Is The eBay VeRO Program Out of Whack?

The Online Seller's News, January 28th, Volume 11, No. 2

Tips, Tools, News and Resources for eBay, Amazon and independent Online Sellers ~ Published Twice Monthly since 1999
by: Skip McGrath

In This Issue:

Musings from eBay and beyond

1. Is The eBay VeRO Program Out of Whack?
2. This is The Season for Liquidation Sellers
3. How to Find and Negotiate Exclusive Selling Arrangements
4. Niche of The Month – Used Golf Shirts
5. Wholesale Sources for eBay/Amazon Sellers

"Lord, the ocean is so big and my hook is so small." ~ Unknown Commercial fisherman

Musings for January 2011

In the last issue I mentioned that new shipping rates would go into effect in January for sellers who ship USPS. That was my mistake. The new rates in January were for UPS –not USPS. However, new USPS rates do go into effect on April 17^th.

Some of my veteran readers might know that I have written about sourcing products from Costco and Sam’s Club to sell on eBay and Amazon. Late last year I was buying LED Tactical flashlights at Costco in a package of 3 ea for $17.95 and selling them on eBay and Amazon at prices between $17.95 and $29.95 each.

Well, this week I was watching celebrity chef Bobby Flay on TV and one of the recipes he made required real vanilla beans. Our local market didn’t have any so I went on to Amazon and bought two tubes of 5 beans each for $16.95. A couple of days later the package arrived. I opened it and it was from Costco. I called my Costco, just out of curiosity and checked the price: $8.95.

As my mom used to say: “What’s good for the goose is good for the gander.” Other expressions work too: what goes around comes around and some days you’re the windshield, some days you’re the bug.

Just a reminder: I will be attending, and speaking at, the annual ASD/AMD Wholesale Trade show in Las Vegas from Feb 28^th – March 2^nd. I am speaking on March 1^st at 10:00 AM on the topic of taking your retail business online to eBay, Amazon and Facebook.

The ASD/AMD is one of the largest wholesale trade shows in the world with over 2000 exhibitors. If you plan to attend, be sure and register online, as the lines to register on site are really long.

AuctionBytes released the results of its second annual Seller’s Choice marketplace ratings in the January 23rd issue of its AuctionBytes Update email newsletter. This is really good information for those of you who may be looking for alternatives to eBay.

Lets get started with this month’s articles:

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1. Is The eBay VeRO Program Out of Whack?

VeRO stands for eBay Verified Rights Owner (VeRO) program that let’s intellectual property owners report violations of their rights. If an owner of a trademark, patent or copyright fills out a form and sends it to eBay they will remove any listings that mention that intellectual property.  I actually used it once when an eBay seller made unauthorized copies of my eBay Consignment Manual and my sales page and was illegally selling the manual on eBay as an eBook. That is an example of a proper use of VeRO. You can also make a VeRO complaint if, for example, your eBay product photos are copyrighted and someone steals your images.

Here is an email I received today from one of my long-time readers.  It seems that they innocently listed a hot toy on eBay and it ended up getting them a black mark on their account.  Two or more of those can get you kicked off of eBay permanently.

Hi Skip,
We thought that maybe you were collecting stories like the following so we’d share this one with you.

For the moment, we now have a Very Low Policy Compliance Rating because we listed a toy we purchased at Target last Saturday made by Jakks Pacific and in turn violated the patent of a company called Zen Design (not mentioned anywhere on the package).  We’re trying to convince Zen Design to ask eBay to remove the violation because eBay’s position is that when we signed up to sell on eBay, we agreed that we would never violate anyone’s patents, etc. and we shouldn’t ever list anything until we first check to see if we will cause a problem like this with the 35,000 members of their VERO program.  The guy didn’t care that in the case of this toy, there was no way for us to even connect it with Zen Design or that it is probably physically impossible for anyone to make sure everything they list is safe.  If it accidently happens again, I’m guessing we will get kicked out of eBay like others you’ve mentioned recently.

Thanks for listening (i.e. reading).

And then came a second email

Just wanted to let you know that we just heard back from Zen Design Group and they said they would ask eBay to remove the strikes against us if we say, in a reply email, that we will never infringe on their patent again which, of course, we did.  Hopefully eBay will do this quickly.

