<s> SELLING BEYOND
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SELLING BEYOND
eBay
Foolproof Ways to Reach More Customers and
Make Big Money on Rival Online Marketplaces
Greg Holden
American Management AssociationNew York • Atlanta • Brussels • Chicago • Mexico City • San FranciscoShanghai • Tokyo • Toronto • Washington, D.C.
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Special discounts on bulk quantities of AMACOM books areavailable to corporations, professional associations, and otherorganizations. For details, contact Special Sales Department,AMACOM, a division of American Management Association,1601 Broadway, New York, NY 10019.Tel.: 212-903-8316. Fax: 212-903-8083.Web site: www.amacombooks.org
This publication is designed to provide accurate and authoritativeinformation in regard to the subject matter covered. It is sold with theunderstanding that the publisher is not engaged in rendering legal,accounting, or other professional service. If legal advice or other expertassistance is required, the services of a competent professional personshould be sought.
Library of Congress Cataloging-in-Publication Data
Holden, Greg.
Selling beyond eBay : foolproof ways to reach more customers and
make big money on rival online marketplaces / Greg Holden.
p.
cm.
Includes bibliographical references and index.ISBN-10: 0-8144-7349-0ISBN-13: 978-0-8144-7349-81. Internet marketing.
2. Internet auctions.
HF5415.1265.H654658.8(cid:2)7—dc22
2006
3. Selling.
I. Title.
2005036479
(cid:2) 2006 Greg Holden.All rights reserved.Printed in the United States of America.
This publication may not be reproduced,stored in a retrieval system,or transmitted in whole or in part,in any form or by any means, electronic,mechanical, photocopying, recording, or otherwise,without the prior written permission of AMACOM,a division of American Management Association,1601 Broadway, New York, NY 10019.
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Contents
I :
P A R TChapter 1Chapter 2Chapter 3
Preparing a Multichannel Sales EffortShould You Sell Beyond eBay?Creating a Solid Foundation on eBaySearching for Life Beyond eBay
I I :
P A R TChapter 4Chapter 5Chapter 6Chapter 7Chapter 8Chapter 9Chapter 10
Branching Out to New Auction Venues
Carrying Your Experience and Reputation to New VenuesAccurately Valuing Your MerchandiseNew Strategies for Moving InventoryFinding More than One Way to SellSelling Off High-Value Assets and EquipmentConnect with Collectors at Specialized Auction SitesReaching Local Buyers
I I I :
Opening an Online Storefront
P A R TChapter 11Chapter 12Chapter 13Chapter 14Chapter 15 Handling Payments
Partnering with a Big NameLeveraging Amazon.com’s Customer BaseOverstock.comFinding the Right Operational Partner
I V :
P A R TChapter 16Chapter 17
Selling Through Your Own Website
Planning Your Own WebsiteBoosting Your Website’s Effectiveness
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C ON TE NT S
P A R TChapter 18Chapter 19
V : Moving from Online to Ofﬂine SalesOpening a Brick-and-Mortar StoreTrade Shows, Flea Markets, and Other Offline SalesVenues
V I :
P A R TChapter 20Chapter 21Chapter 22
Supplying Your New StorefrontsFinding New Sources of MerchandiseReaching Overseas BuyersPartnering with Other Sellers
Appendix A Online Auction MarketplacesAppendix B Online Storefront SolutionsAppendix C Top Ten Tips for Moving Beyond eBay
Index
215217
230
239241251261
271277285
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SELLING BEYOND
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P A R T (cid:3)I
Preparing aMultichannel Sales Effort
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C H A P T E R (cid:3)1
Should You Sell Beyond eBay?
Why move beyond eBay? It’s a natural question to ask, even if you have picked upthis book because you are thinking of trying different online auction marketplaces.After all, eBay is a comfortable and well-established commercial website. In fact, it’sone of the world’s most popular marketplaces. If you wish to put your productsbefore the greatest number of ‘‘eyeballs,’’ you stand a very good chance of doing soon eBay.
However, now that it’s been around for a full decade, eBay’s rate of growth isslowing down. Don’t misunderstand me: the heft of a giant is still impressive even ifthat giant is no longer growing like a weed. It is mind-boggling that eBay has anestimated 150 million members worldwide. According to an MSNBC report, an esti-mated $80,000 worth of transactions take place on the site every minute, every day.1No matter what its size, every company knows the inherent dangers of sitting onits laurels. And there are more and more contenders nipping at the heels of eBay.The number of websites that let you buy and sell, create an online storefront, or postclassified advertisements is growing steadily.
