How is eBay Really Doing?

The Online Seller's News, October 25, 2011, Volume 11, No. 21

Tips, Tools, News and Resources for eBay, Amazon and Independent Online Sellers ~ Published Twice Monthly (except in December)
by: Skip McGrath

In This Issue:

Musings from eBay, Amazon, and beyond

1. How is eBay Really Doing?
2. Is The Digital goods Market Dead on eBay?
3. How to Master Hundreds of Niches
4. New Wholesale Sources for eBay & Amazon Sellers

"The person who gets the farthest is generally the one who is willing to do and dare. The sure-thing boat never gets far from shore." ~ Dale Carnegie

Musings from eBay, Amazon, and beyond

One of my readers is a fellow from the UK whose name is Adrian Swales. Adrian has just written a neat little book that has a slightly different take on niche marketing and product sourcing for eBay. The "how to sell on eBay" parts of the book are very good –but somewhat basic. So those of you who are pretty much beginners will get a lot out of that. But, since most of my readers already know the basics, I asked Adrian if he would agree to reduce the cost of the book for my readers and he agreed.

If you click here you can get a copy of The Best Auction Money Machine at $20 off the regular price of $47. Adrian has some really good info on sourcing product from China that you can mark up as much as 1000% or more on eBay. He actually does this on a regular basis and you get to pretty much look over his shoulder. He even shows you his exact niche as well as showing you how to find similar niches and how and where to source the product. Personally I think the part of the book about researching and sourcing products from China and other Asian countries is worth the cost of the whole book.

Here is a great idea for those of you who have bought my book, How To Make Money With The Amazon Affiliate Program: James Jones has a great product called Micro Niche Finder. He has been offering this for a couple of years and continually updates it every year. Simply put, it's possibly the most powerful & popular keyword research software out there. Best of all, James is testing a new sales method where you can get Micro Niche Finder at a very low cost 30-Day Trial. But you have to jump through a small hoop to get it: After reading the sales letter, just click away from the page. Then you will get a pop-up box that will give you the low cost trial. Just click the Cancel button and it will take you to the payment page for that. This is a sales technique James is testing which is why you have to jump through this hoop –but it will get you a really good deal.

One Note: Sorry but this does not work on a Mac unless you have Bootcamp or Parallels installed.

I often get questions from readers about Sellers Voice, the system I use to record audio in my eBay listings. When I started using audio a few years ago I saw a 22% increase in sales and it is still working today. Well Sellers Voice is now out of business, but they were buying the technology from Xiosoft who still offers it today. You can click here to visit Xiosoft and learn how it works.

A group of eBay sellers have started a class action lawsuit against PayPal for holding client's money for unreasonable lengths of time. They have a Facebook page Class Action Lawsuit against PayPal 2011. And there is a website where you can download a PDF file to learn all about the suit. If you feel you may be a party to the suit you can contact the attorneys at that link to join the class.

Lets get started with this month's articles:

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1. How is eBay Really Doing?

eBay reported earnings a few days ago. At first glance it looked like a great quarter and it was overall for eBay Inc., which includes PayPal. Revenue for the third quarter ended September 30, 2011, increased 32% to $3.0 billion, compared to the same period of 2010. Thirty–two percent is a pretty great increase, but when you look between the lines part of it came from earnings booked from the acquisition of GSI Commerce and a big piece came from PayPal. Only around 14% came from the eBay marketplace. And, I suspect a lot of that 14% increase was the result of recent currency gains in the dollar. eBay includes all their overseas marketplaces in the marketplace number. So when the dollar gains value over the struggling Euro, it makes those GMV numbers look larger. (Just my opinion).

On the good news side eBay said that Marketplaces grew its number of global active users 6% year-over-year to 98.7 million and PayPal grew its number of active registered accounts 14% to 103 million.

eBay doesn't report eBay.com (eBay US) separately, but if you have been selling on eBay for the past year, I am betting that your sales are down or flat at best.

Wall Street seems to understand this. Despite the 32% increase in earnings, eBay's stock dropped from $34.40 to $31.85 with a couple days of the announcement although is has recovered a bit on news of Europe fixing its debt problems.

