eBay Seller's News, January 2006, Vol. 7, Issue #1

"If you can imagine it, You can achieve it.
If you can dream it, You can become it."... Harold Taylor

Musings ////

Well the Christmas selling season is finally over but the hot eBay selling season is still in full force. eBay is a seasonal business. The best months for ebay are August 20th (the start of back-to-school selling) to June 15th (when schools let out and people go on vacation).

Click Here to watch a free video and learn how Michael Chaney makes $19,000 a month with Google AdSense

Of those months November through March are the hottest months. That doesn't mean you can't make money in the other months --you can and I and many other sellers do, but it is during this time when you can make the most money with the least effort.

How do you benefit from this hot season? The simple answer is to launch more auctions. The more merchandise you have for sale the more you will sell. Of course you still have to do all the right things:

One of the things I like to do at this time of year is step back and evaluate my business. It is very easy to get into a rut if you don't take the time to evaluate what you are doing. The first item is an article I ran a couple of years ago on this subject, but I have updated it and expanded on it.

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eBay announced new figures for the number of eBay users worldwide. Are you ready for this? There are 72 million registered users in the United States and 75 million on the various overseas eBay sites. That's a total of 147 million people --roughly one/half the population of the Untied States.

Here is an eBay trivia question for you: What was the first item Pierre Omiydar (the founder of eBay) sold on eBay?

a) a broken laser pointer
b) His girlfriend's PEZ collection
c) An early Superman Comic book
d) A VCR of a Gene Autry movie

You can read the answer at the bottom of the page.

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In a surprise move eBay has suddenly decided to embrace selling digital products on their site. (See item #2 below). For years eBay has tried to make it difficult to sell information products and in some respects they still are. In a bid to expand their business, eBay has announced new rules and procedures to allow sellers to sell digital delivered products.

This move by eBay is going to open up tons of new profit opportunities for eBay sellers if you know how to create and sell information and digital products.

Jim Cochran, author of the Silent Sales Machine Hiding on eBay is probably the leading expert when it comes to selling digital products on eBay. He has recently come out with a new product, Secret Auction Interviews. In this series of CDs and books, Jim interviews the top information selling gurus around today.

I have been selling information products both on and off eBay for years and thought I knew all the tricks, but I was blown away when I listened to these CDs and read the accompanying books. If you have any interest in selling digitally delivered products, you need to get these books and CDs. Like everything Jim does, this is a great quality product and comes with a no-nonsense money-back guarantee.

Another master of creating and selling information on eBay and the web is Tim Knox. Tim and I will conduct a live conference call on the subject of selling on eBay and creating multiple streams of income on Thursday, January 19th at 6PM Pacific Time, 9PM Eastern Time.If you would like to listen in, CLICK HERE to get the number and password for the call.

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Speaking of Research, my good friend Ina Steiner, editor and publisher of Auctionbytes Update --the weekly newsletter of the online auction industry, has just written her first book, Turn eBay Data into Dollars published this month by McGraw-Hill. This excellent work shows you how to use the powerful tools available on eBay to sell smarter and make more money on every sale. Learn to mine sales data from tools such as Andale Research Tools, Terapeak, and DeepAnalysis. Generate sales and traffic reports using eBay and Sellathon ViewTracker so you can easily analyze your data and make informed business decisions.

You’l learn to apply the results of your research to your eBay listing and marketing strategies. Then, you can better determine what to sell, how much to charge, how to improve traffic, and how to stay ahead of the competition.

Start making more money on your eBay auctions. Click on the banner to order Ina's great new book, Turn eBay Data into Dollars.

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Mpire has announced a new free research tool. Mpire™ Researcher– a free new tool that instantly arms eBay sellers with the information they need to make the most profitable listing decisions. Users simply type in the item they wish to sell, and Researcher shows listing recommendations – such as best starting price, auction length and key words – based solely on the latest eBay transactions for that same item that sold for the best prices.

Win a free trip to eBay Live 2006: eBayers can now visit Mpire to sign up for Researcher and entere to win a trip for two to eBay Live! 2006, being held June 13-15, 2006 at the Mandalay Bay and Hotel Convention Center in Las Vegas. Once you learn the techniques in Ina's new book, try them out at Mpire's new research tool for free. When you click on this link you will have to fill in your email address to access the free tool. Don't worry --Mpire won't spam you --the email address is your username to access the site.

