Everyone else may be getting out their sweaters, but on eBay, holiday time is the hottest season. For many brick-and-mortar retailers, November and December are the make-it-or-break-it months, when the offline world racks up as much as 50 percent of annual sales and an even larger percentage of profits. So it's not surprising that eBay sellers report that the holidays are important to them as well. "We probably do a little more than a third of our business in that period of time," says Jenanne Hassler (eBay User ID: jenanne), who, along with her husband, sells an average of $3,000 worth of video games and video-game books each month on eBay from Waynesville, North Carolina.

Many larger eBay sellers have similar experiences. Jeff Hess, 54, owner of Hess Fine Art in St. Petersburg, Florida, does close to $5 million annually on eBay, selling vintage watches, jewelry, art and antiques. About 25 percent are holiday sales, says Hess (eBay User ID: hessfine), who adds that since he began emphasizing eBay over his brick-and-mortar store several years ago, the holidays have become even more important. "In the past, like most vintage retailers, we didn't have a very active Christmas season," Hess says. "Our season was essentially over by November 15. With the advent of eBay, we found we were more like the standard Christmas holiday retailers, [which see an increase during the holiday season]."

There are a couple of reasons why the holidays are critical for eBay sellers. One is that eBay increases its advertising budget during the holidays, executing a wide array of marketing, advertising and promotional tactics to encourage buying holiday gifts on eBay. Every retailer should take advantage of the significant effort eBay makes to drive traffic to its site during this crucial time of year.

Another reason is that eBay is so mainstream, it can't help but be affected by society as a whole, says Debra Schepp, a writer in Middletown, Maryland, who co-authored eBay PowerSeller Secrets: Insider Tips From eBay's Most Successful Sellers. "It's becoming more and more true as people are more comfortable with shopping on eBay--and devoted to shopping on eBay," Schepp says. "Plus, there are lots of things that make it convenient [for buyers] to shop on eBay, like the fact that you can offer [them] gift-wrapping and direct shipping to recipients. That makes eBay competitive with any online shopping [destination]." The proof, Schepp says, is the fact that the biggest shopping day of the year--the day after Thanksgiving--is the same for both offline retailers and eBay sellers.

Best Sellers
Since making the most of the holiday season is a priority for most businesses on eBay, where do you start? First and foremost, sell what people want to buy. So what are the hottest holiday items on eBay? "It all depends on what you're selling," says Marsha Collier, author of eBay Business All-in-One Desk Reference for Dummies. "That's the magic [of] eBay. People can come and buy just about anything, and people want just about anything."

The holiday hotties on eBay tend to mirror what's hot elsewhere (and often what you can't find elsewhere). As a marketplace of many small sellers rather than one dominated by a few mega-retailers, it's truly a democratic free-for-all, with the decision about what sells ultimately resting in the hands of the buyers. "Since what's for sale on eBay isn't dependent on a big corporation or a bunch of executives deciding what to sell this season, it's a reflection of what's happening [all over] America," Schepp says. "Anything that's popular somewhere else is going to be turning up on eBay."

With that in mind, eBay sellers who want to make the most of the holidays should make it a point to know what's selling well in society at large during the period. When an in-demand item is hard to find offline, buyers turn to eBay. For instance, notes Schepp, when the iPod was scarce in traditional brick-and-mortar channels last year, units were still available on eBay--and selling like hot cakes.

A few recurring themes outline what makes a product hot during the holidays. For instance, Hassler, 37, says higher-end rare books sell better during the holidays than at other times of the year. In other words, if you're selling products like watches during the holidays, think Rolex. Bundled products--items sold together at a special price--are also better sellers during that period, Hassler says: "It's a focus on items that may not sell during the [rest of the] year because you're not going to buy them for yourself, but you're going to put them on your wish list."

