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The Internet Tax Bill is Coming – What You Can Do

The eBay & Amazon Seller's News, February 24, 2016 - Volume 17, Issue No. 4

Tips, Tools, News and Resources for eBay, Amazon and Independent Online Sellers
by: Skip McGrath

In This Issue:

Musings from and about eBay, Amazon and The World Wide Web

  1. The Internet Tax Bill is Coming – What You Can Do
  2. A Neat Tool for Your Website from Infinite Buyer
  3. eBay Niche of the Month – Gourmet Food Items
  4. New Wholesale Sources for eBay and Amazon Sellers

"Stop chasing the money and start chasing the passion." ~ Tony Hsieh


Musings

Here is another great scoop by Ina Steiner from eCommerceBytes - eBay Pivots Away from Big Retail, CEO Tells Wall Street

eBay will seek small businesses including artisans, crafters, and small bookstores as it pivots away from big retail, eBay CEO Devin Wenig told Wall Street analysts on Wednesday. See what else he had to say about eBay's strategy, including his plans to acquire companies this year. Read More .


Some sellers are actualy approved to sell in some restricted categories and don't know it. If you want to see which, if any, you are approved in, first log into Seller Central and then use this link.


eBay wants to remind you that the new, simplified seller standards announced in their Fall Seller Update took effect on February 20, 2016. Here's a quick recap of the updates-click any link below for more details: Starting February 20, just two key metrics will be used to measure seller performance. Read More


Amazon increased the minimum shopping cart amount needed for non-Prime members to qualify for free shipping. Non-members must now spend a minimum of $49, up from $35, to get free shipping. Members don't have a minimum. I suspect the reason for thisis so Amazon can add more people to its $99 annual Prime loyalty program.


Nathan Bailey who runs my coaching department has just set up a new shipping service for eBay, Etsy and Amazon sellers that can save you a lot of money and time. Here are the details:

Sign up for www.integraship.com for free and get free discounted commercial plus priced shipping rates, a shipping rate quote tool that shows all rates for all major carriers USPS, UPS, DHL, Fed Ex. Free order batching and shipping label integration print out with eBay, Amazon,

Etsy, and many other platforms. So all your sales across multiple channels batch into one place tracking everything and automatically keeping your customers informed of the tracking info.

One of the benefits to the service is live phone support

available to teach you how to set it up. http://www.integraship.com


You may have heard rumors about Amazon leasing aircraft and setting up their own Global Delivery service. Well its true. Here is a link to an article that describes the program.


It looks like eBay needs to raise some money. This announcement just came out on Feb 22nd.

SAN JOSE, Calif.--(BUSINESS WIRE)-- eBay Inc. (NASDAQ:EBAY) today announced the pricing of an underwritten public offering of $750 million of its 6.00% Notes due 2056 (the “Notes”) at an initial public offering price of $25 per Note, plus accrued interest, if any. eBay expects the offering to close on February 29, 2016, subject to customary closing conditions. eBay intends to use the net proceeds from the offering for general corporate purposes, which may include capital expenditures, share repurchases, repayment of indebtedness and possible acquisitions.

The Notes have been approved for listing on the Nasdaq Global Select Market under the symbol “EBAYL.” eBay expects trading in the Notes on the Nasdaq Global Select Market to begin within 30 days after the original issue date of the Notes. eBay actually has a lot of cash but it is tied up overseas and can’t come home because of the high US taxes they would incur.


Remember the new FBA fees went into effect on February 18th. You can see the new fees here.


Lets get started with this month’s articles:

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1. The Internet Tax Bill is Coming – What You Can Do

A national Internet Sales tax is coming and with all the lobbying power of the big firms like Target, Sears, Home Depot and other retail giants there isn't much we can do about it but there are some things. The act is called the Marketplace Fairness Act and it will require small internet retailers like us to collect and pay sales tax on all internet sales. (except food and clothing in some states).

Since it is highly unlikely we can stop some form of Internet tax, there is a better way and my congressperson suggested that if enough sellers wrote their Senators (where the bill is now) that there is a possibility it could be changed. Here is the idea:

Instead of us sellers having to deal with all 50 states (which BTW, contain a total of 9600 separate taxing districts), have the Federal government set up a fixed internet tax amount on all internet sales. Then each month, or quarter, sellers would just send the money to the IRS and the IRS could send the money to the states proportionally based on their population. I know that all states have different amounts of sales tax so the amount each state got would not necessarily be even, but it solves the bigger problem of sellers (and the states) having to deal with millions of small sellers and tiny amounts of money that in reality it costs the states more to collect than they receive.