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

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In This Issue

1. Giving Your eBay Business a Tuneup
2. eBay Finally Embraces Selling Information Products
3. More Help on Finding Your Niche on eBay and The Web
4. Maximizing Profits from Your eBay Consignment Business
5. Stop Sitting on Non-performing Inventory
6. Buy It Now Strategies
7. New Wholesale Sources for January 2005

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1. Giving Your eBay Business a Tuneup

How is your eBay business doing? Are you making the sort of money you thought you would by now? Are you still selling part-time, but want to go full time?

eBay is now over ten years old. Karen and I have been selling on eBay since 1999 --now going into our seventh year on eBay. Over the years I have seen lots of changes. For example, eBay's new policy about selling digital goods in the next article below.

This got me to thinking about my eBay business. I noticed that in many areas I had fallen into a rut and hadn’t kept up with all the changes and have not been taking advantage of all the features, promotions and selling opportunity that eBay offers. I also started taking a look at the products I was selling, how I was launching my auctions, and how I was managing the after sale process. This look led to spirited discussions between Karen and I about how we should take our business forward. I won’t bore you with our issues –as they would be different than yours anyway. But, we will be updating and revamping our books as well as looking for new categories of products and new selling strategies as we go forward.

Each of you should do the same. While you are at it, remember the most important thing is to set some reasonable goals –and WRITE THEM DOWN.

What kind of goals you ask? For example: Set a date and draw up a plan to reach power seller level ($1,000 month in sales over a 3 month average). This should be a minimum goal unless eBay is just a hobby. If you are going to have a real eBay business, then reaching Silver Level ($2,000/mo) and Gold Level ($10,000/mo.) should be factored into your plans.

After setting the goals you want to reach, you need to come up with a plan to get there. What products are you going to sell? What kind of margins can you expect? This will lead you to calculating how many auctions you have to launch to reach your goals. Now, what resources will you need to get there? Remember, “time is money.” Look at investing in resources that will save you time. DSL, a faster computer, better printer, your own UPS account, auction management system and a system such as Endicia to automate your postage printing and so on. Also look to expanding beyond eBay auctions. Do you have an eBay store? Do you have a web site? Are you capturing your customer's names and marketing to them?

The point of this article is that everything changes –on the internet (and eBay) these changes can occur rapidly. Get in the habit of reviewing your goals and plans quarterly and taking a large overhaul type look each year. You will be amazed how easy it is to improve if you take the time to do this.

2. eBay Finally Embraces Selling Information Products

After years of making life difficult for information sellers and people who want to sell digitally delivered products, eBay has finally realized these sellers pay eBay fees too and performed a 180 degree turnaround. Their attitude is something like the government's: "if you can't stop something then regulate it and tax it."

So what does eBay mean by Digital goods? Digital goods obviously include products such as eBooks and links to web sites with paid content, but it also includes many other things. You can now sell recipes, songs that you recorded, a video you made or even sell a digital copy of a photograph that you took. Notice I use the word you in that description. eBay's policy about selling digital goods by others is very strict in that you need written resale rights from the copyright owner. So forget about recording ZZ Top the next time you go to a concert and trying to sell the MP3 on eBay.

So the first thing you need to do is understand eBay's policy:

Digitally delivered items are restricted on eBay. In order to list digitally delivered items, the seller must comply with the following requirements:

If you violate any of these rules eBay will cancel your auctions. If you do it repeatedly they will suspend your account.

Notice that you can only sell digital items using PayPal and you must use the immediate payment option. This does not mean you have to automatically deliver the item, although you can. The policy is pretty straightforward, but the actual instructions are somewhat complex and warrant through study before proceeding to sell an item. I strongly urge you to Read the FAQs on Digital Products before you try listing your first item.

If you try and list an item and the digital info box does not come up, don't despair. I called eBay powerseller support on January 9th and they told me the tools aren't live yet. They hope they will be up within the next few days.

You can learn more about selling information products by joining Tim Knox and myself by listening to our Free Teleseminar on eBay, dropshipping and creating multiple streams of income selling information products on eBay. Click Here to register.

3. More Help on Finding Your Niche on eBay and The Web

All of my regular readers know I am a fanatic when it comes to the subject of niche marketing. There is so much competition on eBay and the web today that it is fast becoming very difficult for the little guy to sell mainstream products. If you are trying to sell popular consumer products you are up against huge titanium powersellers and large companies with massive buying power and unlimited resources. But if you can find that narrow niche and own it, you can reap massive profits.

A niche isn't just a product --sometimes it the way you sell something or how you bundle it. A few months ago I wrote an article on Finding Your Profitable Niche which you can find HERE.

