OnlineSellingCoach Approaching Charter Member Cap

The Online Seller's News, April 19, 2011, Volume 11, No. 8

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, Amazon and beyond

1. OnlineSellingCoach Approaching Charter Member Cap
2. How and Where to Source High-margin Products for Amazon
3. Taking Affiliate Marketing To The Next Level
4. 2011 Tax Issues and Requirements for Online Sellers
5. Can Sellers Still Make Money on eBay Today?
6. New Wholesale Sources for eBay & Amazon Sellers

"Obstacles are those frightful things you see when you take your eyes off your goal." ~ Henry Ford

Musings for March 2011

eBay has negotiated a great discount deal with the post office for those of us who ship by mail. As of April 17, you can save money when you ship First Class Mail parcels and print your shipping labels from My eBay or PayPal.

Here is an example of how much you can save on a 3 oz. First Class Mail package:

• Post Office Price: $1.71 + $0.80 for Delivery Confirmation™ = $2.51
• eBay and PayPal Label price: $1.56 + $0.19 for Delivery Confirmation= $1.75

That is a savings of $0.76. Of course this looks good on a low weight package. If you ship something that weighs a pound or so, you will still get some savings, but not as dramatic.

The Shipping Calculator, eBay labels, and PayPal labels will be updated to reflect all these changes—please make sure your shipping costs reflect these new rates, as well. For more information, visit USPS.

I announced this great free eBook in my last issue, but it got lost in all of the other news, so I wanted to give Pete another chance to get this in your hands. Pete Bruckshaw has written an excellent introduction to eBay Arbitrage called Arbitrage Confidential. He is giving away this great little book for free to my readers to introduce you to his master service product Auction Arbitrage Secrets. This book is FREE and if you buy his program, I negotiated a $10 discount for my readers. Click here to get Arbitrage Confidential for free.

eBay and Amazon will release their financial results for the first quarter next week. eBay stock has been running up lately while Amazon stock has been soft, but when the results come out I am betting it will go the other way. Why do I believe that? Well, I list the same items on eBay that I list on Amazon and over the past two months my items on Amazon have been outselling eBay by two to one.

Here is a great example. One product I sell is a 4-piece Guy Fieri chef’s knife set for $189. I sold 4 sets on Amazon over the past two weeks. The last time one sold on eBay was over a month ago.

1. One of my UK readers who has followed us for years is a fellow named Chris Molyneux. He has come out with a great program –that only works in the UK called CashBack King. Check it out it looks really neat.
2. Just wanted to remind our UK readers that the UK Edition of The Complete eBay Marketing System has been updated and is now shipping.
3. We also have a UK link to the UK-Proven Amazon Course with pricing in Pound Sterling.

Lets get started with this month’s articles:

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1. OnlineSellingCoach Approaching Charter Member Cap

In the last issue we introduced our readers to my membership online training site, www.onlinesellingcoach.com. I announced our special charter member offer of lifetime membership for $9.95. We are fast approaching the 200-member cap and that offer will go away. It is possible we may again offer the program at a $9.95 introductory rate, but those folks will not be guaranteed lifetime access at that price.

Membership includes dozens of free eBooks, training videos, the ability to ask questions from experts in eBay, Amazon, Affiliate Marketing, Info and PLR and public domain products, and I will soon be adding over 50 private label rights articles that members can copy, sell, re-title and basically have all rights to for any use at all.

With a monthly membership to OnlineSellingCoach.com you will receive cutting edge training from top eBay, Amazon, online marketing coaches and experts: Suzanne Wells, Nathan Bailey, Skip McGrath, and Jim Cockrum plus additional training from several other top marketing experts.

Every month you will have access to new cutting edge information including: Videos, Audios, content on specific niche’s, product sourcing ideas, and real techniques that we use ourselves to make real income online from home using eBay, Amazon, and several other marketplaces online. We will hold nothing back giving you “The Keys To The Kingdom,” allowing you to profit from proven techniques that we have developed and tested over the last decade of successfully running our own online businesses.

And within a week or so we will be launching our forum where over a dozen experts will be available to answer your questions and give advice on almost any aspect of online marketing. Unless you want to pay $14.95 a month (which is also well worth the investment for what you get), go to www.onlinesellingcoach.com now to lock in your lifetime charter membership for just $9.95.