The other positive note was eBay's success at growing the mobile shopping applications. eBay expects to generate almost $5 billion in mobile Gross Merchandise Value (GMV) in 2011, more than double mobile GMV in 2010.

I looked at listing counts at Medved.net. Since January listings on eBay have climbed substantially from around 128 Million to around 152 million in September. That's a pretty nice jump and reflects eBay's recruitment of large sellers with thousands of SKUs. But when you look at Sell-through-rates (STRs) the picture isn't as rosy. In January STRs were above 32%. But through October 20^th of this year, total STRs have dropped below 30% -hovering around 28%. For some unexplained reason, STRs really crashed the past two weeks.

EcommerceBytes reported that Bob Swan (eBay CFO) said during an investor conference said that September was a tough month and they prospects for the coming holiday season were only OK.

It is pretty clear that most of eBay Inc.'s growth and profits have come from PayPal since John Donohoe took over. Take PayPal out of the mix and eBay would be a ten dollar stock –if that.

All in all (IMO), I believe eBay continues to struggle from a lack of marketplace positioning. Once you get outside of the eBay community, no one knows who or what eBay is anymore. The solution to this is pretty simple. Just up the road from eBay in San Jose, CA is the town of Palo Alto where possibly the greatest living expert on marketplace positioning has his office. His name is Regis McKenna.

I worked for Regis about 25 years ago when I ran the Intel account for the firm. Regis was the guy who came up with the Apple logo and provided marketplace positioning solutions for companies such as Apple, Intel and hundreds of Silicon Valley startups. eBay has been struggling to figure out who they are and what they want to be ever since Meg Whitman left. Meg had a lot of faults but she was first and foremost a marketing person. John Donohoe is a finance turnaround guy with no concept of positioning or branding. John – give Regis a call. He can help!

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2. Is The Digital goods Market Dead on eBay?

If you define "digital goods" as products that are delivered digitally, the market isn't dead --just on life support. A couple of years ago eBay changed the policy to eliminate the sale of digitally delivered goods. Then a while ago, they came out with a new policy whereby you can sell digitally delivered goods in the Everything Else > Information Products category and only if you list them as a classified ad. So yes- you can still sell them but its difficult.

The bigger question is can you still sell "information products" on eBay? The answer to that is yes. There is a lot of confusion over what constitutes information products. Most people think eBook when they hear that term. And it has been the tons of low-cost and low-value eBooks that have given information products a bad name on eBay.

There is still a very healthy market both on eBay (and the wider Internet) for good information products that deliver real value.  The only real difference on eBay today is you have to package your information product on a physical medium such as a CD, DVD, Flash Drive or even a printed book or manual and actually ship it to your customer. eBay no longer allows you to digitally deliver information products.

The world of information products today, while it does include eBooks, also includes a much wider variety of products –and even some services. You can sell audio and/or video files, recordings of old music or famous speeches, photo collections and much more.

Technically speaking if you are selling a book, you are selling an information product, but for the eBay seller when we talk about the "information products business" we are referring to self-published products or packaged products that might include public domain materials. These include books, videos, audio files, music, photographs, and electronic files that include things like design templates for eBay stores and websites, or even quilting and sewing patterns.

The eBay policy change was actually a benefit to the people who want to create and deliver quality information products, because it got rid of the many eBook junk sellers. Obviously you aren't going to sell a CD or DVD for 99¢ when your physical cost is higher than that unless the disk is nothing more than a sales pitch for a more expensive product.

You can, of course, still sell digitally delivered products from your website, blog or Facebook page or from venues like ClickBank. One strategy is to use eBay to sell your materials via a CD or DVD –or even in print. Then on the product you provide links to your website, blog or Facebook page where buyers can make future purchases from you directly and they have the option to download digital products.  For example, if someone buys my Complete eBay Marketing System, there are several links to my website printed in the book.  Once clients arrive at my website then they have the choice of both printed or digitally delivered products that I offer.

A few years ago I published my course on creating and selling information products. The course is slightly out of date and I am in the process of updating it. A new version should be ready in a few weeks. But the changes are fairly minor –the truth is not much has changed since the original came out.

