Seize the Season
Sometimes it snows in Albuquerque, New Mexico, during the holidays and sometimes it doesn't, but there's one thing Chris Padilla, 31, and Shannon Jacques, 34, can always count on: It'll be the busiest time of year for their business on eBay and their retail drop-off store. "When it comes to holiday selling around here, it's a huge push of people coming in," says Padilla, whose business, E-Sell4Dollars (eBay User ID: e-sell4dollars), has weekly sales of between $6,000 and $9,000.
Padilla also knows that the holidays are a make-or-break time, because that's when push really comes to shove. Every one of the thousand details that come with running a business on eBay becomes more critical than ever, from carrying the right products to making sure orders get to last-minute gift-givers in time. "Shipping is crazy," Padilla says. "If you have 300 to 400 packages going out and you have to have them out in a couple of days, it can be a challenge."
Preparation is the key to surviving and prospering during the holiday madness. "Like anything else, luck favors the well-prepared," says Todd Lutwak, eBay's senior director of seller development. "The more you think about this and the earlier jump that you get, the better off people usually are."
One seller's early start may look like a late start to someone else. Barry A. Goldblatt, owner of Epower2go Inc. (eBay User ID: epower2go) in Plano, Texas, reached PowerSeller status only three months after starting on eBay. Goldblatt, who's been selling online through other channels for years, says January is not too soon to begin preparing for the year-end holidays. In January, conventional retailers liquidate unsold inventory at steeper discounts than at any other time of year. So shortly after New Year's Day he's not just thinking about what he'll sell during the next holiday season, he's actually buying inventory. "The only way you [can] compete is to go to other sellers and retailers and pick up what they're dumping after a big season," says Goldblatt, 59.
For other sellers, clearing the shelves may assume more importance than stocking them. Padilla, for instance, has to clear space in his drop-off location for the flood of items customers bring to him to sell over the holidays. While clearing space is important, it doesn't require starting a year in advance. "Usually, we'll start preparing the store the month before the holidays," he says.
You can decide when to start prepping by coordinating your schedule with the holidays you are serving. "Know the calendar and work backward," Lutwak says. "Know when things like Hanukkah are, and go 15 or 20 days back." That amount of time should give you the opportunity to get your items listed, complete the listings, receive payments and ship the items for delivery before the holiday in question, he says. "During the holiday season, buyers are incredibly sensitive to delivery times," he adds. "So you've got to work from those days backward."
You may want to start working even earlier to make sure all your systems are tuned up for the expected rush. For instance, design holiday listing templates well ahead of time so you'll be able to quickly place items for sale when the time comes. Padilla creates templates featuring holiday-themed décor, such as Christmas lights.
Earlier still, begin building inventory so you won't run out of hot items just when demand peaks. It's important to purchase inventory at an economically feasible price, but you can't buy something just because it's cheap. Before acquiring any inventory, Goldblatt checks eBay listings to see how many other sellers offer the same or similar items. "If you're not careful, you'll buy something that 20 or 30 other people are already selling on eBay," he says. "Then you can only compete on price."
Lutwak suggests paying attention to your own shopping experiences when deciding what to stock for the holidays. Start buying for your gift list as early as you can and take notes when you see shortages of popular products developing. Those items might be good candidates for your own eBay sales. "If you're having trouble finding quantities in October, it's a pretty good indication that come the holiday season, that stuff might be even more scarce," Lutwak says.
While looking for mass-produced goods that are inexpensive or in high demand, keep a sharp eye out for products that are always in short supply. "Look for the magic eBay buzzwords--limited edition, exclusive and so on," Lutwak says. When you have something truly rare or even one-of-a-kind, what you paid for it assumes much less importance, and competition from other sellers becomes almost irrelevant.
Good listing practices always carry great relevance, and the holidays are no exception. "The standard listing best practices apply: Write a great item title, use the proper keywords, have a great picture," Lutwak says. "If you're selling multiple quantities, using a listing subtitle is a good idea. And be concise. Give the buyer all the information they need to make a purchase decision without scrolling."
Some other practices come into play at the holidays. As one possibility, Lutwak suggests adding gift-giving recommendations. A listing for a toy, for instance, might describe it as a great gift for both boys and girls ages 5 and under. "During the holiday season, people are shopping for others and not really themselves," he says. "It's really good to say, 'This is a great gift for the man who has everything,' and that sort of thing."