Signed, eBay seller ______ (seller’s ID removed to protect their privacy)

The toy in question was a Real Tech Spy Net Invisible Ink Pen. In a subsequent email the seller said they researched the patent that Zen design said was “infringed” and it was for the LED in the pen. As he points out in the email, the patent holder of the LED was not listed on the box so even if someone knew this company was enforcing their rights on VeRO you would have no way of knowing it.

But this example is totally crazy. Think about this: You buy something to sell on eBay from a legitimate supplier. Inside the device is a part covered by someone’s patent. And that company can stop you from selling it. What if you were trying to resell a Dell laptop computer and Intel filed a VeRO complaint because they held the patent on the microprocessor. That is exactly what happened to this seller –how crazy is that?

In my opinion, based solely on anecdotal evidence, I suspect eBay rarely uses due diligence to investigate a complaint.  In the case above, the owner of the toy patent has no rights to protect the legitimate resale of his product.  If the seller was purchasing the item wholesale and was not an approved retailer, or if it was a knockoff, then eBay should enforce the policy and remove the listings.  However in this case, the eBay seller purchased the item from Target, who I would assume is a legitimate reseller.  Once an item is purchased through legitimate channels it loses those protections.  If this were not so, then it would be illegal to sell a used book --or virtually any used brand name product.

I am not an attorney and I have no training whatsoever in intellectual property law, so I could be wrong on this, but common sense says I am not.  I suspect if this happened to a large seller who generated six-figure fee income, that eBay would investigate and take some action if indeed it could.  But as a small seller with a couple hundred in fees per month eBay puts all the burden on you the seller to appeal, make and prove your case.

I asked eBay for a response to this issue and asked repeatedly about the issue of a seller getting an account strike when they innocently buy something from a legitimate source and are hit with a VeRO complaint when they have no way of knowing anything about any underlying patent or trademark issues. Here was their response:

“eBay is committed to helping protect the intellectual property rights of rights owners and to providing our users with a safe and enjoyable place to trade. Patent law is a complex area of intellectual property law, and eBay defers to the U.S. courts’ judgments on these matters. eBay requests that a rights owner who files a VeRO claim of patent infringement provide eBay with a U.S. court order or injunction stating that the particular product in question infringes a valid and enforceable U.S. patent and that the seller is not otherwise licensed under that patent. If the rights owner can supply this documentation, eBay will remove the reported listing. VeRO claims of this type are rare.”

Really helpful don't you think?

 

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2. This is The Season for Liquidation Sellers

The months of January through March are the “high season” for liquidation and surplus sellers. That is because retailers have so much stock they need to clear out after Christmas. The liquidation and closeout marketplace can be an excellent place to source goods to sell on eBay, but you want to be careful and understand the marketplace.

First you want to understand the goods and the terminology:

Shelf pulls – this is the best merchandise. These are goods that did not sell and were pulled off of the shelves and turned over to a liquidation seller.

Returns – This is an area where you want to be very careful. There are several types of returns. People return things they just didn’t want, or because something is the wrong size, color or model. But they also return things that didn’t work, had a flaw or something else was wrong. I am always very hesitant to buy “returns.”

Seconds -- These are goods that did not pass a manufacturer’s quality tests. Often it is something very simple like a scratch or a dent, but it can also be something very serious. You can sell these goods and make money on them, but you really need to understand the extent of the damage or imperfection. I once bought a very expensive electric smoker. It retailed for $795, but I was able to buy a “second” direct from the manufacturer for only $250 because it had a deep scratch in the aluminum on the side of the smoker. The scratch was purely cosmetic and didn’t bother me a bit.

Where to buy closeout and liquidation goods?

Probably the three most popular sources are Via Trading, Liquidation.com and Topper International (one of our advertisers). All of these firms are legitimate and have been in business a long time. That’s not to suggest that other firms aren’t –it’s just that I know these firms the best and they are used by a lot of eBay and Amazon sellers. (I have also listed a couple more liquidation suppliers in the wholesale sources section in the last article).

However you still have to be careful. One issue is shipping –this can be especially problematic on Liquidation.com. Liquidation.com is an auction site like eBay –and just as there are poor eBay sellers there are some poor sellers on Liquidation.com. Be sure and understand the shipping cost before you buy as high charges can often kill your profit potential.

One of my friends in this business is a guy named Chad Maslak. Chad is a highly experienced liquidation buyer and seller and has written a great eBook on the topic. There are a few other books out there, but Chad’s book shows you step-by-step how to buy surplus, liquidation and wholesale merchandise without losing your shirt and HOW to sell them for maximum profits!