Here is an example. Here in Washington State where I live, we have about 40 different taxing districts. On many occasions, we have done our quarterly sales taxes and since the sales were so small, the amount of money sent to many of those districts was under 50¢. But a county worker who probably makes $30 an hour or more has to process that 50¢ into their system which you know costs them more than 50¢ to do, so they are actually losing money on that collection.

eBay's legislative action team is fighting the Marketplace Fairness Act (For some reason Amazon is not) but you can fight it to. Since the lobbyists have spent millions of dollars lobbying congress there isn't much chance we can kill the concept, but if enough of use send this idea to our Senators it is possible they might consider this new system as it solves the problem the big stores have of competing with millions of us internet sellers and the federal government usually likes to have these things under their control instead of the states.

Here is the link to find and contact your Senators and congresspersons.

You can send them an email with your ideas. Remember keep it polite or they will just trash it. If they hear from enough of us it might just work.

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2. A Neat Tool for Your Website from Infinite Buyer

Last year I told you about a new website for online sellers where buyers can make an offer. The site is Infinite Buyer. In all honesty this outfit has struggled to gain traffic and traction for a while, but the founders are really smart & honest people who are keeping at it until they are successful.

I know most of my readers are eBay and Amazon sellers but I also know many of you also have websites.

Here is a guest article by Brian Grega, one of the founders of Infinite Buyer, about a new great tool they have developed that can possibly help you make more sales from your website.

How to Sell More Profitably from Your Website

Online shopping reached $304 billion, and nearly 9% of total retail sales in the U.S. And yes, Amazon remains a giant in this market, as most estimates indicate that 1/3 of all online retail sales occur on Amazon. But what online sellers need to recognize is that two-thirds of online retail sales still happen on other websites, like yours.

And, when customers transact on your website, you enjoy the following benefits.

  • Higher Margins - no listing fees, no fulfillment fees
  • Reduced competition - the consumer is on your site without seeing alternatives on the same page, your products are not a commodity
  • Up-sell opportunity - you get the accessory add-on, not another seller
  • Branding - visitors see and know your brand versus on Amazon where you may become a nameless vendor

However, in order to succeed at selling more frequently and more profitably from your own website, you need to understand how to leverage the first principle of marketing, "Know Thy Customer!"

The Primary Reason for Low Conversion Rates

The biggest challenge facing most online retailers is that on average, the conversion rate across all retail websites can literally be a fraction of a percent.

Even worse, shopping cart abandonment rates are estimated to be as high as 75% and growing, in 2015 alone, nearly $8B worth of items were left behind by consumers, who have moved an item into their shopping cart, but failed to transact.

Study after study shows that the primary reason for low conversion rates and high shopping cart abandonment rates is simple, it's price.

Whether it's "unexpected shipping costs" or simply to compare prices from your competitor's site, the fact is, consumers have a lot of power with the internet, they leave your site and search for the best deal for themselves.

SO, in order to succeed, do I have to offer the lowest priced product?

Not necessarily. If you accept the premise that the internet allows consumers both the convenience and the opportunity to buy items they want, at a price they are willing to pay, which is in almost all cases, lower than the manufacturer's suggested retail price, then you will have to offer a price lower than retail, and low enough for the consumer to transact on your site, rather than going to look for a lower price from your competitor's websites.

But, here's the good news, you do not have to publish a discounted price for all consumers to see, as that sets an artificial "ceiling" on your price, a consumer will never transact with you at a price higher than what you have published. The secret is to be able to sell at a unique price point to each individual buyer - at the price they are willing to pay and at a price you are willing to accept.

Infinite Buyer's "Make Your Deal" button on your website

Colorado-based Infinite Buyer Inc. has just announced a new service, where online retailers can place a "Make Your Deal" button on the seller's own website, allowing consumers the opportunity to digitally and automatically negotiate a successful transaction before the consumer leaves to another website.

With the "Make Your Deal" button, you don't give up control of your price, you simply control the range of prices various consumers will buy at. You would set your product's price points at which you would either, "decline", "counter", or "accept" a shopper's offered price. You can modify those price points, in real-time, anytime, without publicly revealing those discounted prices. (Side note from Skip - This is similar to eBay's Best Offer feature which has been shown to increase sales by over 15% on items that allow Best Offer).

The benefits of using Infinite Buyer's "Make Your Deal" button are the following,

  • Consumers stay on your website and work toward a transaction with you
  • There are no listing fees, you only pay Infinite Buyer if you transact
  • Low Infinite Buyer transaction fees of 5.9%
  • Cash comes in faster, as you get paid when the transaction happens

Infinite Buyer takes the risk

If you register with Infinite Buyer and begin using the "Make Your Deal" button on your website before March 31st, 2016, Infinite Buyer Inc. will provide a free trial, with no transaction fees for 90 days. This will give you time to see if you can sell more on your website, improve your operating margins, and increase your cash flow.

Click on this link to find out more.

