fer is a useful place to purchase large quantities of merchandise at whole-sale prices. In the shoe category, which is an area I am familiar with, you see manyvendors from China offering items directly to the public. In this sense, iOffer breaksthrough trade and language barriers. Browse through the For Sale listings to find themerchandise you normally sell. You won’t find a category called Wholesale, as such.You have to search through individuals listings to locate items that are being madeavailable in quantity.
Finding Domain Names at Sedo
There is another marketplace where bargaining and haggling is welcomed and, al-though you might not have the right merchandise to sell there, it’s good to know thatit exists. The website Sedo (http://www.sedo.com) is devoted to the buying and sell-ing of domain names, and it is the largest broker of domains on the Web. Listing adomain name with Sedo is free, as it only charges a commission upon the completionof a sale. Most recently, Sedo brokered the sale of the name website.com for theimpressive price of $750,000.
Although the buying and selling of domain names might appeal only to techno-crats, it’s good to remember that the nuts and bolts of the Web itself have value tosome people, and that names make a difference to a business’s success. Anotherthing that makes a difference is the ability to clear off your inventory shelves andkeep products moving through your chosen marketplaces. Chapter 6 will explorestrategies for moving stock.
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New Strategies for MovingInventory
Experienced businesspeople know that, in order to succeed, you have to keep yourinventory moving. You need to put as many items as possible up for sale, and youneed to sell as many as you can by putting them before the right set of potentialbuyers. Basically, you have two options: You can ‘‘unload’’ your excess stock ascheaply as possible and hope to make a minimal profit, or you can select the mostdesirable items and post them where a niche group of knowledgeable buyers will findthem.
In either case, eBay may not be the best choice. This chapter will discuss market-places that will help you clear off your shelves and help you sell more than you couldwithout having the Internet in the mix.
Liquidating inventory isn’t just a way to clear out your shelves while making afew pennies. It’s big business. In June 2005, Entrepreneur Magazine named LiquidityServices, Inc., the fourth-fastest growing business in the United States. Liquidity Ser-vices runs online auction marketplaces such as Liquidation.com. Marketplaceschange quickly. Liquidity Services estimates that more than $100 billion of surplusassets must be sold off each year. That doesn’t mean you have to take a loss, however.In this chapter, you’ll learn the ins and outs of using such marketplaces to sell offyour own excess inventory. You’ll learn how to use online liquidation services, howto increase attendance at a closeout sale through e-mail, and how to avoid wastingtime and money in endless markdowns. Your time and your inventory can worktogether to your business’s benefit.
Using Liquidation Marketplaces
If your primary goal is to sell a single old computer or other leftover item at a cut-rate price, eBay is the ideal venue. Shoppers on eBay are primarily looking for bar-
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gains, whether they are hunting for one-of-a-kind varieties or mass-produced con-sumer goods. However, what if you have one hundred, one thousand, or five thousandthings to unload? Although eBay has its Wholesale Lots category, it isn’t the mostpopular category on eBay and was not listed in the eBay Hot Categories Report thatwas available at the time of this book’s printing. If you want to unload excess inven-tory, you have other options that will be described next.
In the summer of 2005, a website called AppleInsider reported that Apple Com-puter was preparing to dump its inventory of Macintosh minis and G5 computersthrough the liquidation site Overstock.com—this effort coming on the heels of a suc-cessful effort to clear out previous generation iPods through the same venue. The siteclaimed that Overstock.com was able to sell several thousand 60GB iPods in a singleday by offering a discount of $100 on the devices. Later that summer, Overstock wasoffering 20GB Apple iPod (cid:6) HP 4th Generation players for $259, which was lessthan the $299 Hewlett-Packard was charging on its own website, hpshopping.com.
The point of this consumer reporting is that, if big corporations are willing tomove from their own websites to auction/liquidation sites like Overstock.com to un-load their excess inventory, you should, too.
uBidThe site uBid.com has established itself as the one of the most reliable online market-places around. Launched in 1997 and boasting more than four million registeredcustomers, this site sells brand-name merchandise for a hefty discount. One of thebest features of uBid for you as a seller is its Certified Merchant program. By certify-ing all of its sellers as legitimate businesses, uBid has largely eliminated the problemsthat come with individual sellers, so that buyers feel as confident in their purchasesonline as in a department store. In addition, bidders are prequalified in the sense thatthey have to submit credit card information before they can place a bid.
It doesn’t cost anything to join the Certified Merchant program; you need tosubmit a credit card number, three trade references, a bank account number, andeither an FEIN number or social security number. Even if you don’t run a brick-and-mortar business, you should have all of those elements from your existing eBaybusiness.
