The
Basics of Starting an eBay Business
Overview
It
doesn't take a genius to make millions on eBay, nor does it require you
to have any specialized computer knowledge. You don't even
need to be a skilled entrepreneur, because eBay does most of the work
for you. With over 1.5 billion page views per month and more
than 1000 categories, they bring customers TO YOU and save you enormous
advertising costs. Your job, therefore, is to make a
successful sales pitch to the customers who see your auctions, and
doing that isn't as easy as you might think. You will be
competing with more than two million other eBay sellers, many of whom
are veterans at online marketing and highly knowledgeable in the niche
markets found on eBay. So how do you compete with
them? The answer is simple: INFORMATION! This
manual provides you the information needed to get ahead on eBay and
gives you an instant edge over your competitors. I will
provide you with insider secrets on eBay trading that I have learned
from years of online auction sales. And I'm not making an
empty sales pitch, because I've already sold you the manual!
If you read this handbook carefully - not once, but several times - and
if you follow the advice set forth in these pages, you will be armed
with the knowledge necessary for an extremely lucrative home-based
business selling virtually anything on eBay.
Requirements
A
computer, an internet connection, an open mind, and a modicum of
intelligence. You will also need to be familiar with the eBay
format and know the basic functions of listing items on the online
auction site. This manual is not intended for complete eBay
novices nor does it cover basic features such as registration or how to
list a product. I have written this handbook with the serious
eBay seller in mind who wants to learn the secrets of making hundreds
of thousands of dollars using proven selling strategies CUSTOM
DEVELOPED specifically for eBay auctions!
Getting
Started
I'm
going to assume you are familiar with all of the basic features and
functions of eBay. Before you even entertain thoughts of
making a six figure income online, you need to hash out a few basic
ideas. What do you want to sell and why? Who do you
want to sell to? Will your product appeal to everyone or only
to a select niche market? Are your potential customers
pre-qualified for your product? (We'll discuss what that means in a
later section). Where can you obtain your product? How
popular is your product? What is the age-range and
income-range of your potential customers? Start thinking
about all of these questions right now. The most important advice I can
give you about online marketing in general is to develop a MARKETING
STRATEGY before you even start selling your merchandise.
Let's start with the most important decision you have to make: what to
sell.
What
to Sell
With
over 1000 categories, you can sell virtually anything on
eBay. But choosing what to sell can often be
overwhelming. My advice is to look first to your own hobbies
and interests, because the most successful sales pitch ALWAYS COMES
FROM THE HEART. It sounds corny, but it is TRUE. If
you don't believe in what you're selling, and you aren't willing to
stand behind your product, your online business will certainly
fail. You should never sell a product that you aren't
enthusiastic about, or else you should be able to fake your enthusiasm
better than a Hollywood actor. Either way, you must pass on
the positive energy about your product to the consumer. This applies
not only on eBay but throughout "marketing land" in general, both
online and offline.
It is true that some things sell better than others. Information and
software are particularly hot sellers because almost all computer users
are pre-qualified for those products. In other words, the
fact that they are using a computer means they need software, and the
fact that they are using the Information Superhighway means they are
already looking for information! Another example is this
manual itself, which is designed specifically for a huge pre-qualified
niche market on eBay. The fact that you are an eBay seller
meant that you were instantly interested in improving your trade by
learning the information contained in this booklet! Selling
to a pre-qualified market can be very profitable, but you must be
enthusiastic about what you're selling or it will surely
fail. Once again, YOU SHOULD ONLY SELL A PRODUCT THAT YOU ARE
EXCITED ABOUT. That is the absolute best advice I can give
you with regards to online marketing in general!
Finding
your Niche Market
Once
you have a product in mind, you need to pinpoint your niche
market. This is very easy to do. Brainstorm a list of
interests, hobbies, topics, subjects, and ideas that are similar or
related to your product. For example, if you sell knives (as I do) then
you would consider the following interests/hobbies relevant to your
product: camping, hiking, hunting, fishing, boating, knife collecting,
diving, martial arts, sporting goods, kitchenware, cutlery, tools,
collectible hand tools, knife making, etc. The eBay users who
visit such categories on the auction site make up your niche market!