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2. How and Where to Source High-margin Products for Amazon

Last month I teamed up with Jim Cockrum to launch the Proven Amazon Course which was a spectacular success. We have had over 900 posts to the forum and we already have dozens of sellers running successfully on Amazon’s FBA program.

One of the things that members appreciate is our help with wholesale sourcing for products to sell on Amazon. But that is one area that is never complete. Earlier this month I came across an excellent system from a fellow named Jordan Malik. Each year Amazon gives out an award for their top sellers during the holiday season. The award is called Top Holiday Seller and Jordan was one of the award winners for 2010. Jordan has some unique methods to source profitable products to sell on Amazon from local sources near your home.

In his Guide, Where to Find Amazon Inventory, he shows you:

• Twelve toys that you can find quickly, and sell on Amazon for BIG Profits (up to 500% or more) These are 'hidden gems' that many people don't know about.
• The names and details of 10 national retail chains - most of which are probably very close to you - where I have found boatloads of products that you can purchase for high-profit Amazon selling.
• Details of 4 other of my 'secret sources' of inventory - Again, most of which are right in your own neighborhood.
• The profit margins you can expect from each source of Amazon inventory mentioned.
• Tips on sourcing these products without leaving the comfort of your home.

Jordan has also put together a special bonus report just for my readers. It is his 2010 Amazon Sales Revenue Summary and a detailed report and analysis of his top selling toys on Amazon in Xmas 2010! (A $Priceless Value for 'Insider' Info, FREE).

You may not know it but Amazon has some restrictions on Toy Sellers they impose around Christmas time. So you really want to be registered with them as a toy seller before then so you are not affected by their restrictions.

And if you are not interested in selling toys, don’t worry as Jordan’s program covers lots of other products as well. Click here to learn more about Jordan’s program How to Source Amazon Inventory. Jordan is also including his report 12 Toys you can buy locally from retail stores and sell for high profits on Amazon.

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3. Taking Affiliate Marketing To The Next Level

Two of my best selling books, How to Make a Living Working From Home and How to Make Money Blogging From Home, both deal with affiliate marketing. Both of these books give readers a solid grounding in ways that ordinary folks working from home can make money with affiliate marketing. But I still hear from readers that they want more. How do they take the next steps to really grow a serious income?

Last week, one reader, Sandra from Connecticut, sent me an email:

Hello Skip:

Thanks for the blogging book. I followed all your steps, set up my blog and am actually making money. I think last month I made just over $400 from Amazon, Clickbank and Commission Junction advertisers. But I seem to be stuck there. How do I grow from here? Should I set up another blog or is there a way to grow this one for more money?

I get email like that all the time, so I started doing some research. I remembered a guy from the Affiliate Summit a couple of years ago who I was really impressed with. His name was Mark Ling. Mark publishes and sells an excellent course in affiliate marketing called Affiliate Blueprint.

Mark is from New Zealand but his system works anywhere in the world and in any language. Mark is a well-known expert on all facets of affiliate marketing and is a frequent speaker at online marketing events. His Affiliate Blueprint Course is amazing. Don’t even think of buying this unless you are willing to do the work –but if you are, using videos and text, Mark will literally take you by the hand and show you step-by-step how to start from scratch and start earning affiliate dollars within a week or so. Don’t worry – even a beginner can do this.

Let me tell you right up front - The Affiliate Blueprint System is not cheap. It normally costs $199.00. So I tried reaching out to the Mark and unbeknownst to me he was already a fan and agreed to a very short deal of $77 for my readers. I know that is a lot of money in this economy, but take a look and see what you get and you will understand the value.

Mark will only hold that price until the end of this month and then it goes back up to $199 which is the price he has been selling this at for the past year, and what he currently sells it at from his website.

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4. 2011 Tax Issues and Requirements for Online Sellers

Buried in the Obama Health Care Bill, was a little known provision that would require any small business to report all money you paid to any company to the IRS on a 1099 form. The law required any payment to any person or company that exceeded $600 year to file a 1099. So in our case, I would have had to send 1099s to companies such as Costco, Office Depot, the company that prints our books, Airlines that I used for business travel and so on. Fortunately this exceedingly stupid law was repealed by the new congress and President Obama signed the repeal into law last week.

Note this does not affect the requirement that PayPal send sellers a 1099 for the amounts that PayPal pays you during 2011. That requirement was included in the 2008 Housing Assistance Tax Act, which established 1099 reporting requirements for credit card companies and payment companies including Google, PayPal and Amazon.