Shortly after that I discovered a site by a fellow named James Jackson who has managed to put together an extremely valuable resource that will show you 75-100 profitable niche markets every single month. This is an awesome site that gives you a monthly report of hot niche keywords that you can use on eBay and the web. Membership is very reasonable and also includes tons of free tools, keyword research and techniques for finding undiscovered niches and exploiting them. You'll also get deeply expanded keyword lists on each niche topic with search counts included. The site is called Find Hot Niches.

The obvious way to make money from a niche is to sell a product --but there are other ways to profit as well. You can sell an information product or just put up content and place banners and Google Adsense ads on your site. Even better --you can do both.

If you look above in the navigation tabs you will see a link to Website Marketing. The second tab under that is Website Marketing Resources. If you go there you will find plenty of free and low cost resources that will help you build and market a web site to take advantage of any hot niches you develop.

4. Maximizing Profits from Your eBay Consignment Business

I read recently that eBay now lists over 80,000 registered trading assistants. Unfortunately most of them just sign up for the directory and never try and promote their business. If you are serious about making money selling on consignment for others, first of all I suggest you check out my best selling book, How To Start & Run an eBay Consignment Business.

I get a lot of questions from readers and this seems to be the best place to answer them, so here are some issues that have come up over the last several months that you may want to consider if you are trying to build a trading assistant business.

Local advertising works. But, several readers have contacted me about trying to place classified ads in local newspapers and having them rejected because the paper feels they are competing with their classified ads. This is mainly a problem with small local papers, I have not heard of this happening with any large metro newspapers.

If this happens here are a few ideas for dealing with the issue. First of all, don’t get angry and upset. This won’t get you anywhere. Call the paper and ask to speak with the manager of the classified department. Explain to him or her that the type of people who bring you things to sell, will probably never advertise because they don’t want to be involved in meeting people, answering calls and having people come to their home. That is why these folks call you. Secondly, point out that their newspaper runs advertising for ordinary offline auctions and probably regular consignment shops advertise as well. Lastly, tell the manager that you will be a regular repeat advertiser –whereas these other folks if they did advertise will do so very infrequently.

Taking in low value goods and goods that just won't sell is a waste of time and money. Learn when (and how) to say NO! It is sad, but there are a small percentage of people out there who are just unreasonable and/or have unreasonable expectations.

When people come to you with unreasonable demands, your best defense is to have a written business policy. This should state that you use your best judgment to decide what will and will not sell on eBay. You should have a minimum value you set on an item (usually $50). Your policy should clearly and firmly state your fees and the fact that you MUST TAKE POSSESSION OF THE MERCHANDISE that you will sell. You can move a little on your fees if the seller has items that you know will sell for a high value or is giving you a large quantity of merchandise to sell –but I would not budge on the other policies.

I get the most email from readers who claim they have a hard time convincing consignors to trust them to leave the product. Here are some ideas for dealing with this issue:

If they still don’t want to leave the item, tell them you are sorry, but your policy is very firm on this issue and as much as you would like to sell their items, you will have to take a pass, but wish them luck selling it themselves.

5. Stop Sitting on Non-performing Inventory

Remember all those great sales the stores had right after Christmas? I bought a beautiful Ralph Lauren sweater at Macy's for $39 that was selling for $89 just before Christmas. Why do stores do this? It looks like they are giving away merchandise.

Any retail store owner will tell you the secret to making a consistent profit is to maximize the number of times you turn your inventory over. What is meant by inventory turn? Simply put –inventory turn is the number of times you sell everything you buy, use the money to buy more inventory and sell it again.

Inventory turn is the reason retailers have sales. If you pay $25 cost for an item of merchandise and plan on selling it for $50, then you will make a 100% margin (before other fees). If you sell this item and replace it once a week then you will make $50 a week. But what if it doesn’t sell at $50 and it sits there for four weeks before it sells, then you only make $50 month.

Now, what if you sold the item for $40, but it sells quickly at this price. You are making less money on each transaction, but more money each week or month. Also, if the item is selling well at the lower price, you can use your profits to buy more of this item and perhaps sell two, three or more units a week. This is a highly-simplified example, but you should get the point. It is best to sell goods for a lower margin if they sell more quickly, than holding out for a higher price.