Once
you know where your customers go, you need to KNOW YOUR
CUSTOMERS. Brainstorm a list of their interests, hobbies,
likes and dislikes, age range, income potential, likely vocation,
marital status, etc. Devise a complete dossier on your
potential customers in that niche market. The reason for this will
become clear later as you learn to write an effective sales
pitch. The sales pitch aims at attracting a certain profile
of eBay user and is the most profitable tool you can use to increase
the percentage sales of your products.
Choosing
a Category or Categories
Ok,
you have put a lot of thought into your product and completed the
introspective phase of getting started. You're excited about
your merchandise and you're ready to start selling it on eBay
auctions. The next step is to find your niche market; as
applies to online auctions, this refers to the category you will list
your item(s) in. Considering eBay has over 1000 categories to
choose from, this should be a relatively easy process. But there is one
important trick you strategy to know.
Before
listing your item in any category, follow these simple steps:
First, browse through ALL eBay categories and write down which ones you
feel are relevant to your product. You should be able to find
at least 5-10 possible choices. Next, write down the number
of auctions currently online in each of those categories (the number of
auctions online will appear next to the category name). An
average in any category is about 1000, so if there are more than 1000
you may conclude that the category is active and if there are less than
1000 you may consider it inactive. I consider categories with
over 3000 auctions to be popular and those with over 10000 are most
popular. Using this ranking system, rate the categories that
you have chosen for your product. I recommend listing in
active or above categories only because they get the most traffic - if
you put your product in an inactive section of eBay, you may get little
or no bids, even if you feature it. Avoid categories with
less than 1000 auctions online!
Keeping
Track of Your Auctions
Once
you have more than 5-10 auction listings online, you will need to
develop an effective system for keeping track of them all.
Simply listing the items and sending a confirmation email to the
winners is not enough. For example, if a customer purchases
one of your products and asks whether you received payment yet or not,
you need to track down the item number and see if you have received his
check. Other customers may want to know when the item was
shipped or have other questions pertaining to auctions they won in the
past.
The
easiest way to keep track of your auctions is to use software to track
them. If you list less than 5-10 auctions at a time, you can
probably keep track of them with the old pen-and-paper method, or with
a simple spreadsheet. If you choose this method, follow these
steps for keeping track of the auctions: use a separate sheet of paper
for each auction you list. Write down the item number, URL, listing
date, listing price, and category, along with any other comments or
pertinent information. When the auction ends, write down the
ending date, the sell price (if any) and the buyer's contact
information. Index the auctions by auction number for quick reference
in a file. Again, this method works ok for fewer than 10
auctions online each week. If you have more than that, you
must use a database system of some kind. Selling the
merchandise is only half the battle - you MUST keep track of your sales
or you will quickly find yourself lost and confused.
Particularly on April 15th!
A
Picture is Worth a Thousand Words
An
essential aspect of every eBay auction in which a physical product is
sold (excluding services, information, or software) is an image
file! Hardly anyone is willing to buy what they can't
see. If your competitor shows off an impressive picture of
his product and you don't, then you lose business. It's just that
simple. To attach a picture to your eBay auctions is not that difficult
and is the subject of a completely different manual, but the basics you
will need are a digital camera and a way to host your picture such as
an internet website or a special image hosting company. eBay has
extensive help files on how to attach a picture to your
auction. The picture should be used to highlight the best
aspects of your product - make sure that the lighting and the setup is
correct and that you take the time to take a top-quality, gripping
picture. When browsing through auctions, often the image is
the first thing to attract potential customers, so the more effort you
put into taking an outstanding digital picture the more profitable your
business will be. In fact, if you are selling a physical
product, I cannot in good conscience recommend listing it on eBay until
you have a quality picture to attach to your auction. The picture sells
- remember that!
Your
Strategy
The
key to making enormous profits on eBay is to develop a detailed and
efficient strategy long before you list your first item.
First you need to know what type of product you want to sell, where to
find your niche market on eBay, and develop a profile of your average
customer. In addition, you should already have determined
which categories are appropriate for your product. Now you are ready to
set your strategy for the business. Read this part of the manual very,
very carefully.
I'm
going to present you with a strategy that you can apply to virtually
any product you wish to sell on eBay. I will generalize the
outline so you can fill in the specifics related to your own particular
niche market and merchandise.