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3. eBay Niche of the Month – Gourmet Food Items

I know a lot of you sell on both eBay and Amazon and on Amazon, Gourmet Food Items are a restricted category that requires approval. When you request approval two of the things Amazon requires are:

  • Three copies of invoices from actual food wholesalers
  • A Website where Amazon can see your listings

Well eBay can solve both of these problems for you. One thing that stops most sellers is they are afraid to buy the food items before getting approval as they feel they might get stuck with the items and not get approved. That is the first problem eBay solves. I sell in the gourmet food category on both eBay and Amazon -and although my items don't sell as fast on eBay as they sell on Amazon -they do sell.

So you can go ahead and purchase some items and list them on eBay while you wait for Amazon to approve you. When you buy your items just make sure the vendor sends you an invoice and you keep a copy of it so you can scan it and upload to Amazon with your approval request. Once you are approved, you can still source from retail stores. One of my biggest sources used to be Trader Joes stores and their items sell quite well on both eBay and Amazon.

The second issue is a website. Well, as it turns out, Amazon will accept your eBay storefront as a website where they can check your listings. One thing to be careful about - eBay only requires images to be 600 pixels on a side whereas Amazon requires at least 1000. So make sure your store images are at least 1000 pixels on a side so when Amazon looks at them they will approve you. Another thing Amazon now requires is you include an image of the side or back of the package that shows the nutrition information label. So be sure and include an image of that also.

And of course, you will have to set up an eBay Store so you can get a storefront to send the link to Amazon, but if you want to you can close your eBay store after you get your approval. Although you may want to keep it open as my eBay store does pretty well.

What kind of food can you sell?

Obviously you cannot sell fresh or items that need freezing or refrigeration, so that means you are looking for packaged items, such as canned goods, packaged dry foods and that sort of thing. If you are an FBA seller, be careful with liquids. Amazon has a rule that you may not send any liquid to an FBA warehouse in a glass container that is more than 4 ounces in size. Metal and plastic are OK, just don't buy any 12-ounce bottles of olive oil.

Some of my best selling food items include canned sardines, caned baby octopus, smoked salmon, beef jerky, rice, spices, hot sauces and specialty oils (I get mine in metal cans).

Where can you source food items?

One of the easiest and best places are local farmer's markets. These will start to open soon as we get closer to Spring. Yes, most of the produce at farmer's market is fresh, but I have never been to a Farmer's market where I didn't see some local entrepreneurs selling some packaged goods like honey, spices, hot sauce, beef jerky and so on. Just approach these folks and ask if they sell wholesale by the case. You could offer to sell them on consignment but I have found most of them will not do this, but they will almost always sell in fairly small quantities such as a case of 12.

The other way to find Food wholesalers is just to Google Food Distributor with the name of your city. Such as Pittsburgh food distributors. I did this and here is a partial screenshot. There were actually 6 pages of results.

Now some of these folks will be fresh food distributors, So just hit all the websites until you find a few that sell they type of packaged foods you are interested in. Also some of them will be large distributors who only sell to supermarkets and grocery stores, but that is OK as I guarantee there will also be some smaller distributors who will work with you -just keep looking until you find them.

The third way is when you are in a grocery store and find an item that you want to sell, just look on the package and there will almost always be a website for the company. Copy down the website (or take a photo of the package) and when you get home visit the website and send the company an email through their Contact Us form and ask if they have a rep or distributor in your area. Not all of them will answer, but most will.

Here are just a few completed listings from eBay. For the first one, I just typed in Spices and the second one I typed in Trader Joes:

So as you can see, food items do sell on eBay.

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4. New Wholesale Sources for eBay and Amazon Sellers

King Ice sells a large line of bling and hip hop jewelry and their order minimums are very small.

Style In Fashion sells a large line of lower cost women's fashion items.

Tiger Trade is the largest liquidator of fashion good in the USA and they ship all over the world.

Ramson's Imports is a family owned and operated company supplying other wholesalers and distributors of general merchandise such as Bandanas, Confederate Items, Convenience Store, Crystals, Display Racks, Fans, Flags, Hats, Jewelry, Key Chains, Lapel Pins, Leather Products, Licensed Products, and thousands of other items.

South China Imports is a large importer of slippers and sandals and has literally thousands of different products. Their quality varies with price and they carry both low and very high quality products.

Strips Inc. sells a line of products made from animal fur that is discarded such as tails and feet and so on. Their most popular products are Davy Crockett Hats and real fur ear muffs. (I know some readers hate fur products, but it's not my job to judge - I just put out the wholesale sources when I find them).

Haute Jewelry Concepts sells a large line of low to medium priced fashion jewelry

Ultra Balm is a line of skincare products that sell very well and they will send you a free sample.

Dazzle Dees Novelties sells a very nice line of home décor items including ship models.

Silver Rush sells a large line of very nice sterling silver jewelry.

1Stop Wholesale is the largest distributor of recycled clothing in the US. They sell used blue jeans for as low as $3.50 pair. Don't laugh - I have seen used blue jeans selling on eBay for as high as $50 a pair.

That's it for now. See you in early March.

Skip McGrath
The eBay & Amazon Seller's News

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


Here is a look at what I am selling on eBay right now:



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