One-of-a-kind custom orders also move better during the holidays for Bob Kitchener, owner of Dangerous Threads, a Nashville, Tennessee, eBay retailer of leather goods and craft items (eBay User ID: bobkitchener). "Custom stuff is really good at Christmastime, along with customized things like [guitar] straps and belts with names on them," says Kitchener, 53.

The price tag is likewise a key indicator of what will sell for Hess. "It seems like everything expensive sells better during the holidays," he explains.

To know everything about what sells, you'd have to survey all eBay sellers, or at least a large sample of them. Luckily, you can use a variety of tools that track, analyze and report on the bestselling items instead. The "Hot Categories Report" is an eBay tool for sellers that lists Hot, Very Hot and Super Hot categories each month based on factors including month-over-month bid growth, bids-per-item and conversion rate. To view the report, go to Seller Central, click on "What's Hot," then click "Hot Items by Category." eBay Pulse gives you a sense in real time of what people are looking for. You can also find out what items are hot in a particular category by going to Seller Central, clicking on "Category Tips," and clicking on "In Demand" under any category.

There are also third-party sources for information on what's hot for the holidays. Terapeak Marketing Research licenses eBay transaction data and goes back as far as a year to provide its own "Hot List" reports. Andale is a third-party subscription service that includes detailed research tools, including information on hot-selling products.

Finally, don't neglect to place at least some trust in your own well-honed instincts, advises Jim Migdal, senior category manager for eBay Toys & Hobbies. He's been impressed and occasionally amazed at how eBay retailers seem to intuitively stay ahead of hot-item trends. "Our sellers just have a nose for that stuff," he says. "And they find it and get it on the site."

It's All in the Timing

There is more to making the most of the holidays than having the products everybody wants. Shipping policies and procedures, timing, site design, payment options, sourcing and more all play roles in getting the most from the year-end opportunity. Of them all, timing may be the most vital. Experts and experienced sellers all sing the same tune: Start early.

"You have to start very, very early," stresses Hess. "Online, people tend to shop early, so we start about October 15." Why so soon? Hess explains that his listings generally run 10 days. "If we start October 15, those seemingly early auctions will end October 25, the following ones will end November 3 and so on," he says. "We'll have only six to eight cycles to take full advantage of the Christmas holiday [season]."

Others say October is late. "Theoretically, it starts on Thanksgiving, but there's a lot of planning that starts before then," says Joseph T. Sinclair, author of eBay Business the Smart Way. "If you don't plan, you're going to get caught short. You won't know whether to promote something because you won't know whether you're going to get it in stock. September should be the target [planning] date for the [holiday shopping] season, so everybody's ready to go in November."

Early is the time to line up a trusted source of supply, especially for items you think will be your best movers. "Make sure you have reliable suppliers who are going to deliver when they say they will," stresses Schepp. "What could be worse than trying to put your listings up on December 15 because the product you were promised by November didn't show up [on time]?"

Another key early task is staffing. "This is not a time to scrimp," says Schepp. "You might have to hire people to get your shipments out, and those are things you don't want to be putting in place the first week of December. You want to make sure you have everything ready to go."

You may also want to change your look and feel. "Have your webmaster dress up your pages with a Christmas theme instead of using your normal template for your [item listings]," suggests Sinclair. One specific suggestion is to take advantage of the eBay gift icon. The wrapped-gift logo tells shoppers you can help them check an item off their to-do list by gift-wrapping their purchases and mailing them directly to gift recipients.

Shipshape Shipping
Offering gift-wrapping and delivery to a gift recipient can be a powerful word-of-mouth tool for expanding your marketing, says Barbara Weltman, a small-business consultant and author of The Complete Idiot's Guide to Starting an eBay Business. When the wrapped gifts arrive, recipients will be exposed to your business, Weltman says. "This is an opportunity to reach people who aren't your customers, and perhaps gain new customers."

You may want to offer free shipping on Buy It Now items, says Schepp. "If you offer it strictly for Buy It Now customers, you're giving them a little bonus, and you're also encouraging people who want to get their shopping done and don't want to wait five or six days for your [listing] to end."

