Will eBay Be Sold and Who Will Buy It?
The eBay & Amazon Seller's News, May 25 2015 - Volume 16, Issue No. 10
Tips, Tools, News and Resources for eBay, Amazon and Online Sellers
Its been a while coming but we finally have the videos ready from the Wholesale Sourcing Conference that I put on with Jim Cockrum, Jose Calero and John Bullard. About 100 people paid nearly $1300 plus airfare and hotel costs to attend the conference, but you can see the entire conference for just $127.00. Click here to learn more and see some video testimonials from real attendees.
I usually publish twice a month, but in early June I am taking a vacation and will not publish in June until I return about June 20th. That is one reason I have made this issue a bit longer. (Its always dangerous to let the public know when you are going to be away, but if there are any bad guys reading this -my son will he house sitting with our insane dog).
We all know how important it is to back up our computers. A few weeks ago I told you about iDrive and a special deal they did for my readers. Well then contacted me this week and said they are willing to extend the deal for a few more weeks. Click here to see the offer.
Amazon just announced that this past holiday season, the number of Fulfillment by Amazon units shipped worldwide increased 50 percent from the same period a year prior. So if you are not selling via FBA you may want to reconsider it. I know it's working as our holiday sales (November and December were up 24% over the same period last year. Yes, it does cost more to sell via FBA, but you sell so much more that this easily makes up for the lower margins.
One of the things I like about selling on Amazon -especially in FBA is their detailed reports that help you run your business efficiently. Here are some other helpful notices from the Amazon FBA newsletter that can help you run your business better:
Check out the following Amazon Seller Central resources to ensure you maintain healthy inventory levels in fulfillment centers as spring turns into summer:
Business reports: Take advantage of the Inventory In Stock report and "Inventory Opportunities" reports (sign-in required) in the Amazon Selling Coach section of the Seller Central Business Reports to find opportunities to restock and stay in stock on relevant products.
Replenishment Alerts: Receive Replenishment Alerts when your inventory drops below the replenishment levels you set.
Inventory Health Report: Forecast the demand for products with the Inventory Health Report (sign-in required).
Admittedly it does take a while to understand and digest these reports but once you do you will see how they can really help you become more efficient and improve your profits.
Do you struggle with Bookkeeping for your Amazon business? If so Jessica Larrew (the Selling Family) has just come out with a super tutorial about how to use the popular GoDaddy bookkeeping system for your bookkeeping needs. This is a complete tutorial with both demo videos and downloadable PDF files with complete instructions. Click here to read about the project.
Its now late May but August will be upon you before you know it. It's now time to start thinking about your long-term storage fee assessment. On August 15, 2015, inventory that has been in an Amazon fulfillment center in the U.S. for six to 12 months will be subject to a Long-Term Storage Fee of $11.25 per cubic foot. This is in addition to the August 15 fee assessment of $22.50 per cubic foot for units that have been in fulfillment centers in the U.S. or Canada for 365 days or more.
Its no secret that sales slow down in the summer so now is the time to lower prices on those slow moving items to avoid these penurious storage charges.
If you are always wondering where to find information for sellers on Amazon, here is a link that was recently posted in one of the Amazon sellers Facebook groups I am in.
NOTE: This link will not work unless you are already logged into Seller Central. This page has a wealth of information about where you locate anything on Amazon and you should bookmark it for future reference.
Lets get started with this month’s articles:
Wall Street is bounding with rumors that eBay will be put up for sale shortly after the company spins off its PayPal unit. No one knows for sure if these are true - but as the old saying goes: "Where there's smoke there is usually fire."
The PayPal spin off will enrich eBay's cash coffers by a few billion dollars making it an attractive takeover target. The new Chairman of the board is from Carl Icahn's shop, a noted takeover specialist. But a hostile takeover may not be in the works if eBay just puts itself up for sale.
So who might the buyers be? Two big names come to mind - Yahoo and the Chinese behemoth that just went public, Alibaba. Either of these two companies would make sense and they both have the cash and purchasing power to do the deal. Other names that have been mentioned are Microsoft and Etsy (who also recently went public and raised a ton of money) but I find both of those unlikely. A third possibility would be a private equity firm.
