deals to be had. For example a lot of 50 Logitech wireless keyboard w/ optical scroll wheel mouse, sold for $800. That works out to $16 ea. for a product that retails for close to $90. As with the Global Sources site above, this operation is pretty new and there aren't a lot of items listed --but what is there looks pretty good. Over time this site should also become more popular and the listings should grow.

7. How Much Should I Charge For Consignment Selling Fees ?

I get a lot of email from trading assistants asking about fees. How much should I charge? Should I charge a listing fee? Should I charge the consignor if something doesn't sell? What are my competitors charging?

The answer to the first question is the most important: You must charge enough to make a profit. To understand your profit you should first understand your costs. (This is true for any eBay business –not just the consignment business). Remember to look at all of your costs, including advertising and marketing –how much are you spending to find goods to consign?

Look at all of your fees: PayPal, eBay, auction management fees, image hosting, and so on. Don't forget your overhead expenses: ISP, email accounts, telephone, computer payments, office supplies. The best way to get a handle on your costs is to use an accounting program such as QuickBooks. QuickBooks can be a little complex to set up, but once it is running it will save you tons of time and allow you to fully understand the cost of doing business.

Should I charge a listing fee? My recommendation is yes. Psychologically speaking, asking the consignor to pay a fee gives the consignor an investment in the successful outcome of the auction. Also it tends to eliminate people who just want to waste your time and it will help filter out goods that probably won't do all that well on eBay. It may also filter out the occasional seller who is just too skeptical, but in the long run your cash flow will be better and customers (consignors) will take you more seriously. An exception to this is when someone gives me something really valuable to sell or a large quantity of merchandise from a retailer or an estate sale. As I want these people coming back to me, I usually don't charge them an up front fee.

Most Trading Assistants charge a sliding scale based on the final value of the auction. The higher the final bid, the lower the fee. In my book, How To Start & Run an eBay Consignment Business I recommend a fee schedule that starts out with a $3.00 listing fee for the first item and $1.00 for each additional item consigned at the same time. This fee is non-refundable. Then, I charge a final value fee of 30% on the first $300, 25% on the amount from $301 - $500, 10% of the value from $501 to $10,000. Anything over $10,000 I negotiate the fee.

I also recommend you charge reserve fees and category or home page feature fees up front unless you are really sure the item you are selling is in demand and will sell for a good price. If so, you can add the fees to your commission, or not, depending on the situation.

There are now over 500 eBay consignment businesses operating out of retail storefronts in various cities around the country and more are being added every week. If you would like to know what others are charging, Ina Steiner of AuctionBytes has compiled a fee comparison of 40 large consignors. Click Here to view the comparison chart.

One more thing on the subject of consignment selling: A question I frequently get is "I live in a small town. Do you think an eBay consignment business will work here?" I live in a town of 11,000 people and there are four eBay consignment sellers operating here including myself. Three of us do very well. One of them is a lady who used to own a consignment store. She does so well, she closed the store and just operates out of her house. We see her at the post office several times a week with armloads of packages to ship.

8. New Wholesale Sources For October

One of my long-time readers, Paula, sells clothing and swimwear on eBay and her web site under the name NY Baglady. Paula has decided to retire and is selling her entire stock at below-wholesale clearance prices. You can look at Paula's auctions on eBay here. If you would be interested in purchasing her merchandise, use the contact link on her web site at www.nybaglady.com.

Wholesale Marketer is another large drop shipping company you have heard me write about often. Wholesale Marketer is probably the largest drop ship company that supplies eBay sellers. The problem was that you just couldn't find any products on their site that you could make money with. Every time I found something I wanted to sell, it was already selling on eBay for the same --or even less.

The problem isn't that you cannot find items to make a profit on --you can --it just takes a lot of work to find them. Well now they have a tool to help you out. It's a data export tool that will allow you to download all the data into a spreadsheet. This way you can simply click on a product title and paste it into the eBay search box or the Andale search engine tool. This can dramatically shorten the time to find saleable items.

Atlantic Importers have a very nice line of collectible antique toy reproductions.

The Junior Sense Company has a really unique line of fashion jewelry for teens. When you get to the page you will need to hit the New Member link, fill out a form and wait overnight to get a password to get wholesale pricing.

Altocraft is a retail and wholesale tool company that has been in business since 1995 and is a good source of tools to sell on ebay.

After Katrina and Rita, there has been a lot of interest in emergency generators. Universal Merchandise Group sells the QuickStart Line of generators in 1300, 3500, 5000, and 7500 watt sizes as well as a large selection of other power tools, pressure washers and electric scooters.

The Fire Flyer is a true night-time flying disk (I.E. Frisbee type toy). I saw one of these in action and it is really cool so I researched the company. The Fire Flyer Web Site describes the product and has a link to the wholesale information. The really neat thing about this product is the potential for residual income. The flyer uses disposable light strips that last for 12 hours. So people not only buy a disk, they come back to buy more light strips.

Looking for Spiderman stuff. New Era Distribution is a major distributor of Japanese Toys & Anime related items. Excellent wholesale pricing on wall scrolls, CD Soundtracks, Plush, Figures and more.

Here's another unique product. The Electric Scorpion Skateboard is a three-wheel powered skateboard. The web site has all the product specifications and a link to "become a distributor." This is the type of product you should be incorporated to sell so you have some product liability protection. See last month's newsletter article on incorporating if you don't know what I am talking about.

Product Resource Solutions is a distributor of home and personal care items including the hot-selling Little Giant ladder.

ESCO Imports is a direct importer of toys and other children's items. Because they import directly from the manufacturer the pricing is about as good as you can get without importing yourself.

That's it for this month

Good luck on eBay

Skip McGrath