Therefore, if you focus solely on eBay for your online auction sales, you might beselling yourself short. Some auction sites are less expensive and more user-friendlythan eBay. Plus, you can reach dedicated collectors through a wide variety of nicheauction sites. And you can increase your profit margin by moving some—if not all—ofyour sales from eBay to other venues. Consider the computer and accessories whole-saler Exel-i, Inc. This company used to sell 100 percent of its merchandise on eBayunder several user IDs, including LaptopBroker.com. When eBay raised its fees forGallery photos, Buy It Now sales, and eBay Stores, the company decided to save asmuch as $55,000 per month simply by not using Gallery photos and Buy It Nowfixed prices. Then, the company began to move its merchandise away from eBay.Now, eBay accounts for only 30 percent of Exel-i’s sales. The rest comes from saleson the company’s website, Amazon.com, other online venues, and direct sales to
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business customers. It’s to your advantage to look beyond eBay to save money andfind new customers. And this book will show you how to do it.
Online Auctions Are Growing
For many years, eBay really could claim to be the only viable game in town. Hopefulchallengers rose up, only to slink away in defeat. In just the last year or two, however,several other auction sites have begun to gain traction. Their success can be tracedto factors such as eBay’s fee increases and to more individuals around the worldacquiring access to the Internet. Sites such as Alibaba and TaoBao in China andiOffer, Bidville, uBid, and IronPlanet in the United States are attracting more andmore customers, thereby enabling these sites to diversify.
Who Will Benefit from This Book
This book is for several different types of sellers, all of whom are ready to expandtheir horizons beyond eBay. They don’t necessarily feel compelled to leave eBayaltogether; they simply want to look for new options and new customers:
•
•
•
The first group can be described as The Dissatisfied. These sellers have estab-lished themselves on eBay; they have a steady supply of merchandise to sell;and they make sales every week. But they are tired of watching the number ofpotential buyers dwindle. As a result, the number of bids on their items isgoing down. And their sell-through rates (the number of items they put up forsale compared with the number that are actually sold) are becoming increas-ingly dismal. In other words, they are hitting the wall in terms of profits andsales.The second group is The Disgruntled. They are beginning to feel that eBay istaking lessons from the federal government in how to undercut their profits.They love the feeling they get when they sell lots of merchandise at a goodprice, but then crash into despair when they get a bill from eBay. They growlevery time they estimate their profits, only to realize that eBay’s fees have cutinto them severely.The last group is The Discoverers. They are in business to stay and want tofish off all sides of the pier. They realize that a successful online businessdoesn’t depend on a single service provider like eBay for success and want to
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keep their options open. They want to sell directly to the public through asmany ‘‘front doors’’ as possible, whether these are websites or brick-and-mortar stores.
Whether you are angry with eBay or just looking for more sales, if you are readingthis book, you are ready to move beyond the friendly confines of eBay and explorenew ways to connect with customers and build your business.
This Book Is for Sellers
Selling Beyond eBay moves beyond the basics of shopping and buying on auction sitesand doesn’t get bogged down with topics like comparison shopping. Written withambitious sellers in mind, this book:
• Describes popular auction options other than eBay and how to get started
with them
• Explores ways to balance your eBay sales with sales on other marketplaces•
Shows you how to maintain your security and privacy even as you increaseyour visibility around the WebProvides you with a general overview of the auction scene outside of eBaySuggests ways to market your sales and your business through your own web-site
••
Indeed, you can get just as much profit selling on your own or through otherauction venues as you can on eBay. You can also combine a sales presence on eBaywith sales on your website or other marketplaces to significantly boost your income.
What You Need to Get Started
Assuming that you have already done some selling and buying on eBay and othere-commerce sites, you already have access to a computer with an Internet connection.You already have some merchandise to sell and a camera for photographing it.
Beyond these tangible items, is there anything you need to move to other auctionsites and find success? I think the answer is yes; you need something you can’t buyat the computer store. Yet, it’s something that all successful entrepreneurs have—you
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need the right frame of mind. You need vision, foresight, confidence, and a willing-ness to try new things. Here are some tangible steps for achieving these qualities:
Come Up with a PlanAny time you want to embark on a new venture, whether it’s making a commitmentto sell on eBay on a full-time basis or on a regular part-time basis, it helps to have atleast a general notion of where you want to go. You don’t necessarily have to writedown exactly what you’re going to do and how everything is going to happen: ‘‘I’mgoing to sign up with that new auction site by May 15; I’m going to open mye-commerce website by June 15; I’m going to have sales of $3,000 per month by Sept.15.’’