Participating in uBid’s merchant program has several advantages. Certified Mer-chants are not charged a listing fee, only a commission rate plus a 2.5 percent pro-cessing fee is due upon each sale (see Table 6-1 for rates). Since uBid itself is aliquidation business, it is familiar with the business and have an interest in helpingyour sales. You reach a much broader market here than on your own, and the buyersare interested in buying old inventory stock.
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Table 6-1. Success rates and fees on uBid.
Winning Bid
$1 to $25
Success Rate
12.5 percent
$26 to $250
10 percent
$251 to $500
7.5 percent
$501 to $1,000
5 percent
$1,001 and above
2.5 percent $2000 sell price:$50 fee plus $50 transactionfee (cid:4) $100 due
Example
$20 sell price: $2.50 plus $.50processing fee (cid:4) $3 due$150 sell price: $15.63 plus$3.75 processing fee (cid:4) $19.38$350 sell price: $33.13 plus$8.75 processing fee (cid:4) $41.88$750 sell price: $56.88 plus$18.75 processing fee (cid:4) $75.63due
It is known primarily as a site where businesses sell off used computers andcomputer accessories as well as other kinds of electronic gear. Categories like Ap-parel and Collectibles are included on uBid, but they are hardly as well populatedwith sales listings (and bids) as eBay. When I looked, I found nine pairs of men’sshoes for sale. But in the laptops, I found fifteen devices with 2.6GHz or fasterprocessors, sixty-six with 1.6GHz to 2.6GHz processors, seventy-nine with 1.6GHzor below, and so on. The bottom line is that bidders don’t go to uBid looking for one-of-a-kind collectibles. They go looking for good deals on laptops, monitors, and otherelectronics equipment.
Note: One of the best-known marketplaces for selling multiple items thatare considered excess inventory is Overstock.com. (The site is describedin Chapter 13.)
Liquidation.comThis site is the largest surplus marketplace in the world. It’s a business-to-businessmarketplace, and not primarily intended for individual sellers to offer single items.Rather, Liquidation.com’s sellers tend to be manufacturers, distributors, wholesalers,and public sector or governmental agencies that need to get rid of large quantities ofmerchandise. Instead of a single designer shirt for sale, you typically find a hundreddesigner tops for women, five hundred lots of toddler clothing, fifty MP3 players,
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sixteen digital camcorders, and so on. Although there is no minimum quantity, thesite prefers a value of at least $2,000 per lot. All sales start at $100 and there is noreserve. Fees are reportedly higher than on other sites. Liquidation.com does notpublish the fees on its website, and requires you to either phone or e-mail for them.However, according to an AuctionBytes article (see the Note below), they amount toa full 15 percent of the winning bid price, with a minimum of $150.
If you are able to provide the lots, Liquidation.com will promote, sell, and shipthem. The site can sell any type of merchandise for you, and has a good reputationin its field. While its business model is comparable to most other online market-places, its focus on selling bulk lots makes the site nearly unique.
Note: The eBay PowerSellers discussion board is crowded with com-ments about problems with Liquidation.com—about poor quality mer-chandise and poor service. On the other hand, one PowerSeller wrote apositive review about his experiences selling off items that he couldn’tmove on eBay or Overstock.com at http://www.auctionbytes.com/cab/abu/y204/m03/abu0114/s03.
Sending E-Mail Closeout Alerts
A growing number of companies are using e-mail to alert their existing customersabout closeouts. The big retailers do this in an automated way. But small auctionsellers like you and me can do this manually. Cabela’s Inc. (http://www.cabelas.com),the Nebraska-based sporting goods seller, is able to cut costs and clear out excess andodd-lot inventory by advertising via e-mail rather than using the U.S. Postal Service.Advertising sent via U.S. mail doesn’t reflect real-time inventory conditions as e-mailadvertisements do.
Donating Your Excess Inventory
By donating your nonmoving merchandise to charity, your company can earn a fed-eral income tax deduction under Section 170(e)(3) of the United States InternalRevenue Code. This can help you cut your taxes substantially, as you can deduct thecost of the inventory, plus half the difference between cost and fair market value.This can be up to twice the cost, actually saving you money. A great group that can
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help you with this kind of donation is the National Association for the Exchange ofIndustrial Resources (www.naeir.org). This group has been in existence for nearlythirty years, placing unused merchandise with schools and nonprofits, with a lifetimeturnover of over $2 billion. There is no fee to pick up your inventory, and you can besure of your items going to a good cause.