This will turn out to be a real pain for all online sellers. What it means most to you is that you have to keep really detailed records of all of your expenses. Here is the way this works:

Let’s say your total income from PayPal from your eBay sales was $44,000 for the year. Then PayPal will send you a 1099-K in that amount. Now what you have to do is tell the IRS (on your schedule C business profit and loss form) how much your costs and expenses were and how much profit (or loss) you made. Here are just a few of the items you want to keep track of:

• COGS – Cost of Goods Sold. How much did you pay for the merchandise you purchased to resell? Don’t forget to include the cost of shipping the goods to you.
• Expenses – What were your other business expenses? These would include car expenses to run around buying things and trips to the post office, office supplies, ISP fees, any other web-related fees such as website hosting, Your eBay fees, PayPal fees, any other credit card charges, bank fees, telephone expense, any labor (did you hire any help), insurance, utilities, travel (if you went to a trade show or eBay On-Location event or any travel related to your business), home office expense (yes you can deduct home office expenses) and any other expense related to your business.
• Equipment purchases – If you bought anything big such as a car for the business, or office furniture or a computer, you need to let you tax preparer know this. Small items like printers, calculators and so on can just go under expenses but let your tax guy or gal know if you bought anything expensive.

You may be one of the rare few that can do your own taxes, but I would suggest you take all of this information to your tax preparer and let them figure it out. Invariably they will find something you missed or overlooked that can save you some money.

If you want to make your life easier at tax time and also have a way to monitor your expenses, I strongly recommend a program like QuickBooks. When you first look at it you might think it’s a little pricy but believe me it will pay for itself in time saved and the insight you get into your business expenses can really save you money.

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5. Can Sellers Still Make Money on eBay Today?

Since the economy tanked, eBay sellers have been hit with a double whammy – Fees are up and STR’s (sell-through-rates) are down. Your STR on eBay is nothing more than the percentage of auctions launched that resulted in a successful sale. For example, if you listed 40 auctions in one month and 30 of them resulted in a sale, then your STR is 75% which is considered very good. Basically any STR over 50% is usually good enough to make money as long as your gross margin is at least 30%. Of course the higher your gross margin, the lower your STR can be and still make money.

Staying on top of your STR is very important to the health of your eBay business. I often get emails from readers that say something like this:

Hi Skip – I don’t know what I am doing wrong. I sold over $3000 on eBay this month, but I haven’t made any money.

When I answer them I usually ask them to count the number of auctions launched and the number that closed successfully. I often see answers that reveal that their STR is often less than 50%. Think about this a moment: If only 50% of your auctions close successfully, then you have effectively doubled your listing fees.

There are several reasons for falling STRs on eBay:

• Increased competition in commodity products and consumer goods. As competition pushes down prices only the large sellers who can buy in volume can cut their prices and still make a profit. Marginal sellers are forced to keep their prices high and don’t get their minimum bid or reach their reserve. So more and more products are listed and fewer and fewer result in a sale.
• Fraud on eBay. Despite eBay’s efforts, fraud continues to be present. Although it is much less than media stories would have you think, it does exist and the negative media has increased the perception of rampant fraud. This has two effects: It drives buyers from the platform and bidders tend to pay less (this is called the “fraud premium”).
• Fakes on eBay. Again, although eBay works hard to police and remove fake or counterfeit merchandise, some of those goods still get through. Also again, media stories about fakes frighten buyers away from the platform.
• The lure of easy money through dropshipping on eBay. There are now about 10 large companies who offer thousands of products that can be drop shipped to your eBay buyers after you make a sale. Most of these companies such as DOBA and Salehoo (probably the two most well known) have thousands of members. These are sellers who think drop shipping is the easy road to profits. They are trying to sell products on eBay at prices that are equal to, or higher than, sellers who buy in quantity. This results in thousands of products being listed at high prices that never result in a sale.
• Increase competition from shopping sites such as Amazon and shopping engines like Froogle, NextTag and Shopping.com. It used to be that anyone who was already an eBay member automatically went to eBay first. Now people simply Google a product name and get results that allow them to easily compare prices. The advent of smart mobile devices has increased this trend.

So with all of this, how can eBay sellers still make money on eBay today? It’s not with selling popular consumer or commodity products. If you are selling new merchandise you will pretty much need to work in a niche to assure high enough margins to offset eBay lower sell-though-rates.