There
are two types of sellers on eBay which I will call High Volume Listers
and Low Volume Listers. High Volume Listers are those who
list more keep more than 10 auctions online at a time. Low
Volume Listers keep fewer than 10 auctions online at a time.
The
profit margin of the product you sell determines which category you
will fit into. For example, if you sell real estate and make
$10,000 per sale, you may only need to list a few properties each week
on eBay to make a real killing with your internet business.
The same applies for the sale of expensive jewelry, automobiles, and
other items with a large profit margin. However, if you sell
magazines or other inexpensive items you may only make $5-10 per
sale. In this case, you would need to list hundreds of items
at a time to make large profits, and thus you would become a High
Volume Listing. I know what you're thinking - why would
anyone go through the effort of listing so many items when it seems so
easy to list a few large items and make a fortune? The answer cuts to
the heart of internet sales itself: ONLINE BUYERS ARE MOST WILLING TO
SPEND UNDER $50.00 FOR A PRODUCT. This makes sense - would you pay
thousands for something you have never seen? Another reason
that High Volume Listers are more common and often make more money on
eBay is that it is very easy to buy inexpensive items at wholesale
prices, but very difficult to buy real estate or automobiles at
wholesale prices.
Armed
with this information, you must consider the product you're selling and
make an intelligent, informed decision on whether to become a High
Volume or a Low Volume Seller. If you have plenty of free
time to devote to your new business, I recommend you opt for the High
Volume option. But if you are an eBay seller at nights and on weekends,
you may wish to start off with the Low Volume option until your
business really takes off. Again, only you know best which option to
choose based on the amount of time you have available and the profit
margin of your merchandise.
Once
you determine what type of seller you will be, you are half-way to
developing a sales strategy on eBay. The next step is to
integrate everything you have learned so far in this manual and project
your selling strategy into the future. For example, let's
assume you have decided to sell jewelry on eBay. Here is a
test case for consideration: You have identified your niche
market and found the associated categories. You know that
your buyers will probably spend $50.00-100.00 per purchase and you
realize that the average profit of your auctions will be about
$60.00. You have plenty of time and your profit margin is
low, so you decide to become a High Volume Seller on eBay and choose to
list 100-200 auctions per week. You estimate that 70% of your
auction will end with winning bids, which is the eBay
average. Based on this prediction, you calculate your weekly
income at $6300. Using database software, you plan to keep
track of your auctions and use the built-in market analysis feature to
discontinue unpopular items and relist the popular ones. You
have a wholesale account set up with your jewelry supplier and have
already purchased enough inventory to cover your first week of eBay
sales. You plan to relist every auction as soon as it ends
and place one weekly order to fill your inventory along with one weekly
outgoing mailing to your buyers. Your basic sales strategy is
set and you are ready to begin listing your auctions!
In
the example above, you will notice that the seller thought of
EVERYTHING before listing a single item, making sure that he/she was
prepared for the task ahead and establishing a solid game
plan. Before beginning, you should project your sales
strategy into the future and run through all possible problems,
resolving them in your mind. If it helps, write out a
paragraph like the one above and analyze it for errors of
logic. KNOW YOUR SALES STRATEGY BEFORE YOU BEGIN.
I
strongly recommend listing all of your auctions as regular auctions
before you begin. Do not feature them or use the Dutch Auction option
at this time. Test out your sales strategy and evaluate the
popularity of your product in its niche market for several weeks before
continuing. The rest of this manual contains advanced tips
designed for sellers who have mastered the concepts already set forth
and who have performed a basic market analysis of their products based
on the results of several weeks of auctions.
Advanced
Selling on eBay - To Feature or not to Feature
Featured
auctions get more bids. They also cost more - a lot
more. Before deciding whether or not to feature your item,
you need to evaluate its popularity. You should perform a
basic market analysis either on your own or using database software.
There
are two types of featured auctions - those which are featured in
category cost $14.95 and show up at the top of the item's category main
page. This ensures that anyone who visits that category will probably
see your auction, as the normal browser scrolls down a few screens and
then leaves. I recommend featuring your item in its category
if it has an average sales percentage of 50% or greater. In other
words, after running regular auctions for a few weeks, you should
choose the "featured in category" option if more than half of the
auctions for that item have ended in a sale. I also HIGHLY
SUGGEST choosing the boldface title option whenever you feature one of
your items, as it draws more attention to your product.