His book is called The Insiders Surplus, Liquidation & Wholesale Buying Guide. Last year Chad offered my readers a special discount, so I emailed him this week and asked if he could repeat it. If you get The Insiders Surplus, Liquidation & Wholesale Buying Guide now, Chad will give you a $20 discount. Since I recommended this book to my readers last year he has added over 50 pages of new information. Chad is one of the good guys. He under-promises and over- delivers and his material comes with a money-back guarantee.

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3. How to Find and Negotiate Exclusive Selling Arrangements

How would you like to find a product and negotiate an agreement with the manufacturer to be the only seller allowed to sell that product on eBay and/or Amazon? It takes a little work and some sales skills –but it’s not really that hard.

One of the things small niche manufacturers worry about is eBay sellers getting a hold of their products and selling on eBay or Amazon at prices that cheapen their brand and undercut their brick and mortar retailers. When you go to a wholesale trade show, you will often find a product and when you ask about buying it, the seller asks where your store is. When you tell them you sell on eBay they tell you they won’t sell to you. I love it when this happens to me because it gives me an opportunity to negotiate a great deal.

Now here is where you have to use some salesmanship. When the person says they won’t deal with eBay sellers you immediately nod your head and say, “I can’t blame you.” Then you go on to explain that there are thousands of inexperienced sellers on eBay who don’t know what they are doing (this happens to be true by the way) and if you offer your products to them they will immediately start cutting prices to undercut each other and pretty soon all your retailers are upset and don’t want to sell you product any longer. When you explain this, you will see the person nodding their head and agreeing with you. That’s your signal to move in. First of all since you agreed with the seller and didn’t argue with them, they will tend to trust you. So make your pitch. You explain that if the seller of the product will give you the exclusive deal to sell on eBay, that you will do several things for them:

• You agree to represent their brand and logo in a way that they agree with by first submitting all your product descriptions to them to approve before you list them.
• You agree to start with a purchase of their minimum opening order. This will usually be a case lot or some number between $200 - $500.
• You agree not to sell below their MAP – minimum advertised price.
• You agree to monitor their products on eBay and if anyone else is selling them you will report them to the seller so they know who to cut off. (This will usually be one of the stores that buy from them that also sell on eBay.)

Not everyone you speak with will agree to this. In my experience it’s about 10% so you will need to speak with ten suppliers to find one. You might do better or you might get lucky and one of the first two or three suppliers will agree. I now have this arrangement with two of my suppliers –and both of them drop ship the products for me, which is even better. So the next time you run into a supplier who doesn’t want to deal with online sellers, give this a try. As I said above, it doesn’t work every time, but when it does you are in a really profitable situation.

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4. Niche of The Month – Used Golf Shirts

Suzanne Wells is one of our eBay and Amazon coaches in our coaching program. She is a very experienced eBay seller and like me is a believer in niche marketing. When she got her start on eBay, one of her first niche markets used golf shirts. Suzanne even wrote an eBook about her experience and laying out how anyone can do this. So I asked her to write a guest piece for our niche of the month.

Niche Product – Men’s Golf Shirts

As we move closer to spring time, the warmer weather only means one thing to some people – golf season! In my eBay selling career since 2003, I’ve sold over 12,000 men’s golf shirts to buyers all over the world. March and April have historically been months with the highest sales volume. Men’s golf shirts are a lucrative niche on eBay.

In my previous career as a fundraising coordinator for a non-profit organization, I organized several golf tournaments. Through this experience, I learned a lot about golfers, their preferences, and what happens to extra or overstock golf shirts created for fundraisers or tournaments. Here are some tips for sourcing, listing, and selling golf shirts on eBay.

Golf shirts are easy to find, especially if you live in an area with an abundance of golf courses. Golf shirts are given out at tournaments as gifts, prizes, or inside goodie bags. More often than not, the golfer doesn't receive his size and takes home a shirt he can’t wear. These brand new shirts end up at the Goodwill store and other thrift shops by way of a charitable donation.

The extra golf shirts created for tournaments are often donated to thrift stores after the tournament. You'll often find batches of brand new shirts, with tags, all in a cluster on a rack in the thrift store. Shirts from more prestigious tournaments and clubs often appear in off-price stores like TJ Maxx, Steinmart, Ross, and Marshall's. You can easily find brand new, designer golf shirts with country club logos at these stores for less than $10 each.