Cutting Down on Markdowns
All retailers and wholesalers know about the ‘‘clearance season blues.’’ This is a stateof mind that crops up, often after the holidays, when bales of merchandise have tobe marked down and unloaded to make way for new products. It also occurs in latesummer, when sellers need to clear out spring and summer items to make way forfall and winter merchandise. These markdowns can cut heavily into your profits. Ifyou reduce the amount of clearance you need to do in the first place, you’ll havemore first-line goods to sell at auction or on your website. A little planning can help:
•
•
Start with last year’s sales histories, and make adjustments for unusual events,such as weather, out-of-stocks, one-time promotions, and so forth. Next, factorin the appropriate increase or decrease based on your current sales trend andyour reading of the sales potential for the category for the upcoming season.Finally, for larger categories, it may make sense to break the sales plan downby subcategories, styles, or vendors.Try to avoid committing to inventory too far in advance and then bringing itin all in one shot, which is one of the surest ways to find yourself overstockeddown the road. For many small retailers, the best way to plan inventories isto plan to have enough on hand at month’s end to cover the next two or threemonth’s sales.
• Realize that your plan is dynamic and needs to change along with the market-place. Use that plan as a dynamic tool to track the progress of the season. Aseach week goes by, and sales trends begin to develop, adjust future sales plansaccordingly, and adjust inventory plans for those updated sales plans. If salesare exceeding plan, you want to be sure you have the inventory to keep themomentum going. Conversely, if sales are coming up short of plan, the sooneryou adjust your inventory plans, and thus your scheduled receipts, the lesslikely you are to end up with excess inventory that needs to be marked downat season’s end.
• Make an effort to forecast and track your sales by month and your endinginventories by month. If you keep detailed records, you’ll find it is that mucheasier to calculate how much inventory to bring in each month. You need to
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bring in enough to cover that month’s sales plan and ending inventory, lessthe prior month’s ending inventory. In this way, a buyer can know in January,when preparing for the spring season, for example, how much inventory toplan on bringing in each month of the season.
(cid:3)
Selectively Selling a Bookstore’s Inventory
Bookworks is a used and rare bookstore that has been in business for more thantwenty years on Clark Street in Chicago (see Figure 6-1). Owners Bob Roschke andRonda Pilon began selling books online in 2001 as a way to supplement the storefrontbusiness.
At any one time, Bookworks has 3,000 to 3,500 titles up for sale. But Roschkesays they only sell occasionally on eBay. The bulk of the sales come from the followingthree book-oriented sites:
Figure 6-1. This Chicago bookseller says Internet sales account for 5 to 10 percent of the company’stotal business.
(cid:2) Greg Holden.
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1. Amazon.com (http://www.amazon.com), which allows sellers to offer used and
out-of-print books as well as more current offerings
2. Abebooks.com (http://www.abebooks.com), which specializes in rare, out-of-
print books and textbooks
3. Alibris (http://www.alibris.com), which specializes in books but also sells mov-
ies and music on its website
Why focus on these sites rather than eBay? One reason is that the buyers Roschkeseeks are discriminating collectors who are skeptical about the quality they are likelyto get from sellers on eBay. According to Roschke:
‘‘eBay tends to be a great popular marketplace in terms of offering anythingor everything someone wants to sell. eBay sales don’t turn out well if thecondition of a book isn’t described properly. And condition has a tremendousimpact on a book’s value. A lot of rare book dealers wouldn’t consider buyingon eBay. They expect the condition to be described incorrectly. While eBay isfun, it’s ‘buyer beware.’’
Bookworks also operates its own website (http://www.thebookworks.com, shownin Figure 6-2) through which customers can view online auctions and search the store’sonline catalogs.
Knowledge of the market and of the kinds of customers who will pay for rare booksis key, according to Roschke. ‘‘Being a bookseller is not just about listing books onthe Internet. It’s about knowing what the market is up front. If you start using sitesthat are speciﬁc to books, you ﬁnd that the sellers there tend to have more responsi-bility to their buyers. We tend, because of the labor involved in getting sales online,to limit online selling to better books—things that are more expensive.’’
Roschke does know of stores that sell as many as ﬁfteen thousand books at atime, and that offer books for as little as one cent each. They are following the strategyof unloading excess inventory on the Internet. ‘‘On Amazon, some people sell booksfor $1 or less and, because shipping costs are ﬁxed, they can still make 50 cents to$1 proﬁt on a book because of the shipping.’’