A
regular featured auction costs $99.99 and generates even more bids than
a featured in category. Of course, it also costs a lot more,
and as such you should only choose this option if you your item(s) has
a sales percentage of 60% or greater. By featuring many
popular auctions, you will make enormous profits on eBay. But
the key to success is running those tiresome regular auctions for weeks
to figure out which items to feature and which items to discontinue.
Trial and error works!
NOTE:
eBay will not let you feature auctions selling information, services,
or adult material due to complaints from users. If you sell
that type of product, you should run a featured in category auction
only.
Dutch
Auctions - Your Key to Making Millions!
If
you're a Low Volume Seller, you need to run multiple Dutch auctions to
really make a killing on eBay. Consider this example; you
sell designer watches on eBay for $150.00 each and you have 200
different types of watches. Therefore, you decide to run 200
separate featured in category auctions in the Jewelry and Jewelry
> Watches categories.
If
you don't make use of the Dutch option and list only one watch at a
time, then your maximum potential for sales each week is 200
watches. If your profit margin is $75.00 and your average
percentage sales equals 60%, then you're weekly income is
$9,000. Not bad, but not $100,000 per month either!
Now
let's modify that example. Instead of listing 200 auctions of
one watch at a time, you should instead list 200 dutch auctions selling
100 watches at a time for each style of watch you carry. You
would still have 200 auctions online each week, but your sales
potential jumps from 200 to TWENTY THOUSAND (200 auctions x 100 dutch
watches in each auction = 20,000). Obviously, you won't sell
20,000 watches each week. If your product is popular, you
might sell 5-10 watches on average from each dutch auction you
feature. Now let's recalculate your weekly income after
running the Dutch auctions:
10
watches x 200 auctions x profit margin $75.00 = $150,000. A
little better than $9,000, isn't it? To be on the safe side,
let's allow for a FIFTY PERCENT MARGIN OF ERROR in our
calculations. Perhaps you only sell 5 watches per auction, or
you only make $37.50 per watch, or you only list 100 instead of 200
different types of products.
You
would still make $75,000 per week! Even if we allowed for
ANOTHER fifty percent margin of error on the second calculation, you'd
make $37,500 per week!
As
you can see, Dutch auctions are the key to success on eBay. When you
combine the dutch option with the featured or category-featured option,
then you're playing a winning game. High Volume Sellers need
not worry about Dutch Auctions in general, but Low Volume Sellers (the
most common and often the wealthiest) must use this option to rake in
the profits!
Market
Analysis
Market
analysis is very important to determine what sells and what
doesn't. When you're paying eBay $100 listing fees for
featured auctions or $15.00 listing fees for category featured dutch
auctions, you need to continually evaluate the profit potential, profit
margin, and sales percentage of your products as relates to the length
of auction, type of auction (featured, featured in category, bold face
title, etc), description & sales pitch, price, and a number of
other factors. I'm not going to provide you with a complete
plan for performing a market analysis because this isn't an economic
manual, but I will give you a few tips. The best way to
perform market analysis on your products is to use a spread sheet which
automatically calculates your best-selling items and recommends which
items you should discontinue and which items you should feature.
In
particular, you should evaluate the following points FOR EACH OF YOUR
PRODUCTS:
Sales
percentage (number of listings for a certain item / number of sales)
Profit margin (average profit of the item)
Profit potential (largest profit from the sale of the item)
Category sales percentage (sales percentage for a certain item listed
in different categories. Which category does it sell best in?)
Featured
auction profit margin vs. category featured profit margin (does your
profit margin from featured auctions for a certain item exceed your
profit margin for category featured auctions? If so, you should feature
the item. If not, you should only category feature it)
Performing
a market analysis is one of the most important ways to maximize your
net revenue once you have listed enough auctions to collate plenty of
raw data.