Whether you decide to offer free shipping or not, make sure you ship sold items quickly, says Kitchener. "The main thing we do is ship fast, especially at Christmastime," he says. "You get all kinds of people with deadlines." Dangerous Threads ships via the U.S. Postal Service and FedEx Ground, and usually ships items within 24 to 48 hours, which gives most shoppers enough cushion to make sure their items arrive in time for the holidays.

Because of those deadlines, take extra care to clearly explain shipping policies in your listings. Consider how you could simplify your shipping policies to make everything as fast and easy as possible for the hurried gift-purchaser. Says Hassler, "We include a standard shipping rate to the U.S., Canada and other international locations so people aren't slowed down by having to write to us and ask for [the shipping costs]."

When designing holiday listings, make sure your terms include accepting payment through PayPal. Faster payment means faster shipping, which makes it easier for shoppers to make their deadlines.

To make it even more likely that gift-buyers will make their deadlines, you can and should consider refusing to guarantee holiday arrival after a certain date. "People will buy things on the 23rd of December, expecting to have them before Christmas," explains Hassler. "That's been a problem, so we'll quit having [listings] a few days before."

Kitchener stops selling some products much earlier, particularly custom items. "We make some beautiful custom guitar straps," he says, "and we'll cut off the orders for those about three weeks before Christmas because of the shop time required to make the items." Be sure not to promise buyers items you can't deliver.

Hess employs a more complex solution. As the number of days before Christmas shrinks, Hess Fine Art reduces the lengths of its listings. From the usual 10 days, Hess goes to seven-, five-, three- and even one-day listings. The formula is simple: "Count the days to Christmas, subtract the days for shipping, and figure when those auctions will end."

Selling Policies
You should also consider your terms of sale. Start by thinking about adding more Buy It Now items. "Impulse buys are better that way," says Hassler, who does primarily Buy It Now sales during the holidays instead of the auction-style listings that are her usual method. "People don't want to wait a week to get a book that someone else may have on Buy It Now." To increase the speed of the sale, use Buy It Now with immediate payments through PayPal. The transaction is instantaneous and saves you critical time spent waiting for payment.

During the holidays, it may be more important for you to offer PayPal Buyer Credit, which allows your buyers to finance their purchases through GE Money Bank, the financial entity behind PayPal Buyer Credit. "During the rest of the year, it might not be worthwhile for some sellers," says Sinclair. "But during Christmas, when everyone is scrambling for money to buy gifts, they might [offer] it for one month."

When everyone is scrambling, they're more likely to buy the wrong item, one that doesn't fit, or one that just isn't what the recipient had in mind. For that reason, returns tend to go up during and shortly after the holidays. So it's important to keep a relaxed attitude toward customers who, after being relatively easy to please all year, have suddenly turned uncertain, demanding and difficult during the holidays.

"You have to be a little more liberal and a little more giving and caring," as Hess puts it. "You have to be more friendly and more forgiving, because clients are more emotional then in their buying habits."

Holiday Hurdles

Holiday selling isn't, in fact, all about having fun and making a bunch of money. The holidays present special challenges in addition to trickier sourcing and more frequent returns.

For instance, if you gift-wrap and send items directly to the recipients, you won't be protected by the PayPal Seller Protection Policy, because that applies only when items are sent to verified addresses. You'll need to decide how much your customers will appreciate being able to ship wrapped gifts directly to recipients, and balance that against the value of PayPal coverage. "It is very convenient to have items shipped directly to the recipient," says Collier, who adds that you don't have to advertise your gift-wrap policy, but can apply it on a case-by-case basis. "If you get a special request and the person has a good feedback rating and you're comfortable with the situation, you might want to do it," she says. If you do choose to offer gift services, practice your due diligence. It's a great strategy for the holidays that could lead to many more sales.