So here is a special deal for my readers: If you buy How To Create and Sell Information Products on eBay and The Internet now, I am reducing the price by $20 from $47 to only $27 –and you get the update for free when it comes out in a few weeks. I will leave this new lower price in place until the updated version comes out. The Info products business is not for everyone, but if this business interests you at all, you can take advantage of this offer on one of my best-selling books of all time.

There is also one more thing you may want to consider. The Granddaddy of all books on selling information products is The Silent Sales Machine by Jim Cockrum. The Silent Sales Machine is one of the best-selling eBooks of all time –it has sold over 100,000 copies. Jim has just finished an update –this is edition 7.0. when you buy the book you get lifetime free updates.

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3. How to Master Hundreds of Niches

Janelle Elems runs an eBay information training service called OSI Rock Stars. Janelle is one of the most respected eBay trainers and authors still working today. She has just finished a new project called The Home Run Guide. This is an over 400-page eBook on niche markets and how to succeed in them.

The Home Run Guide is an easy to use e-book (including a special download for Droids and iPhones) that will help you separate the junk from the profitable treasures at garages sales, estate sales, rummage sales and thrift stores. Have you ever wanted to have all the collectible experts in your back pocket while you search garage sales and estate sales for buried treasure? Janelle collected dozens of experts (including me) to write about their special niches and how they source and sell products. Take a look at some of the things you will learn about and the experts who write about them:

When The Home Run Guide goes on sale next week, it will sell for $49, but Janelle is offering a pre-order deal where you can order the book now for only $29. Yes – you will have to wait a few days for the book (it is in final production now).

This book is a great resource for both beginners and advanced sellers. And the pre-order price is a great deal. Best of all if you have a smart phone, you can download the book and carry it with you when you go shopping. Imagine being at a garage sale or thrift shop and you see a Tiki Mug or a nice looking fishing reel. You call up the expert chapter on your iPhone or Android and see if that particular mug or fishing reel is a good buy. Now you can do for used products what pro sellers do with their scanners and new products. Not quite as fast as a scanner –but where else can you even find this information.

Click here to learn more about The Home Run Guide. Janelle even lets you read a couple of chapters before you buy. And if you are not happy she offers a money-back guarantee.

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4. New Wholesale Sources for eBay & Amazon Sellers

If you are near, or traveling through Chicago, The Merchandise Center is located just minutes from O'Hare International Airport. It contains dozens of wholesale liquidation dealers all in one spot.

Pallet Bid is one of those liquidation companies whereby you bid –much like ebay. Their merchandise is typically overstock or returns. As you know you want to be careful with returns –you can make money on them but just realize that you will often have to trash about 20% to 25% of any shipment you buy. But many of the pallets go for less than $300 and contain $1500+ worth of goods. Always make sure you know the shipping cost before bidding. Each auction shows the location of the seller, so look for sellers who are closer to you. If you live in Seattle don't buy something from Florida.

SnoWonder is –you guessed it –Instant snow. That's right –it's a powder that makes snow. This stuff actually sells really well.

DryCASE is a patented waterproof vacuum case for cell phones, mp3 players or digital cameras. DryCASE Tablet is a waterproof case for your iPad or any E-Reader Tablet.

Outdoor Active Gear sells a very nice line of camping chairs, totes and picnic sets and coolers.

One Hundred 80 Degrees is a wholesale manufacturer and distributor of giftware offering both traditional and contemporary Christmas, Halloween, Harvest, and Birthday products. This is their public site. Use the contact form to get wholesale info.

Craft Hobby Wholesale sells a wide line of art, craft and scrapbooking supplies to resellers.

Not for Navigation is a company that sells a line of nautical themed bags and other products decorated with nautical charts.

Mount-Me sells a range of clever products to mount Kindles, Xooms, Playbooks, iPads and Nooks. I have mentioned this company before but this is a great line for holiday sales if you can get a good supply in time.

A single toothbrush can harbor millions of microorganisms, which translate into harmful bacteria — bacteria that thrive in the warm, moist environment of the average bathroom. VIO-light stops these microorganisms dead in their track. This is also a public site –use the contact form for wholesale information.

Strictly Tennis sells a wide range of Tennis closeout items including rackets, bags, gloves and other tennis supplies.

Easel Moments sells a wide range of easels of all types from professional painting easels to small display easels for collectibles.

That's all for now – Happy Halloween and see you in two 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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