Trial
& Error - It Works
As I
have indicated, trial and error is one major tool for success. It
works, pure and simple. Don't be afraid to try out new ideas
or to feature dozens of your most popular products. Find out
what sells and what doesn't - continually order new products from your
supplier that you feel will become big hits on eBay. Do not
get into a rut selling the same thing over and over again; you will
saturate the market after a few months. The most important
use for trial and error on eBay is to use the regular auctions as a
testing ground for your new merchandise to determine its sales
percentage and corresponding marketability, as well as its profit
margin. You can then make an educated decision as to whether
or not to feature the auction or choose the dutch option, or
both. Impulse selling is much like impulse buying - you
regret it soon afterwards. Don't use the fancy options on
eBay until you first use trial and error on all of your products.
Writing
Your Sales Pitch
Successful
sellers on eBay know how to write an item description (sales pitch)
that instantly perks the browser's interest and then draws them in
after a few sentences. The first part of your eBay sales pitch is the
title, which should be catchy and immediately focus a potential
customer on your auction. If you get them to click on your auction,
then you have won half the battle. I recommend bold-face
titles at all times using catch words such as "HOT ITEM", "WOW!",
"RARE", "UNIQUE", "SUPER DEAL", "UNBELIEVABLE!", "BEST VALUE",
etc. I also suggest using all caps so that your title stands
out above the rest. DO NOT use fancy symbols or other
"cheesy" ways to attract attention to your auction. Such tactics
immediately turn off most potential customers and make your business
look unprofessional and even ridiculous.
A big
part of your sales pitch is the picture that you attach to your
auction, but you must also provide an enthusiastic and energizing
description that makes your potential buyer feel like he NEEDS your
product. Before you start writing the sales pitch, refer to
the profile of potential customers in your niche market that you should
already have compiled. What are their likes and dislikes? What are they
looking for? How old are they and what jobs do they generally hold?
What are their hobbies and interests? What makes them tick? A
successful sales pitch appeals to the base interests and self-interest
of the customer. When writing a sales pitch, attention to
psychology counts more than attention to writing style. You need to
make your item description APPEAL TO THE TYPE OF CUSTOMER WHO WILL BE
VIEWING YOUR AUCTION. I recommend using some basic HTML
coding to enhance the description, but I do NOT suggest giant letters
and distracting objects such as blinking, animations, or more "cheesy"
items in that regard.
Your
potential buyer wants to know what your product will do for him, and
does not need a lot of useless distraction. Again, your item
description must appeal to the profile of the buyer and promote a
feeling of professionalism and trust in your company.
Complementing
Your Auctions With a Website
An
internet website equipped with E-Commerce (the ability to accept credit
cards) greatly enhances your eBay auctions. It is relatively
easy to learn how to set up a basic website and E-Commerce can be
purchased for as little as $50.00 per month. This is
absolutely essential for eBay sellers because it gives you the ability
to accept credit cards not only on your website but as payment for your
eBay auctions! I have known vendors who tripled and even
quadrupled their profits on eBay simply by accepting Visa / Mastercard.
You can set up a merchant E-Commerce account by accessing the following
URL:
http://www.quickcommerce.net and then following the instructions and
filling out an application.
After
setting up a website with your products, you can use eBay as a free
advertising tool for the new webpage! I receive hundreds of
hits each day just by featuring a few of my auctions. I make
a profit on the auctions but I also make a residual profit when eBay
customers visit my website. I STRONGLY RECOMMEND paying a
professional banner creation company to create a catchy banner for your
site and then linking it to all your eBay auctions. This
creates a two-fold benefit; eBay users who see your banner may click on
it to visit your site, and they will also consider you to be a more
professional and established seller than much of your competition
because you spent the time and money to create a high-class
banner. Combined with your feedback rating, this gives you an
edge over the competition - and the slightest edge can literally
translate to MILLIONS OF DOLLARS EACH YEAR! I suggest
Buy-A-Banner for banner creation: http://www.buyabanner.com.
You can create one for under $100 and the return will be well worth it.
Feedback - It Matters
I've
heard some eBay users remark that feedback isn't all that important,
that no one reads that stuff in the first place. Quite the
contrary. While newbies and eBay novices will often overlook
the feedback for lack of understanding and inexperience, almost ALL
veteran buyers will view your feedback before buying your product. If
they see comments such as "product not delivered", "this guy is a
fraud", "terrible seller, would not trade with again" then
they will never purchase your merchandise. You need to have
an outstanding feedback rating brimming with positive comments to
really make huge profits on eBay.