You can, of course, write up this sort of business plan. Businesspeople do it allthe time, in consultation with business planners. I know of one eBay PowerSellerwho has created her own business plan. But you and I both know that the vastmajority of sellers on eBay or other auction sites didn’t start out with a plan. Theystarted small as they became accustomed to the idea of selling, tried different typesof merchandise, and gradually realized that they could turn their sales efforts into afull-time business activity. Although you don’t have to go to such lengths, you shouldat least consider—and even better, write down—your goals for moving beyond eBay:
• Your main goal should be to find new customers and increase your profits,rather than simply wanting to ‘‘get back’’ at eBay for one reason or another.Because eBay still sets the standards, you won’t win if that’s your only goal.• You want to develop a more professional business presence than eBay canprovide through its About Me page feature. In other words, you want to createa website with a shopping cart and payment system so customers can makepurchases from you directly—and you don’t want to pay another monthlyhosting fee to eBay for its relatively new Pro Stores feature.
• You want to sell in multiple locations at the same time, and use your various
business sites to draw attention to each other.
Most sellers don’t have a well-formulated plan when they start selling online.They simply want to clean out their closets or make some ‘‘fun money’’ to supplementtheir regular income. What turns occasional sellers into committed, full-time business-people is the fact that, as a result of their online sales activities, they had a realizationand a desire. That’s just what you need to come up with, too. I’m talking about:
•
The realization that you can sell items to other individuals via the Internet.Not only that, but you need the confidence that you can complete transac-tions on a consistent basis so that the more you sell, the more you’ll make.
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•
The desire to have a consistent source of income, if not a full-time business ofyour own.
Of course, you also need a source of merchandise, the time to prepare salesdescriptions and manage your e-mail, and a system for packing and shipping. But I’massuming you have those already because you’ve been selling on eBay. (In case youhaven’t, I refer you to eBay Business the Smart Way, 2nd Edition by Joseph T. Sin-clair.)
A Sales NicheIt’s good to have at least a general idea of what you want to sell when you startlooking for auction marketplaces beyond eBay. That’s because what you sell can havea bearing on the auction site you choose. If you sell collectible coins, you should lookfor a website like Teletrade Auctions (http://www.teletrade.com), which specializesin online coin auctions. You might also want to have sources of merchandise thatyou can transfer from one site to another.
When you have a sales niche, you have a target audience in mind. The goal thenbecomes to have an existing list of customers as well. This set of customers, some ofwhom are inclined to revisit your store repeatedly, is essential if you are planning tomove from one website to another. It’s a perfect opportunity to contact your previouscustomers with an announcement about your new location—which, incidentally, alsoserves to remind them that you are still in business and they should take another lookat your current line of merchandise.
Tip: Describe your customers. Try to have a sense of who your idealcustomers are, what kinds of merchandise they are looking for, andwhere they hang out on the Internet. It might be useful to condensea description of your ideal or target customer to a single sentence.If you are able to identify your target market clearly, you’ll have aneasier time deciding which auction sites you want to join.
Finding your niche, ideally, means more than just knowing what you want to selland being able to describe your typical or ideal customer. It also means you like whatyou do and have enthusiasm for it. Getting started with any auction marketplace,whether it’s eBay or not, requires effort. Essential tasks like choosing a user ID,
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opening an online store, or determining how to work with the new auction site’s saleslisting system take some extra work, which will go more smoothly if you are enthusi-astic about what you do.
Be Open-Minded, Be AdventurousEach beginning seller on the Internet is at the same place: with zero sales and zerofeedback comments ( feedback is the system used on eBay and other auction sites inwhich buyers and sellers leave comments for one another to describe whether a trans-action went well or not). Everyone starts out small, in other words. You build up yoursales gradually, until, after a period of weeks or months, you are selling steadily andyour main challenge is increasing your level of productivity.
When you move to auction sites beyond eBay, you are making a leap. You maynot achieve success instantly. You may have to try different sites and different typesof merchandise before you can sell at a profit on a consistent basis.
• Be patient with yourself and don’t become discouraged. Give yourself several
•
weeks before you draw any conclusions.Your various Web pages should work together. Make sure your Web pages arepointing at one another, which improves your general level of visibility as wellas your placement in Google search results.