It doesn’t matter what you paid for something, if it is sitting in your inventory too long, it is not making you any money. This is called “non-performing inventory.” We all make mistakes and buy merchandise that either won’t sell at a profit or even won’t sell at all. When this happens, its best to dump the goods at any price you can get for them, and put the money into other goods that are selling or will sell. There are hundreds of eBay sellers who make margins as small as 15%-20%, but make tons of money because their volume is so high –and they are constantly turning their inventory over.

If you paid $1,000 for a pallet load of closeout merchandise and find that once you sell it, you can only get $800, stop moaning about you bad fortune or imperfect judgment and sell it for the $800. Now get that $800 working for you and pretty soon it will turn into $1600.

6. Buy It Now Strategies

I get a lot of questions from readers about using the Buy-It-Now (BIN) feature on eBay. The leading questions is:"Does Buy-it-now work?" Personally I think the BIN listing was a stroke of genius on eBay's part. The real allure of eBay is the auction format. Auctions entice people into the buying process when items are still bidding low and lets face it --they are exciting and addictive. But there are also plenty of people who are impatient --call them impulse buyers.

In addition to consignment selling and selling my eBay books, I sell three main items on eBay: Fire Pits, the EZ Cube line of photo light tents and Starbucks Collectibles. (You can click here if you would like to see my auctions.). While I was closing the books on last year I also pulled a sales report for the month of December. Here are the percentages of BIN sales by product category during December:

As you can see, except for the Starbucks collectibles, I sell a very high percentage of my listing at a BIN price which is significantly higher (and therefore more profitable) than my auction final value. I am not going to give you my exact pricing and margin, but when I sell a fire pit at the BIN price I make on average 14% more than I do with an auction. I can't do that well on the light tents because they are more competitive, but I still make about 6% more than I do when they sell with the auction format. On the Starbucks items, I offer free shipping with BIN. Even with that cost I still make almost 11% more profit on every BIN sale.

I use BIN in three main ways:

If you want to try these strategies in your auctions there are a few things you need to remember. eBay charges a fee for BIN. The fees are based on the BIN value. They start at 5-cents and go up to 25-cents. The BIN price disappears once a bid is placed on an auction. If you are using a reserve, the BIN price will stay visible until the reserve price is reached.

7. New Wholesale Sources for January 2005

If you are interested in importing, Alibaba just gets better and better. Just be careful --like eBay and other sites, anyone can list items for sale. Unfortunately there are some scammers out there.

There are two things you can do when working with suppliers listed on Alibaba:

If you would like to learn more about importing there is a great page with Free Articles about Importing on the Alibaba web site.

Lately I have been getting very good results from two wholesale search engines. My own branded wholesale search engine here on the site is powered by GoWholesale and they have made a lot of improvements.

An old friend I used to use a lot and have been trying lately with great success is Wholesale Gopher. It's a fast search engine, and has some great companies looking for eBay sellers that promote right on the front page with banners. Wholesale Gopher comes up with some great results even for obscure items.

Diamond Tech sells a large line of craft supplies including mosaics, stained glass and bead making supplies. Minimum order $250. click on the link to Dealer Info to register and get pricing.

Wholesale Catalog sells an online wholesale catalog for just $3.95. The web site also has dozens of suppliers and products for sale without having to join. Just click on the list of products in the navigation column on the left side of the page. I saw an electronic Sudoko game for under $10.00

The Hold'em Poker fad just won't quit. Trademark Poker sells a complete line of poker and casino supplies.

Buy 4 Less Electronics... is a wholesaler of name-brand New & Refurb. Electronics, Photo, & Computer Products. Digital Cameras, MP3, Portable Audio, DVD Players, Home Audio/Video, PDA, much more. low minimums, worldwide shipping.

Resellers Wholesale offers a great selection of quality general merchandise with a 100% satisfaction guarantee. $150 minimum purchase required. No membership fees.

Something Special is a very unique hat company. You have got to see these hats. Talk about creating a niche --here is a ready-made niche waiting to happen. Click on the link to Get a Catalog to get the wholesale pricing.

Italian Charms continue to be hot. Fachino Veneziano is a manufacture who will work with sellers in reasonable quantities. The prices on the site are retail, so you will have to email them for wholesale pricing. I haven't worked with them but, my sources tell me they will give you great pricing on orders of $300 to $500 and much better pricing if you order $1,000 at a time.

Well that's it for this month. Karen and I are taking off for the Bahamas in early February, so our February newsletter will be a little late. Look for it about the 12th to the 15th of the month. I promise to get back on schedule in March.

Skip McGrath

Click here to read an updated version of the January Newsletter.