For Bookworks, online sales are a separate activity from sales through the brick-and-mortar store. ‘‘When I ﬁrst started selling online, I tried to take books off theshelf and sell them online, and it didn’t work. Tracking when something sold and thendeleting it from the database proved really difﬁcult.’’ As a result, selling online is asupplement for Bookworks. Online sales account for only 5 to 10 percent of the busi-ness’s overall income. Roschke estimates that the store sells an average of two to ﬁvebooks a day, although sales can vary widely from two to ﬁfteen items per day. Theselective approach to online sales works better than the approach of unloading inven-tory for the lowest possible price. ‘‘There are far more books around than there aresaleable books,’’ he says.
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Figure 6-2. Bookworks, like many online sellers, uses its website as a base from which to browsesales listings in other venues.
(cid:2) Bookworks, Inc.
This chapter examined different approaches to moving inventory off your shelvesso that you can get new stock for sale. You can unload items in bulk, sell them for aslittle as one cent each, donate them to charity, or take a selective, targeted approachthat tries to attract dedicated collectors. The targeted approach is one you can pursuein many other venues when you start to venture outside of eBay. Chapter 7 willdescribe some innovative and even unusual ways to match what you have to sell tothe buyers who are likely to bid on it or purchase it online.
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C H A P T E R (cid:3)7
Finding More than One Wayto Sell
Visit eBay, and you will see hundreds of sales categories. At first glance, it seems likeyou can sell just about anything on the site. However, this is not true, because eBaymaintains a long list of prohibited items, each of which is guaranteed to offend some-one. But it’s only when you look around at other auction sites and marketplaces thatyou begin to realize the full range of commodities and services that you can marketon the Internet to round out your business.
Once you have some basic experience of selling online under your belt, thanks toeBay, you can extend your knowledge to selling new things in other venues. You canoffer things like luxury vehicles, financial instruments, and other high-priced assets atvenues that are focused on just those sorts of items. And you can sell on your ownwebsite, where you can build trust and retain customers.
You can also sell in unusual ways: you can watch live bidding ‘‘stream’’ withinyour browser window as auction participants bid on your merchandise; you can cre-ate video that displays your items with live action; you can also go ‘‘fishing’’ forbuyers who have placed want ads in reverse auctions. Although eBay also lets youpursue these unusual sales approaches, the sites described in this chapter are dedi-cated to unusual approaches. These sites let you match the merchandise you have forsale with the best marketplaces for making them available to buyers. In this chapter,you learn about the different ways to sell online once you’ve established a footholdon eBay, such as through a website, through sites that let you sell specialty items, orthrough sites that let you present your items in unusual and compelling ways.
Deciding Where to Sell: Putting Your Website First
You’re used to being part of a larger marketplace that has a built-in audience ofshoppers, a customer service area, and user-friendly utilities for creating sales listings
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and accepting payments. So it’s natural, when planning your move away from eBay,to consider a lateral move—a move from eBay to another prominent marketplacesuch as Yahoo! Auctions.
But sellers who have been in business for a while and know something about thedifferent options say that selling through your own website should be the primaryfocus of attention. You don’t necessarily have to do all the work of e-commerce alone,either. By finding the right business partner, you still get utilities for streamliningsales descriptions and accepting payments.
‘‘Your own website should be at the heart of your channel expansion activities,’’advises David Yaskulka. David should know what he’s talking about. He’s not onlyone of the best-known PowerSellers on eBay but he has also established a majorpresence as an Amazon Merchant and a Trusted Merchant on Overstock.com. Heand his wife, Debbie, operate Blueberry Boutique. They are shown in Figure 7-1 onthe About Me page of their website (http://www.blueberryboutique.net).
Nothing encourages customers to return to you on a regular basis like a gooddeal presented on a business’s well-designed website, says David. ‘‘It is very difficultto retain customers on eBay or Amazon. At Blueberry Boutique we’re among the bestin the industry at building customer loyalty. But most people who go to eBay orAmazon do a product search for, say, Zegna ties and then find us. Then they’re verypleased, and so repeat their success formula—this time finding a different seller! Buta customer who buys from your website will be much more likely to return if they arepleased with the experience.’’
What kinds of features ensure that a customer will have this sort of experience?Chapter 18 will delve in greater detail into the subject of designing an e-commercewebsite, but a quick examination of the Blueberry Boutique website reveals the follow-ing essentials:
• Navigational Aids. A search box and links across the top and left-hand sidesof each page help shoppers find their way around no matter where they are on thesite.•
A Shopping Cart. This utility, which holds items as they are chosen and addsthem up at checkout time, encourages multiple purchases. It also makes customers feelthey are on a site that is professional and well-organized. The Blueberry Boutique shop-ping cart and checkout system are provided by the e-commerce host, ChannelAdvisor.
•
Secure Checkout. Shoppers want options when it comes time to handing over
their money. They don’t want to be forced into any one choice.
