The eBay Seller's News, April 2006, Volume 6, No. 4

Small opportunities are often the beginning of
great enterprises....Demosthenes

I need your help. Several of you email me to complain that you are not getting the newsletter. The problem is a combination of soft bounces and junk mail filters that key on the word "eBay." The solution to this is to confirm your email address so I can continue to send the newsletter announcements. At the bottom of the email you received is a link that says Confirm Your Subscription. Please take a moment to click on that link and confirm your name and email address --it only takes a few seconds.

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This has nothing to do with eBay, but I came across a great free offer this month when shopping for a new satellite TV service. If you are thinking of going to Satellite TV, I have used both services and I am much happier with Dish Network. Anyway I found this really cool coupon offer. If you call this number 1-800-784-7694 and use this coupon code: A-33218001, they will give you a Dish Antenna, up to 4 receivers and remotes, and free installation when you sign up for even the most basic program. That is a huge savings off of any deal I have seen. (Hmmmm --I wonder? If you don't need all four receivers, could you sell the extra ones on eBay?)

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By now all of you know I am a big believer in research. With Hammertap's latest release of Deep Analysis, I think they now have the most powerful eBay research tool --I think it blows away Terapeak and Andale.

They are offering a one-month trial subscription for just a buck. Give it a try. You can use DeepAnalysis to reveal market trends and develop eBay strategies that will help you make money on eBay.

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Last month I was involved in a great new product from James Jones who runs WhatReallySells.com. James created a new product called Where To Find Truly Profitable Products To Sell on eBay. He interviewed several of the top eBay Gurus (including yours truly) and produced a manual and a set of videos based on the interviews. I learned a lot just by being on the panel and the final product is really cool. If you are struggling to figure out what to sell on eBay give it a try. James is a really smart guy and I think you will be very happy with this set.

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I wanted to give one more update on Dave’s Cool Little Web Site. My site has been up for just over 2 months now and the search engines are starting to find it. Last month I got a check from Commission Junction for eBay signups and fees for $93. I checked my account just before sending out this newsletter and have already earned $21.43 for the first few days of April. My Google Adsense check for March was also right about $90.

Those don’t sound like big numbers, but they do add up and they are growing. As I said when I told you about this site –it won’t make you rich, but it’s a nice little source of extra income that can pay for itself within a month or two. If you want to get one, be sure and read my Dave’s Site FAQ’s first.

Here is a great free trick for helping search engines find your web site. Go into the blogosphere and find blogs about web site marketing or about the niche of your site that allow comment posts and create a comment about your web site. It shouldn't be a blatant advertisement --create an informational post or a question that allows you to work the URL of your web site into the blog. After you do a few of these you will have more links to your web site. this will

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Next month is a big month for trade shows and two of the really interesting ones are in Las Vegas from May 9-11. the National Hardware Show and The Gourmet Housewares show. Both of these shows are great places to find unusual products to sell on eBay or your web site. The word hardware covers a lot of ground --lots more than just tools, screws and paint. Almost anything that can be sold by a hardware store is exhibited by manufacturers and distributors looking for people to buy their goods for resale. Likewise, the term gourmet house wares covers a lot of ground. One year when I went I discovered all sorts of tools, utensils, gadgets and so on that I had never seen anywhere else. Go to www.nationalhardwareshow for info and pre-registration. Go to www.thegourmetshow.com for the gourmet show. See the article below on working trade shows for merchandise.

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In This Issue:

1. Look Out --Report This Auction Has Arrived
2. Should You Use Fixed Shipping or Calculated Shipping?
3. Become an Instant Expert at Squidoo
4. Red Flags That Can Get You Audited at Tax Time
5. Find Great Products for eBay at Trade Shows
6. Is It Getting Harder To Make Money on eBay?
7. Are Your eBay Emails Driving You Crazy and Wasting Your Time?
8. New Wholesale Sources for April 2006

So let's get started with this month's issue:

1. Look Out --Report This Auction Has Arrived

I have always been a big supporter of eBay's Trust & Safety group, but this is one policy I really hate. I warned you about this last month, but it is finally here. Earlier this year eBay announced its plans to make it easier for members to report possible listing violations.

Starting the first week of April, every eBay listing will have a Report this Item link at the bottom of the listing page. Using this link will bypass eBay's normal Contact Us procedure, which is notoriously hard to navigate, and take you directly to a list of reasons why a listing needs to be brought to eBay's attention. This will make it far easier for all of the busybodies with too much time on their hands to cancel auctions. When this policy was being announced I complained in writing to eBay, but never got an answer.

The problem comes from hundreds of insomniac listing vigilantes who stay up all night trolling eBay looking for any auction that violates even the tiniest rule. They get together on message boards and in chat rooms and brag about how many auctions they cancelled. With this new procedure it will be even easier. What eBay doesn't realize it that they will soon be overwhelmed by reports. Understaffed workers will not have adequate time to examine every auction to see if the complaint is real and they will just start pulling the trigger --canceling every auction reported.