• Market your online sales effectively. Buy keywords or Google AdWords to
boost your sales.
• Don’t put all your eggs in one basket. Try different sites to determine which
ones work the best for you.
Note: AdWords is a marketing system created by Google that enablesanyone to market their products and services more effectively using theworld’s best-known search engine. You tell Google how much you arewilling to pay for certain words that describe what you sell. For instance,if you sell athletic shoes, you might pay 50 cents per click for the wordssneaker or cross-trainer. If someone searches for those words, an ad dis-playing a link to the website of your choice appears on the list of Googlesearch results. The position of the ad and the frequency with which itappears depend on how much you pay for the term relative to others whohave also paid, and on how many times visitors actually click on your ads.
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The bestsellers on eBay and other auction sites succeed because they have awinning attitude. They may buy more than they need; they may have to absorb somelosses from lines of merchandise that don’t sell; they may run into debt occasionally.But they love to sell, and they put all of their energies into making their businesseswork. A spirit of adventure and being open to new challenges is essential for movingbeyond the familiar and more-or-less predictable world of eBay.
Online Auction Basics
This book touches on auction techniques and approaches that are common to eBayand all auction sites, such as the need to keep a good reputation by providing excel-lent customer service, the need to present yourself in a professional manner, and theneed to find a steady stream of good merchandise to sell. But I won’t bore you withdetails about the basics of buying and selling on eBay or other auction sites.
Rather, I assume that you’re comfortable buying and selling on eBay already andthat you aren’t starting from scratch. I also assume that you have a foundation foryour business, so that you will be really ready to move on to new auction sites. Youdon’t need to be a PowerSeller or an eBay millionaire to move to another site. How-ever, it helps if your feet have already gotten wet and you’ve developed some sort ofroutine and a level of competence on eBay. You don’t jump out of an airplane with aparachute unless you have had some instruction and know your equipment. By thesame token, you don’t jump to these other auction sites without having at least triedeBay first and becoming familiar with the routine.
About the Author
Both eBay and the World Wide Web have been very, very good to me. But thatdoesn’t mean I am employed by other auction sites or that I am paid to endorsethem. My goal is to give you an unbiased, objective view of options you have availablethroughout the Web. I’ll be the first to state that I am particularly enthusiastic aboutselling online. In fact, I recommend to friends and family who want to make someextra money or try a new career that they give serious thought to selling on the Webin general or on online auction sites in particular.
I have been writing about the Web and computers since 1995, and I’ve been amember of eBay since 1997. Over the years I’ve written eight books about eithereBay or online auctions. I also sell at auctions myself, have my own websites, andhelp other companies to create websites.
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I’ve been buying collectibles for many years, and lately, I’ve begun to sell a varietyof things at auctions, including antiques given to me on consignment, shoes, andhousehold goods. I’ve learned a lot from selling, including the knowledge that, if youtake a chance and are willing to put in a lot of hard work, you can significantlyenrich your life by selling to people online. Ideally, you can make new friends, spreadgoodwill, and provide yourself with a significant amount of extra income. Your suc-cess depends on how much effort and time you are willing to expend. That is the ideabehind Selling Beyond eBay: by expanding your sales opportunities, you’ll improveyour business and boost your bottom line at the same time.
Make the Move!
If you’re reading this book, you are already hungry for experiences beyond eBay. Youshare the classic desire of every entrepreneur to strike out on one’s own and becomeself-sufficient. I urge you to venture outside the confines of the ‘‘big dog’’ in theauction marketplace and find the ‘‘pick of the litter’’—a smaller, less expensive, andmore personalized site that’s just right for you.
You don’t have to reinvent the wheel. Your experience on eBay will be very usefulin expanding your business and boosting your level of success. You still have plentyof time to get in on the ground floor and find new markets for your products andservices. If you have an established relationship with eBay, that’s great—because eBayisn’t going to go away anytime soon. But it isn’t the only game in town, either. Thenew questions for you to consider are which site is the best for you and which salesoption will help boost your bottom line. This book will help you move beyond eBayto sell smarter than ever before.
Note
1. David Faber, ‘‘Ten Things You Didn’t Know About eBay,’’ MSNBC, June 29,
2005, http://msnbc.msn.com/id/8391726.
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Creating a Solid Foundationon eBay
Once you have identified your business focus, as well as the products you want tosell and the customers you want to reach, you can take the first step in enlarging yourbusiness beyond eBay. But paradoxically, that step involves working with eBay itself.You need to decide how eBay will fit in your business plans. For a few individualswho are fed up with eBay, the answer is already clear: not at all. Those readers willprobably want to skip this chapter and move on to subsequent topics.