•
Assurances of Safety. Throughout the site, you see mentions of money-backguarantees, Square Trade seals, and other content that tells shoppers this vendor canbe trusted.
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Figure 7-1. This husband and wife team sell through many venues, but they value their website firstand foremost.
(cid:2) David Yaskulka, CEO of Blueberry Boutique.
In addition, shoppers also get competitive prices. David does everything he can tomake his website a preferred destination for customers who first encounter BlueberryBoutique on eBay, Amazon, or Overstock. On the home page shown in Figure 7-2,you see mentions of dramatic price reductions, last-minute sales, and special shippingdeals.
The Blueberry Boutique website doesn’t contain glowing statements about thecompany’s feedback level or sales record on eBay—although David says you can useyour website to link your past performance on eBay with your current sales activities.‘‘There are ways to tout your eBay success on your own website, if done right.One is by highlighting quotes (feedback) from happy customers. Another is to buildyour feedback from a third party, such as Bizrate (http://www.bizrate.com).
‘‘You could also just highlight your eBay success directly, though this is tricky—you may wish to carefully segment your eBay sales from your website sales. Manymultichannel retailers use eBay for their end-of-life or bargain basement stock, selling
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Figure 7-2. Make your website a destination by offering incentives and special deals.
(cid:2) David Yaskulka, CEO of Blueberry Boutique.
near or even below cost. In return, they try to use eBay to grow their customer basefrom eBay and drive it to their own website.’’
One area on the website, Blueberry Consulting, explores the idea of strategicphilanthropy—the use of charity auctions to promote the company’s reputation, buildgoodwill, and gain attention.
‘‘We also use higher-profile charity auctions on eBay to build a company reputa-tion that crosses over to other channels. Our customers come to believe in us as notonly a great seller but a good corporate citizen. That inspires them to keep with us.And frankly, helping a great nonprofit along the way inspires us to keep with us!’’
Deciding What to Sell: Finding the Right Venues forUnusual Commodities
Selling through your own website gives you an important base from which to offer amore varied and extensive variety of items for sale than you ever could on eBay. Once
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you have your eBay business thriving and your website developed, you can use thosevenues to sell your core line of products—such as clothing, electronics items, or sport-ing goods, for instance. But from time to time, you might come across somethingunusual. Perhaps one of your neighbors comes to you with an unusual item to sell onconsignment—a piece of property, or a financial instrument. If you sell on behalf ofothers, or if you have some unusual things you want to sell for yourself, it pays toknow about some venues to sell them—and occasionally, the best place to make themavailable is outside of eBay.
Government Sales: Liquidating Seized PropertyThere is a real estate section on eBay, where a few state governments liquidate theirseized property. Nevertheless, if you have high-ticket items like homes, timeshares,cars, and other assets to sell, you might want to offer them on a specialty site likeBid4assets.com.
Bid4Assets.com (http://www.bid4assets.com) performs identity verification oneach of its sellers to encourage bidders to bid on high-ticket items without encounter-ing fraud. Governmental agencies often require that bidders be qualified—in otherwords, checked out beforehand to make sure their bid is serious. Bidders on sales ofitems being offered by the government need to place a deposit for each auctionbeforehand. If a bidder does not win, the deposit is refunded.
Bid4Assets is particularly popular with government agencies, which need to un-load unclaimed property and lots of other assets. If you work for a governmentagency and you have real estate or personal property to sell, Bid4Assets.com hasextensive experience with government regulations. It points sellers to a task orderform they can fill out to request that Bid4Assets.com handle their sale.
You can go on this site and sell merchandise as varied as:
Fleet/Luxury vehiclesLab equipment
••• Computers•Furniture
In summer 2005, Bid4Assets.com handled the auction of a mansion seized by theU.S. Marshal’s Office when its owner was sentenced to 137 years in prison on racke-teering and child molestation charges. It also conducted the sale of a lock purportedto be the one used by the Watergate burglars in 1972. But you don’t have to havenotable items or seized property to sell on the site. Search the listings of jewelry,collectibles, furniture, and household goods offered on the site. You’ll find a wide
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variety of items that have bids and get reasonable selling prices. Bid4Assets is a well-established site, especially because of its connections with governmental agencies.The business it gets from various government offices means it is a stable and reputa-ble marketplace for individual sellers and small businesses, too.
Sale of Financial InstrumentsThe term financial instrument makes it sound like you’re selling musical dollar bills,and in fact, selling them successfully can be music to your ears. You won’t findfinancial instruments on eBay. These aren’t musical dollar bills, but they are thingslike:
Liens
••