Don't get me wrong, there are plenty of auctions on eBay that should be cancelled, but this is going to hurt thousands of legitimate sellers who occasionally make a mistake or commit a technical violation. If you have ever had an auction cancelled for some stupid reason you know what I mean. If any of you are visiting eBay Live! and feel as I do about this procedure, please visit the Trust and Safety Booth and give them your opinion.

2. Should You Use Fixed Shipping or Calculated Shipping?

I have always been a fan of fixed shipping. When you perform a search on eBay, those auctions with fixed shipping show up with the shipping cost next to the item. I have run my auctions both ways. The auctions with the fixed shipping cost always get more hits --sometimes as much as 20% more.

A lot of my sales come from people fairly new to eBay. In my experience a lot of them either don't see, or don't know how to use, the shipping calculator eBay puts in the auction when you elect Calculated Shipping. Invariably when I run an auction with calculated shipping, I get several emails from potential bidders asking me what the shipping cost is.

So how do you calculate a fixed shipping cost with the new zone system? it depends on where in the country you live. I live on the West Coast so I weigh the item, calculate the shipping to the middle of the country (St. Louis) and use it as an average. When a shipment goes to New York or Florida, I lose a little. When it goes to San Francisco or anyplace west of the Mississippi I make a little money. If you live in the Middle of the country, just figure out the cost to either coast and you will be OK.

3. Become an Instant Expert at Squidoo

This one is a little hard to explain. You have to see it to understand it. Squidoo is sort of a cross between a blog and a marketing web site. Best of all –It’s FREE.

Click here to see my site at Squidoo. If you want to set up your own site click here. Squidoo is a site where people with an expertise or passion for something create a site to share their experience. They have a links page where you can put links to your site, links to affiliate sites or to any other place you recommend. You can create a site on virtually any topic. It’s really fun and you can even earn some money. During the beta phase, Squidoo was giving its earnings from eBay affiliate program and Google AdWords to charity. But starting April 1 st, you can choose to give your earnings to charity or to share them with Squidoo. Squidoo shares the earnings from your site –what Squidoo calls a Lens, 50/50 with each lens master.

4. Red Flags That Can Get You Audited at Tax Time

It is a well-known fact that the IRS scrutinizes tax returns from self-employed people much more thoroughly than ordinary wage earners. Here are some items that raise a red flag and can get your tax return audited.

1. Avoid putting a lot of expenses under the Miscellaneous category. This alerts the agents checking your forms that you may not have kept good records.
2. Keep you business and personal finances separate. If you don't your business could end up being classified as a hobby. If this happens the IRS taxes any income but will not allow you to deduct your expenses
3. Avoid rounding off your numbers. Once again, this suggests that you are not keeping accurate records and just estimating your expenses
4. Keep your deductions and expenses in line with your income, tax bracket and the type of business you are in. For example eBay business owners don't have to do very much entertaining of customers. If you were to claim a lot of entertainment expenses or even travel expenses, this could be a red flag to the IRS.
5. Be careful how you handle renting an office. The IRS looks closely at anyone who files a schedule C return and claims rent and also files a Schedule E (rental income) form. If you are doing this to lower self-employment income this is a really big red flag. If you rent an office from yourself, I strongly suggest you incorporate.
6. If you do incorporate, be careful about paying yourself too low a salary. Your salary should be between 40% and 60% of your annual gross profit.

5. Find Great Products for eBay at Trade Shows

I am wrapping up this newsletter during the first week of April. This weekend Karen and I are going to a trade show at the Merchandise Mart in Seattle. After consignment selling, trade shows are my favorite place to find merchandise to sell on eBay. This is where you find new items long before they hit the stores. There are trade shows all over the country for all kinds of merchandise. Just last month I was in Salt Lake to attend a trade show for outdoor merchandise, Barbeques, patio furniture, garden accessories and much more. I found several new products that will fit in with my line of firepit barbeques --one of them from a manufacturer who will drop ship.

Wholesale trade shows are closed to the general public and most of them are pretty choosey as to who they let in. The best way to gain entrance is to register online or by telephone. You will need business cards, letterhead, a commercial checking account in the name of your business and a sales tax certificate. You can also register in person, but this usually involves standing in long lines, whereas if you register in advance the show organizers will usually mail your entry badges. Most trade shows are put on by just a few companies, so once you register for one show, you will get invites to other shows put on by the same company and you will not have to re-register each time.

Take plenty of business cards (many exhibitors have drawings for prizes) and a carry bag or rolling bag to hold brochures and catalogs. You can place orders right at the show and even better, a lot of the manufacturers offer show specials such as an extra 10% off if you order at the show. However, you cannot take merchandise away from the show with you, everything must be shipped. Some shows have cash-and-carry exhibits just outside the main hall, where you can buy wholesale goods in small quantities. Last year we bought a dozen really nice antiqued wood footstools at the cash-and-carry room for $10 each. We sold all of them on eBay for over $40 each.

6. Is It Getting Harder To Make Money on eBay?

That's an interesting question and one that stirs up a lot of feeling on the eBay message boards. eBay hasn't helped with their fee increases, but that isn't the total problem. Although eBay is unique in many ways, it is also susceptible to all of the forces at work on the internet. eBay is far more competitive today than it was even one or two years ago --but so is the rest of the internet. Not only must you compete with other sellers on eBay, but eBay is competing for eyeballs with all of the other shopping sites which are increasing daily.

