I'm Listing Stuff on eBay, but I Need to Sell a Lot More to Make a Living
- Growing an eBay Selling Business
- Q: "I'm listing stuff on eBay and I'm making money, but the returns so far aren't exactly spectacular. What are some of the things I can do to grow this business?"
- Why Stuff Doesn't Sell on eBay
- Q: "I've put a lot of things up for sale on eBay, and only a few have actually sold to buyers. What am I doing wrong?"
Growing an eBay Selling Business
Q: "I'm listing stuff on eBay and I'm making money, but the returns so far aren't exactly spectacular. What are some of the things I can do to grow this business?"
A: By "growing your business," what you mean is increasing your profit margins. There are three, and only three, ways you can do that. You can:
1. Raise your revenue (your gross merchandise sales on eBay).
2. Lower your costs.
3. Do some combination of the first two approaches.
If your goal is to increase revenue, there are three ways, and only three ways, you can do that. You can:
1. Raise your prices.
2. Sell more inventory on eBay.
3. Sell higher-margin stuff that will yield more revenue for the same cost.
If your goal is to cut costs, well, there are lots of ways you can do that, but be careful—cut your costs too far, and your product and service quality suffer. Whenever I talk to entrepreneurs about strategies for growing their businesses,
I always refer to the three "ATEs"—so called because each of the three keywords ends with the letters "ate"—as follows:
1. Automate your business: Stop listing things one at a time and invest in some bulk listing programs such as eBay's Turbo Lister 2; use templates for your eBay listings so you don't have to create new ones from scratch every time you list something new; use KeepMore.net (a Web-based solution offered by Sagefire, Inc., of Boulder, Colorado, discussed in Chapter 17) or the eBay software tools Selling Manager Pro or Blackthorne, to automate your back-office functions so you're not wasting time printing out eBay sales reports and transferring them by hand to your accounting software; use technology that will automatically update your eBay blogs, eBay Store content pages, and other marketing vehicles whenever you write a new article or create new content.
2. Delegate: Hire employees, student interns, or independent contractors (also known as "1099s," and discussed in Chapter 20) to do the grunt work of listing items, packing boxes, dealing with shippers, and responding to buyer e-mails, so you can focus on the activities that are essential to an eBay seller's success—sourcing the right product, finding the right niches, and marketing your eBay presence effectively. Hire a consultant to optimize all your listings and eBay Store pages for search engines so you don't have to do this yourself. Get a good lawyer and have him or her review and negotiate your contracts for you so you don't have to become a legal expert as well as an eBay expert.
3. Concentrate: Stop offering goods in too many diverse categories and focus on a handful of manageable niches where (a) you can source quality product easily, (b) there's sufficient buyer demand to keep you selling all year around, (c) there's a high sell-through rate (the ratio of successful listings to total listings), and (d) you get a decent profit margin on each sale.
Ideally, you will find yourself in an environment where your revenue is consistently growing and your costs are gradually diminishing—that's growth in accounting terms, and if you can sustain that over the long term you can't really do much better in business.
Why Stuff Doesn't Sell on eBay
Q: "I've put a lot of things up for sale on eBay, and only a few have actually sold to buyers. What am I doing wrong?"
A: There are lots of reasons this could be happening. For example:
1 . Your items might not be listed in the best categories on eBay.
2. Your items are listed solely on eBay's U.S. site when the market for them is primarily overseas.
3. Your items are so unusual that the market for them isn't all that big.
4. There are lots of competitors for the same or similar items, and because they are buying in larger quantities than you possibly can, they're getting better discounts from their suppliers and, accordingly, can offer lower prices to their customers than you can.
5. You are selling antiques and collectibles and each item is unique, so you have difficulty getting multiple sales from the same buyer.
6. You are selling high-priced antiques, but your feedback score is less than 10, so buyers are nervous about buying from you.
7. Your listing photos are fuzzy or raise more questions about the item than they answer.
8. You are listing your items at the wrong time of year (ski parkas in August, swimwear in January), or your listings are closing on the a day of the week that eBay's statistics indicate is not a good day for items of this type.
9. You are pricing your items incorrectly—for example, using an initial bid price so high that you're scaring buyers away.
10. Your Terms and Conditions are so tough and one-sided that they are turning buyers off.
11 . Your eBay Store is not optimized properly to generate search engine traffic.
12. Your customer service isn't all it could possibly be—for example, you are too slow to respond to buyer e-mails.
The only way to know for sure what's going wrong is to do research. There is no substitute for reviewing other people's closed listings on eBay and taking detailed notes on what worked and what didn't work for those listings. Yes, it takes time, but it pays huge dividends. The two leading eBay auction research services are HammerTap.com and Terapeak.com. Make a deductible investment, subscribe to both of them, and start figuring out what works and what doesn't for the type of merchandise you're selling on eBay.
If all else fails, it's just possible that eBay isn't the right place to sell the type of items you have in stock. That leaves you with a choice: Either you can change your business model to sell more stuff that's saleable on eBay or you can sell elsewhere on the Internet, where your merchandise is more likely to fit. For an excellent book comparing eBay to other online retail venues, see Selling Beyond EBay: Foolproof Ways to Reach More Customers and Make Big Money on Rival Online Marketplaces, by Greg Holden (AMACOM, 2006).