Men’s golf shirts are a good seller on eBay for several reasons. Golf shirts are a wardrobe staple. Men wear them to work, for casual day at the office, as casual wear with shorts or jeans, to church, and of course, to play golf. As corporate America loosens up on its office dress code, golf shirts are becoming more popular, and more in demand than ever before.

Men's sizes are more universal than women's, therefore, a good item for selling online. Men know what size they wear and usually the sizing holds true between brands. Men's sizing is not as complicated as women's sizing as women's clothing includes petite, plus, maternity, and other sizing categories. Men's clothing is less complicated to sell, and simply lends itself to Internet shopping.

Generally speaking, men prefer Internet shopping to the traditional kind of in-store shopping. Men would much rather go online, order 5-10 shirts at once, and have them arrive at their door within the week, rather than spending hours in the mall looking around. (They would rather be golfing!) Internet shopping is more time efficient.

Golfers are meticulous about their wardrobe. They like to look sharp on the course. They like to wear the leading brands with the prestigious course and tournament logos. (Even if they have never played on a particular course, they can buy a shirt on eBay and tell whatever story they want!) An avid golfer can log on to eBay and find a particular course logo on a shirt and have it in his hands in a matter of days.

Golf shirts are relatively easy to find, easy to photograph, lightweight and easy to ship, and most men wear them so golf shirts will always be in demand. For more information on how to profit selling men's golf shirts on eBay, read The Golf Shirt Bible, a comprehensive 40-page eBook that explains all the important details such as the most profitable brands, most popular colors and sizes, images of top-selling logos, and important key words to include in your title and listings.

This comprehensive 40-page eBook contains all the pertinent information about making a profit selling golf and polo style shirts on eBay. You’ll learn the entire process from start to finish, including:

• Why Golf Shirts are Easy to Find
• Creative Sources for Finding Golf Shirts
• My #1 Selling Golf Shirt
• The 5 Top Brands to Sell for Big Profit
• 25 Good Brands that are Consistent Sellers
• (Includes images of their logos)
• Course Logos – List of my top selling golf course and tournament logos
• (Includes images of 24 logos)
• Best Selling Colors
• All About Fabrics – Descriptions, photos of examples, and best sellers
• Sizes – Which sell best and why
• Writing the Description – Important details to maximizing sales
• Photos – What to show and why
• Pricing
• Key Words to Drive Traffic to Your Listings
• Storing
• Shipping
• Numerous photos, examples, links, and actual customer comments

The information in this eBook is based on the core product of my business – a product that has helped me profit over $100,000 on eBay in 5 years.  If you follow the information and advice in The Golf Shirt Bible, it will pay for itself in about 2 golf shirt sales.

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5. Wholesale Sources for eBay/Amazon Sellers

Tech Liquidators is a closeout auction site run by Best Buy where they sell a lot of overstock from Best Buy Stores.

Jacobs Trading is a direct source for many retailers' and manufacturers' customer returns, over- stocks, shelf-pulls, and damaged goods.

Outdoor Active Gear is a supplier for chairs, coolers, camouflage and other outdoor active gear.

Silk Flower Depot features Wholesale Silk Flowers, Artificial Flowers, Fake Flowers and is the largest silk flower wholesaler/importer in the Southeast for 12 years.

Nelson Wholesale from Texas is a large supplier of wholesale pet products.

Gioielli Italy offers fashion jewelry including but not limited to, Italian Charms and bracelets, Laser charms, custom laser charms and bracelet designs, sliding stainless steel charms for bracelets and anklets, stainless steel bracelets and necklaces like the Pandora bracelet all at wholesale prices!

JBCEA.Com - Cell Phone Accessories Wholesale & Import - Motorola, Nextel, Samsung, Nokia, LG, Sony Ericsson, Treo, and iPod Accessories.

Melody Wholesale: All Posters, R. Crumb Trading Cards, Racks Packaging Fine Art Rock Posters, art rock, wholesale posters, music, concert, venue, ecommerce, shop, online shopping.

Opteka Inc. has become a branded household name worldwide. They manufacture and distribute digital camera accessories such as SLR lenses for digital cameras, batteries, digital photo frames, tripods, flashes and cases.

That’s it for now. See you again in a couple of weeks.

Skip McGrath
The Online Seller's News

P.S. If you missed the last issue, click here to read it.

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