The good news is that internet shopping is growing overall, so the size of the market is still increasing. The bad news for most small to medium sellers is that more and more large well-financed businesses are selling on eBay. If you sell almost any category of consumer goods (clothing, handbags, shoes, computers, electronics, cameras, jewelry, DVDs and so on), you are being squeezed out by large sellers who have the financial resources and employees to launch hundreds, or even thousands, of auctions. They also can buy merchandise directly from overseas manufacturers in large quantities at prices you can only dream about.

Some sellers say they are just giving up. So what is the answer?

The answer is to work smarter, focus on finding unusual products, develop and hone your niche and stay on top of your business. Experiment, research, test and --I'll say it again: Stay on top of your business. We now live in a very fast-moving world of instant communications and change. A new idea can be implemented on the internet in a matter of minutes. If you are not staying on top of your business, watching your competitors, researching the latest trends and techniques, you will be passed by and left in the dust of the internet graveyard.

Having said all that, the single best piece of advice I can give you is to spend the time developing a niche where there is less competition. The second best piece of advice I can give you is not to put all of your merchandise eggs in the one proverbial basket. Besides eBay auctions, set up an eBay store, open a web site, start a blog (to drive traffic to your web site and eBay listings), try listing some items on other auction sites such as epier, bid4assets and Overstock.comAuctions. When you do this don't forget to build your brand. Carry your name and a unique design look and feel across your auctions, store, web site and blog.

Yes --it is harder today to make money on eBay and the web, but the rewards are worth it. This morning while I was having my morning coffee, I was watching the news and the traffic report came on. Rain and accidents on Interstate 5 were causing a one-hour delay into Seattle. I chuckled and headed upstairs to my office for my 20-ssecond commute to work. Instead of an uncomfortable suit, I was wearing Dockers and a sweat shirt. And when I knock off at the end of the day, instead of climbing in my car and fighting traffic for over an hour, I just pour a glass of wine and step into the hot tub for a little soak.

7. Are Your eBay eMails Driving You Crazy?

A couple of months ago I told you about Hosted Support. This is an automated system that integrates with eBay's email system. If you are like me you see the same questions over and over again. Even though your auction description shows the shipping charge you still get emails like"How much do you charge for shipping?" Or, you clearly spell out the dimensions of the product and people send you emails asking "How big is it?"

HostedSupport provides a system whereby you can set up a series of FAQs to commonly asked questions that are connected to keywords. When someone sends you an email through the eBay system, HostedSupport will serve up pre-written answers to the question in an automated return email. There is a link in the email that says: Does this answer your question? If it doesn't, the person just clicks on the link and HostedSupport sends you an email telling you there is an email you have to answer and link to answer it.

I have been using the system for about three months now on both my web site and my eBay auctions. It has cut down my auction email by about 40% and my web site email by almost 50%.

Hosted Support offers several versions of their service for a nominal fee. They now offer a free introductory version of their eBay service called eBay Lite for FREE. It is very easy to set up and if you take about an hour to create the questions and answers, it will end up saving you that and more every day. That adds up to something everyone wants: FREE and EASY !!!

8. New Wholesale Sources for April 2006

As usual our Free Wholesale Search Engine is a great place to start any search for things to sell on eBay.

Via Trading is an old source I have mentioned before, but they have been growing and are used by a lot of top power sellers. Via Trading deals in Department Store Returns, overstocks, surplus goods,close outsand liquidation items. they sell by the pallet load and their pallets start at around $500 + shipping. Just be careful of the shipping cost. Be sure and get an estimate before purchasing a pallet.

Another large closeout dealer is Jacobs Trading. Sign up for their Hot Deals email and you will get an email about once a week with specials they have. Their products include house wares, small furniture items and accessories, tools, hardware, bake ware and more.

Laura's Country Candles sells a very unique line of scented and non-scented (or as I like to say stinky and non-stinky) candles.

CBS Commodities is a large distributor of wholesale name-brand cookware and home decor items. They are featuring a really unusual product this month called: "The Ex" When you see it your reaction will be "Oh my God."

Magnetic Product Marketing is a manufacturer of magnetic jewelry --primarily bracelets which many believe have health benefits. You see the products at their retail web site HERE and then go to their wholesale site to contact them and place orders. Both of their web sites are really crummy, but the products are priced very well.

We met the folks from Nihao Trading at a trade show a while ago. They have the hot Suduko games and other popular novelties.

The International Crystal Exchange bills themselves as America's largest Crystal distributor. You need to log into their web site. The username is customer and the password is ice4you

Ceri Wholesale is a huge wholesale distributor of handbags, shoes, belts, jewelry and fashion sunglasses. If you use the following coupon code C423CN you can get a 5% discount off of the normal wholesale price if you order before May 15th.

Have you heard of the Magic Bean? Its a plant that grows with words printed on it. Here is the Wholesale distributor.

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Well that's it for this month. Spring is finally here I hope you find some time to enjoy it.

Skip McGrath