Another issue: Since every other holiday-savvy eBay seller is going to be tuned in and looking for the next hot product, it's going to be that much harder for you to be first. And if you do happen to find yourself with a garage full of hot-selling items, your holiday-happy rivals may realize it nearly as soon as you do and flood the market with their own similar items. "If you find something is selling really well, you can't be complacent with it," warns Schepp. "Ultimately, it's going to show up on the hot list, and everybody's going to see it. You can easily end up with an overstocked item when the bottom drops out." Use eBay resources such as the "Hot Categories Report" and Completed Items searches to keep tabs on the competition and avoid having too much "me, too" product on hand.

Remember, as eBay has grown into a global, multi-cultural phenomenon, the meaning of the holidays has gotten less clear in terms of the entire audience of buyers on eBay. So while you should certainly try to take advantage of the end-of-the-year gifting binge, it's also important to do it in a way that recognizes cultural differences. Many eBay buyers don't celebrate Christmas, Hanukkah, Kwanzaa or other year-end holidays, or they celebrate differently.

For instance, in Canada, the biggest shopping day of the year is traditionally not the day after Thanksgiving, but the day after Christmas, a holiday known as Boxing Day and celebrated in Australia, Canada, Great Britain and New Zealand. Keep such differences in mind. Advertising only a "holiday sale" instead of a "Christmas sale" will help you remain inclusive. "You need to be selling for everybody," advises Collier, who suggests simply promoting a "sale" in your listing titles and saving the rest of the character count for important keywords.

If there's one overriding and enduring theme to the holidays, it may be that this is when you should keep an open mind, be creative and be willing to do things differently. While it's certainly nice to get some extra sales at the holidays, it can be even better to learn something new that will help sustain your sales throughout the year. "The holidays are a great time to experiment because there's a lot of traffic," says Sinclair. "If you want to experiment with what sells and what doesn't, what sells better on sale and off, you'll get better feedback during the holidays than at other times of year."

What Not To Sell

Experienced eBay sellers say there's not always an obvious reason why some items move better during nonholiday periods, but it does happen. Jeff Hess, owner of Hess Fine Art in St. Petersburg, Florida, says, "It's difficult to sell large diamonds on eBay [during the holiday season]. Not expensive diamond jewelry--[that's] easy to sell. But large solitaires, one carat and up, are difficult."

Likewise, holiday shoppers at Dangerous Threads, based in Nashville, Tennessee, snub the leather-craft supplies that are mainstays the rest of the year. Owner Bob Kitchener thinks he knows why. "It stands to reason," he says. "You don't want to hand somebody a gift of a pile of rivets." Generally, experts say, holiday-unfriendly items can be anything not usually regarded as a gift.

Celebrate All Year Long
Don't assume you've got it made because you nailed Christmas. The final quarter is the biggest for most eBay sellers, but it's not the only important holiday season. For some on eBay, it's not even the most important. "Halloween is a real good one," says online sales expert Debra Schepp. Valentine's Day and Mother's Day herald sales surges for flowers, perfume, candy and jewelry; themed decorations can be hot for Easter and the Fourth of July.

Make a List, Check it Twice...
You'll be in great shape to take advantage of the busy holiday season if you prepare in advance for the rush. This handy checklist will help you prioritize what needs to be done:

  • Get started early, as many consumers start their holiday shopping as early as October.
  • Sign up for PayPal, and offer it on all your listings.
  • Check your eBay preferences, and update your listing and shipping policies if necessary. You can also change your default template to give your pages a "holiday" theme.
  • Find reliable supply sources. Make sure they'll be able to deliver when they say they can.
  • If you sell custom-made items, stock up on bestsellers, and start your listings early.
  • Gather marketplace data via a Completed Listings search or other method.
  • Sell in-demand products to boost sales this holiday season. Check Seller Central for hot items.
  • For a useful merchandising and promotion calendar of important dates, visit http://pages.ebay.com/sellercentral/calendar.html.
  • Check third-party sources for the scoop on what's hot. Terapeak Marketing Research offers its own "Hot List" reports, based on eBay data going back as far as a year. The buzz on upcoming movies can be found at ComingSoon.net and Internet Movie Database. And check out "Hot Stuff" on page 48 for our preview of 2005's top sellers.
  • Assess staffing requirements, and hire temps if necessary.
  • Order ebay/usps co-branded shipping boxes from the U.S. Postal Service.
  • Order wrapping paper and gift enclosure cards. The eBay Shop sells eBay wrapping paper; type "paper" into the search box to find it.
  • Reconfigure your shipping assembly line to accommodate special requests, such as wrapping gifts and shipping directly to gift recipients.
  • Explain shipping prices and policies clearly to buyers. Consider offering free shipping on Buy It Now items.