Many of eBay's recent executives and board members came from the Bain Group, a private equity firm, which was formerly headed by Mitt Romney former presidential candidate. Private equity groups are investors who buy distressed companies and turn them around. That usually involves a lot of downsizing and complete repositioning of the company. It would be interesting to see if eBay could be completely repositioned in the marketplace, which is what the former CEO John Donohoe tried to do with a stunning lack of success.
Back to Alibaba and Yahoo. I really think these two companies would make the most sense, as they are both experienced in online marketing. Yahoo actually used to compete with eBay in the auction business but eventually dropped out due to eBay's stellar growth in the late 90s. Yahoo's experience with search engines could be a good asset to getting more traffic to eBay, which is something eBay sorely needs. But the downside to Yahoo buying eBay is Google would most likely not index eBay listings.
Alibaba's already runs TaoBao -the largest auction site in China and is moving into America with recent purchases of Auctiva, Vendio and a large stake in Zuilly. Here is a link to an interesting article about Alibaba in the Wall St. Journal. It is one of the best overviews I have seen on the company. I should also note I have read news stories in the financial press that speculate that Alibaba may also buy Yahoo. If they did that I doubt they would also buy eBay but they do have enough cash reserves to do both.
All the eBay sellers out there are wondering what changes will come from eBay. I think its just too soon to speculate on any ideas, as there are so many ways this could go. So best strategy if you sell on eBay is just keep selling and roll with the punches for the mean time. But take a look at expanding your business to multi-channel sites like Amazon, Rakuten and Sears so you have a plan-B.
Last week I discovered a new service that allows sellers to purchase products from Amazon that are all new goods, never sold. Have you ever gotten a reimbursement notice from Amazon where they said the warehouse lost your product? Well it might surprise you that with over 50 warehouses and millions of product arriving every day, this happens to the tune of about $30 million per month. That is such a stunning number its hard to comprehend - but its true.
But there is another side to the story. Amazon also finds many of these goods. In some cases they return them to your inventory and reverse the reimbursement, but in most others Amazon just puts them in a storage bin.
You can imagine that these bins get full and since these are all new products Amazon doesn't simply want to throw it away, but storage costs add up. So what Amazon does is sell these goods in the liquidation market.
Last week I discovered the company that Amazon sells these goods too. The company is 888 Digital. When they buy the goods from Amazon they arrive on pallets in containers with all different categories mixed up together. A box might contain a mixture of clothing, health and beauty, jewelry, toys, electronics and sports equipment. What 888 Digital does is sort the products by categories and create lots for sale by category. See screenshot:
When you click on one of the categories you can see the contents of the lot including the ASIN number, your cost and the MSRP of the item. (You have to scroll to see the whole list but below is a partial screenshot of a few items in the pet lot)
Notice that in the first screenshot there is a link that says, "Negotiate pricing." When you click on that lot you can offer a price that is 10 to 20% less than the asking price -and in many cases that price will be accepted.
If you are interested in learning more about this, go to this link and register. But, I also suggest you give the company a call at (Toll Free): 1-844-888-LOTS (5687). Since there is more to the sign up process than just clicking on a link and filling out a form, I suggest you call first to get details and instructions. Frankly -it's a bit of a process, but only takes a few minutes.
And remember - this is all new, never sold merchandise - most of it still in the original packaging the seller sent into Amazon.
This company is also a distributor for other new products - mostly in electronics but they sell other products as well. They represent some large, well-known brands including Panasonic, Kitchen Aid, De Longhi, JVC, iLuv and Kodak among others.
There is an old saying in some places that goes: “If you don’t like the weather, wait five minutes and it will change.” Amazon is not that bad, but it does seem like every time you get used to how everything works - they change it. If you have looked at your seller central account lately you have probably seen this notice.
And, that is just one of the changes. Here are a couple of other recent announcements from Amazon:
Changes to Order Reports
As of February 9, 2015, Order Reports no longer includes certain fields that previously provided jurisdictional tax breakdowns. You will still have access to this information, though, in the Sales Tax report, located under Reports > Tax Document Library > Generate a Tax Report. Item tax, shipping tax, and gift-wrap tax amounts will still be available in the Order Report.
New Feature - List from your Mobile Device
We are pleased to announce a new listing process designed for your mobile devices. You will now be able to list items for sale from your phone or tablet by tapping the "Sell on Amazon" button, if available, on a product's detail page. The "Sell on Amazon" button will be displayed on mobile detail pages when you are logged in to your account.