To my mind, completely writing off eBay is counterproductive. If you’re an ani-mal keeper and you’re trying to examine some baby gorillas in a cage, you simplycan’t ignore the proverbial 500-pound gorilla lurking in the background. That’s eBay.The site so thoroughly dominates the field of online auctions at this point that aban-doning it altogether is unwise unless you already have a well-established business thatcan run independently. (And if that’s the case, you probably don’t need this book.)This chapter will suggest ways to use eBay to your advantage—to work with the siteto establish a solid business foundation that you can transfer to other venues. Onceyou learn to run your business successfully on eBay, you can more easily do the sameon other websites. And once you are clear about the problems associated with eBay,you can make your best effort to overcome them when you move to new sales venues.
The Problem with eBay
If you look at the statistics, it’s hard to point out an obvious problem with the world’sleading auction marketplace. At the time of this book’s production, eBay is still oneof the most popular sites on the Web. A survey conducted in June 2005 by AC-Neilsen reported that more than 724,000 Americans rely on eBay for their primaryor secondary source of income.1 What’s the problem, then?
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The problem is that it’s not as easy to sell on eBay as it once was. I’ve intervieweddozens of PowerSellers (sellers who make anywhere from $1,000 to $25,000 permonth on eBay in gross income and maintain a high level of customer satisfaction)in the past few years. Many of them are using eBay primarily as a customer acquisi-tion tool for sales. They gain customers through eBay and then do everything theycan to sell directly to those customers through their own websites so that they don’thave to use eBay as an intermediary and pay eBay’s fees. They’re also moving toother auction venues such as Yahoo! and Amazon.com. Is it time for you to makethe same move, too? If you are running into the situations, challenges, or problemsdescribed in the sections that follow, you should consider supplementing your eBaysales with new venues.
Tip: You can read more about the survey of eBay entrepreneurs athttp://www.auctionbytes.com/cab/abn/y05/m07/i25/s02.
Lack of InnovationThings do change on eBay—but the changes aren’t always designed to make it easieror less expensive to sell on the site. At times, eBay comes up with new options likeProStores, updates Turbo Lister or other software, or occasionally offers promotionsthat let you add a subtitle to your sales for free. However, you don’t see changes suchas the following ones:
•
Promotions that will bring you more customers, such as new advertising cam-paigns.
• Reductions in eBay’s fees.• A way to access more than just the last ten days of completed auctions. Evenif such access were available for a nominal fee, it would be of tremendousbenefit to sellers who want to know a reasonable starting price for their mer-chandise or the best time to schedule a sale.
On the positive side, eBay has made its software platform (technically, this isknown as its application programming interface, or API) available to third parties fora fee. This means you have the option of signing up with providers like Infopia(http://www.infopia.com), Marketworks(http://www.marketworks.com), Andale(http://www.andale.com), or Zoovy (http://www.zoovy.com) in order to search sev-eral months’ worth of completed auctions or automate the process of listing items
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for sale. You can use eBay’s own tools, like Turbo Lister, eBay Blackthorne, or SalesAssistant, but the first one is limited, and the second two carry a monthly fee. Thebottom line is that things don’t change very quickly on eBay.
Note: An article on AuctionBytes, a website that follows eBay and otherauction venues, reported that several prominent eBay staff people left in2005 to join other organizations. Jeffrey McManus, a former senior man-ager of eBay’s platform evangelism team, moved to Yahoo!, which oper-ates one of eBay’s main competitors, Yahoo! Auctions. Louis Monier,who helped eBay develop its search capabilities, moved to the best-knownsearch service on the Internet, Google. Both complained of a lack ofinnovation at eBay. (Read about their decisions to leave eBay at http://auctionbytes.com/cab/abn/y05/m07/i27/s02.)
Too Many Sellers, Not Enough BuyersOver and over I hear the same complaints: ‘‘There are more sellers on eBay thanbuyers,’’ or ‘‘eBay has to do more to attract buyers.’’ It’s true, even though eBayboasts about the number of its eBay Stores. (These virtual stores are websites thateBay allows its members to create where they put their items up for sale, either byseeking bidders for items they are auctioning off or by selling items at a fixed price.)
Note: According to the market analysis company Hoover’s, eBay hostsan estimated 161,000 stores on its U.S. website alone, while hosting mor