Also, you need a feedback rating of 10 or more to list dutch auctions
or to feature an auction. The way to ensure quality feedback
is simply to deliver a quality product quickly, efficiently, and
honestly. If you are looking for a "quick fix" or a "hit and run"
scheme then eBay is not the place for you. You can build a
hugely profitable and legitimate online business using internet
auctions without defrauding anyone!
There
will always be a few rogue customers who claim they never received
their product or you were too slow to deliver it, or else were unhappy
with what they received. We all know that the customer is NOT
always right. My recommendation for dealing with such problem buyers is
simply to offer a 30-day no-questions-asked refund on any physical
product that you are selling (services, information, and software
excluded for obvious reasons). If they persist in causing
problems, just ignore them. One or two negative feedbacks won't destroy
you - 10 or 20 will.
Customer
Service Recommendations
Always
answer a customer's email. Whether the customer is praising
your product or complaining, whether he is offering his input or asking
a question, he or she deserves an answer. Particularly on
eBay, where feedback really counts! If you fail to answer
emails, you may receive such comments as "unresponsive seller" or
"ignored my repeated inquiries" in your feedback file. You
will also earn yourself a poor reputation and lose respect in the
online trading community. My recommendation: Keep your answers short,
courteous, and to the point. Provide all relevant information
and be friendly, but don't get bogged down in long email conversations
back and forth, and don't let the customer lead you on an irrelevant
tangent. Your time is money. Also, you should create a classy
signature file that inspires confidence in you as a seller and looks
professional. Finally, I strongly recommend creating a folder
in your email program entitled "pre-written messages" in which you have
template messages already created to answer common questions such as:
1) When has my item been shipped? 2) When did you receive payment? 3)
How long does shipping take? Etc, etc. Customize your
pre-written messages to fit your particular product, as you will notice
very similar questions and comments from customers as time
passes. It is MUCH EASIER to send out a pre-written form
email than write a specific answer to each inquiry. However,
make sure that it doesn't sound like you are using a form email and
make sure to add a personal touch when possible. When considering email
customer service, you must balance time, efficiency, and courteousness
to maximize your working potential.
eBay
Secret Tips-n-Tricks!
- You
can relist auctions that have sold! Go to the URL for the
ended auction and click on "relist". eBay allows you to
relist the item even though it sold, saving you time and effort so that
you don't have to copy and paste the title and item description into
the form again. This is particularly useful for High Volume
Sellers.
- Use
eBay as a vehicle for advertising your products and websites!
You can create a banner and link that banner to all of your auctions,
gaining thousands of impressions of exposure for your website or
products each day.
- Use
eBay's bulk uploading tool if you run more than 10 auctions at a
time. With "Mister Lister", you can upload hundreds of
auctions at once, saving you much time and effort. Click on
the eBay help files to see how it works and to download the software.
- Dutch
Featured Auctions are your key to success! The way to maximize your
profits on eBay is to determine your hottest selling items through a
market analysis tool and then list then as Dutch Featured
auctions. Using this secret technique, you can make as much
as $100,000 per month on eBay, or more!
- Information
is your greatest asset. Read up on online marketing and read
EVERY eBay FAQ and help file. Know everything about your
venue of sale. Your success on eBay, or with online marketing
in general, is directly proportional to your level of knowledge and
experience.
- Don't
be afraid to try new things on eBay! List new products, try
out new categories, and use the proven methods of Trial & Error
to find out what works and what doesn't. DO NOT fall into a
rut and remain content with a solid income of $1000 - $5000 per
week. The profit potential on eBay is tremendous - make it
work for you.
- Offer
quick shipping! Your customers want their merchandise quickly
and efficiently. Charge reasonable shipping rates and send their items
priority mail when possible. Make each customer feel that his
order is important to you - because IT IS. This will be your
key to positive feedback and satisfied customers. Happy
buyers come back for seconds.
- Set
up an E-Commerce account. You need to be able to take credit
cards and online checks to be a successful eBay seller. Many
customers will only pay by credit card and will choose another vendor
if you don't offer them that opportunity.
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