Save the Dates
Your customers expect their purchases to arrive on time for the holidays, so it's critical you ensure every item ships when you say it will. These guidelines on shipping basics can help you stay on top of deadlines--and keep your customers happy:

  • Make sure last-minute shoppers know your terms and policies. Tell them clearly and in advance if what they're buying won't arrive in time, or if getting it there requires extra shipping fees.
  • Keep in mind that neither FedEx nor UPS delivers on Christmas Day; however, both offer one-day shipping services. An item shipped on December 23 will arrive the next day. The U.S. Postal Service does not deliver normal mail on Christmas Day. However, if an order is shipped using Express Mail, the USPS will attempt delivery on December 25, unless it's a Sunday.
  • Priority Mail from USPS, which usually takes two to three days to deliver, can take up to two weeks in the busy month of December, so plan accordingly. Guaranteed service by your carrier of choice is the best way to go.
  • Different deadlines apply when you're shipping internationally, so check with your carrier in advance for details.

Hot Stuff
Before making your list of products to stock this holiday season, make sure you check out the latest "Hot Categories Report". As you approach the high tide of holiday sales, the reports available here will tell you where both demand and bids for items are growing.

But why stop there? There's a lot more you can do to find out what is likely to sell well for the holidays. For instance, some categories are always in demand. Perennial holiday winners include cameras, cell phones, clothing, collectibles, dolls and bears, electronics, jewelry and watches, sporting goods and, of course, toy and hobby items.

Want to know which items will be especially hot this year? Check the roster of Hollywood films slated for holiday release, suggests Jim Migdal, senior category manager for eBay Toys & Hobbies. "Those always drive sales," he explains.

With that in mind, this December 9, Walt Disney Co. will release The Chronicles of Narnia: The Lion, the Witch and the Wardrobe, based on the perpetually popular children's books by C.S. Lewis. You can find more info on upcoming movies at ComingSoon.net and Internet Movie Database.

You can also find information about the categories you specialize in. The scoop on hot toys, for instance, can be found in forecasts by Toy Wishes. In the spring and fall, this journal's editors list toys they think will be most in demand during the summer and holiday seasons. Another way to find forecasts for what will be hot this holiday season: Type "holiday watch 2005" into an internet search engine, and check out the results.

Sellers of dolls and collectibles can reliably predict increased demand for certain items during the holidays. Prewar Lionel trains, Hot Wheels cars from the 1960s, and bisque dolls from France and Germany are always scarce and in demand at the holidays, explains Migdal.

Climate also plays a role with holiday hot-sellers such as sporting goods and clothing. That's why ski jackets will tend to outsell bathing suits. And when it comes to popular categories such as electronics and jewelry, consider offering more expensive items than you might at other times of the year--shoppers' wallets are open, and they are, after all, in a giving mood.

Finally, keep an eye on current events, and stay alert for one-of-a-kind opportunities. One of these occurred when a manufacturer mistakenly made just 6,000 Polar Express trains. Says Migdal, "They sold out very quickly, and we saw them on eBay for two or three times the list price." For the latest hot sellers by category, go to Seller Central. Click on "Category Tips," then click on "In Demand" under the appropriate category.

Mark Henricks writes on business and technology for leading publications and is author of Not Just a Living.