Of course if you are a large seller with the ability to purchase your wholesale goods in large volumes you can still buy or import goods at margins that will allow you a profit, but that is outside the reach of many small or work-at-home eBay sellers.

As for drop shipping, this can still be very profitable if,

1. You can find a very specialized niche to work in,
2. You have a high (>$50) average selling price and
3. You can source directly from an importer or manufacturer and not from one of the various membership drop ship sites.

The other route is to sell surplus or liquidation goods. Doing this you are essentially selling last season’s or last year’s models of popular consumer products, but there is a market for those from bargain hunters and you can source these products for as little as 20% of the original wholesale price.

As the economy improves, and if eBay ever gets Best Match right, we should see some improvement in STRs. Until then you really have to watch your margins and focus your efforts on those products that do have the highest margins and STRs.

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6. New Wholesale Sources for eBay & Amazon Sellers

Via Trading has just received loads of new with tag clothing including women's clothing, men's clothing, junior clothing, dresses, suits, intimates and more. Purchase one very targeted load or several loads to create a great mix of branded goods for your resale channel. All of these goods are from department stores with well-known labels and all goods are new with tags. There may be a few returns in each lot, but by far most of the goods are clean shelf pulls.

I have recommended www.DVA.com several times as a great source of DVDs. About once a week I get an email from Calle Austin at DVA.com with their specials. Here is an example of a recent email. They are a great source for CD and DVD sellers and they occasionally have other media products like games and books.

If you sell DVDs, go to www.DVA.com to register and sign up for these weekly specials.

BeeSales sells ladies fashion items and a very nice line of electrical beauty products such as flatirons, curlers and related items.

Sparkling Earth offers a wide selection of Bandanas, skull caps, Kool-Off products and more. Kool-off products include Arctic Bandanas (aka neck coolers and cool ties and body coolers).

Capico was established in San Francisco in 1996 and has grown to be the largest wholesaler of belts, wallets, and leather accessories in the U.S.A. They sell brands such as Nine West, Kenneth Cole, Geoffrey Beane and others. You will need to use the contact form to register at the website so you can see wholesale pricing.

HMC Honors is a wholesale supplier of military apparel, pins, badges and accessories.

Velvet Chokers designs & sells custom chokers & belly chain belts, retail & wholesale. You can buy 1 or 1001 Custom Chokers, Bracelets or Belts. Choose from their designs or create your own custom jewelry.

Genco Merchandise GENCO Marketplace is America’s largest direct source for customer returns and closeout merchandise by the pallet or truckload. Large supply of department store returns and clean dot.com returns: Electronics, housewares, tools, apparel, auto parts, computers, and other merchandise.

Arrowcopter is the world's highest-flying toy with unique space age action. Made in the United States, the original Arrowcopter Toy is attractively packaged in clear bubblepack, easy to display, easy to sell.

Complete Dropship claims to be a drop ship wholesaler and distributor for Texsport & Wenzel Camping Equipment and Gear. Stack-on safes, Kershaw Knives, Kowa Optics, Polaris, Victory & Kawasaki Bikes. As well as a wide variety of Watches, Jewelry, Cutlery, Toys, and more. They may be fine, but I am always leery about working with new dropshippers until I try them out and I haven’ t worked with these folks. So Caveat Emptor!

Gamla Enterprises, is a Wholesale Distributors of Digital Cameras, TV's, Media Players, Photographic and Electronic Equipment. They carry a diverse assortment of items such as Digital Cameras, APS Cameras, 35mm equipment; Lenses, Binoculars, Flashes, Tripods, Cases and a whole lot more.

Mini Gadgets Inc. offers wholesale camera binoculars, pencams, credit card cameras, wholesale wireless MP3 players, spy cameras, camcorders and much more at below wholesale prices.

Sporty K9 sells officially licensed Collegiate, MLB, NBA apparel and gifts for Dogs.

Entertainment Earth is a major retail and wholesale seller of Action Figures, Toys, Replicas, Collectibles, Gifts, and More! From Star Wars and GI Joe, to The Simpsons and Anime. Manufacturers such as McFarlane, Sideshow, Dragon, Mattel and many more. NOTE: the website is retail info only, but if you email them they will send you wholesale information.

Reiko Wireless Inc. is a professional Manufacturer & importer of cellular & iPod accessories.

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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