Please note, you must be logged in to your seller account to see the "Sell on Amazon" button. This feature is only available from your mobile web browser and is not yet available from the Amazon mobile app.
Amazon also announced they are researching changes to listing detail pages.
This next article is a guest post by Brian Frazier from ZZS2.com.
Making real money selling other people's stuff is a reality for many home-based and brick and mortar businesses. Let's assume you already have a small consignment business or service and you want to increase sales. You do some marketing and next thing you know you are inundated with lots of customers and lots of stuff. You are now behind the eight ball, what was once simple and worked well enough before using spreadsheets, listing tools and other means to keep track of customers, inventory, listings, sales, shipping, customer payouts, etc. is no longer cutting the mustard. Customers are calling wondering why their items are not listed yet, some items can't be found, others are being returned because the wrong item was shipped to the wrong buyer…You are swimming in paperwork…working harder and making less money after all is said and done. What just happened?
You've just been introduced to what in Economics is commonly referred to as "a limit in economies of scale." You've reached the productive capacity of selling with the current method you are using and need to upgrade to a more effective one. For example: if you are cutting a branch or two off of a tree a hand saw will work fine, but if you need to chop up the whole tree I would suggest some power tools.
And, with large-scale consignment selling you need some integrated "power tools" to handle:
Further, these tools should function together with different selling venues (eBay, local in-store, Craig's List, etc.) or it can get very messy. Using multiple sales channels helps you maximize sales and profitability by selling the right item in the right venue/sale channel (This will be addressed in a future article.)
By putting together the right scalable "selling system" you can increase efficiency to handle an increase of volume and spend less time on back office
tasks and more on selling.
When Snap2, Ship Etc. added an eBay Selling Service to their business offerings they ran into the exact scenario described above. They tried several third-party applications; each had advantages and disadvantages, but did not offer a complete enough solution.
The owners, being ex-IT guys, decided to approach the problem head-on. They started a new company; ZZS2, Inc. contracted a software company and developed an advanced Multi-Sales Channel Selling System ZZS2.com (short for Zip Zoom Sell times 2 or squared for techies.)
Using ZZS2.com, (Snap2 Ship) has sold over 10,000 items by listing on eBay (100% Feedback rating), Craig's List and selling right out of their store.ZZS2.com is a scalable end-to-end, web based multi-sales channel Selling Solution that makes consignment and non-consignment selling on eBay and other sales platforms Fast, Easy and Efficient.
If you are a consignment seller, the folks at ZZS2.com would love for you to demo their selling solution system for 30-days, Free. Just click this link ZZS2.com to find out more or sign up for your Free 30-day trial.
Remember - some of these websites are the retail website of the manufacturer. When you see that use the contact form to ask for wholesale reseller information.
None of these companies drop ship unless it says so in the listing.
A1 Home Collections sells handcrafted decorative pillows, doormats, and lamps with contemporary and novelty designs.
Propel Imports is a Distributor of Scooters and Mopeds including complete line of parts.
Sierra Naturals is a small family run business. All products are handmade in the USA. All of their products are hand mixed with all Natural and Organic ingredients. This line is a great alternative to expensive lines.
Drive Green sells a one-shot tire inflator system to repair flat tires on the road.
Mona B sells a nice line of unusual handbags and shopping bags.
Steel Heart Ltd. manufacturers and sells a line of stylish home and garden products. They offer a wide selection of quality handcrafted metal products for the home and garden, which they design, manufacture, and import.
Rheos Gear makes and sells Interchangeable sunglasses designed for the outdoor enthusiast.
Wholesale Car Covers & Accessories is the exclusive drop ship wholesaler and company rep for many businesses such as Budge Industries (vehicle covers), Blockit & Lockit Systems (The WRAP steering wheel lock) Guard Dog door lock and more.
Zen Art & Design makes and sells Hand-designed, eco-friendly, made in the USA, artisanal, wooden, jigsaw puzzles that are fine art and heirloom quality.
The 3-D Company sells a really neat line of belts, buckles and other western products.
Magid Handbags is a recognized brand of fashion & designer handbags, purses, and women's accessories. Their collections of daytime and evening bags range from casual everyday totes to the most fashionable purses.
ZoloWear makes a line of high-design baby slings, pouches, and carriers for hip parents.
That’s it for now. Remember my next issue will be out in late June.
P.S. If you missed the last issue, click here to read it.
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