Goldblatt sets up gift-giving categories on his site and tries to write titles for them that sizzle. For example, he picked "Palm Pilot Riot" for a category consisting of items related to Palm Pilot handheld computing devices. He takes time to shoot extra-sharp pictures and packs more of them into his listings than at other times. "You have just a few seconds to get somebody's attention," he says. "If it takes more than a few seconds to find something they want, you've probably lost them."
Descriptions also become more detailed. "If somebody's buying a gift, they want to know everything about it," Goldblatt says. "Was it new in the box? Was it properly stored? We try to answer every question that we can without being so verbose that the customer won't read all of it."
Timing is everything during the holidays--more so than at other times of the year. While most sellers use the conventional seven-day listing, they may leave listings up for fewer days as the gift-giving days get closer to make sure listings will be completed in time for payment and shipping. Alternatively, Padilla says, sellers will use 10-day auction-style listings for special items to give bidders plenty of time to submit their offers. He'll create listings as short as one day for things like tickets for events that are taking place very soon.
Creating effective listings isn't the only move eBay sellers can make to rise above the crowd of sellers that appears during the holidays. Standing out starts with knowing who you want to stand out to, says iRebound owner Pedro Rivarola (eBay User ID: pjcrr1), who sells about $1,500 worth of exercise equipment on eBay each week. "I have a profile of my buyers," says Rivarola, 58. "Most of them come from California, and most are women between [their] late 30s and late 60s. So I need to have that in mind."
Having an accurate customer profile comes in handy when executing strategies that are designed to help you stand out. For instance, offline advertising is a key component of many holiday-season selling plans. Rivarola mails post cards and catalogs to addresses he's collected from past customers and can use the profile data he's created to identify lists of other likely customers.
To encourage people to give him a try, Rivarola offers free goodies such as T-shirts to people placing orders. "I need to give away something," he says. "I need to make them believe that they're [getting] a great deal by buying my product." Don't forget your eBay status when you're looking for a way to stand out with offline ads. Rivarola includes his PowerSeller status, positive feedback rating and Detailed Seller Rating comments on his postcards and other mailers. "They will trust that because eBay is a reputable company, and my feedback is 100 percent positive," he says.
Direct mail isn't the only channel you can or should use to bring buyers to your listings. "We do a lot of advertising through the local paper, and we do advertising online," Padilla says. "We are also all over the Yellow Pages, which has worked out for us. If people are looking in the collectibles and antiques categories there, they'll find a color ad with our name on it."
If shoppers are searching for gifts on eBay, they are often looking for hard-to-find items not available in their local stores or, even more frequently, for affordable prices--depending on the category and specific item. Goldblatt believes good pricing starts with good buying. "I have this idea that there needs to be a 4 to 1 ratio between what an eBay seller could buy something for and successfully sell it vs. what a standard retailer could do," he says. This means that if an item retails for $10, for example, an eBay seller has to get it for no more than $2.50 to be able to reliably sell it for a profit.
The holidays are also a good time to go beyond the auction-style listing format, Lutwak says. That's because shoppers may be in a hurry and therefore uncomfortable with the delay and uncertainty of an auction. These buyers want other shopping formats such as Buy It Now so they can move on to the next item on their shopping list. "I'm not telling people not to sell in the auction format," he says. "But that time of year is a good time to also sell in another [format], such as Fixed Price."
Another way to approach pricing is to use the Best Offer feature on Fixed-Price listings. "It's a great feature on eBay, and we've enhanced it this year," says Lutwak. Best Offer allows you to automatically accept an offer over a specified amount. "Say you have a product you sell for $100," says Lutwak. "You can tell the system, I'll accept any offer over $94. If someone makes an offer of $97, it'll say go."
One time you'll want to go with an auction-style listing is when you have a hot item that's sure to draw attention from many motivated bidders. However, take care not to set the bid floor too high. "People on eBay don't like auctions that start off too high," says Padilla, who urges his clients to set bid prices at no more than $9.99 for almost everything.
Your customers won't like everything they buy, of course, and sometimes they'll want to return items. When that happens, most sellers who have a perfect feedback rating have a no-questions-asked policy. "If they don't get it or it gets there broken, we don't argue," says Goldblatt. Instead, they apologize and offer to replace the item at no cost--including shipping--or they immediately issue a credit. "We try to make it as simple as possible," he says. "There's probably no way to maintain 100 percent positive feedback ratings as we get bigger, but our goal is to do that for as long as possible."
Clearly, Padilla offers great customer service: He has sustained perfect feedback ratings on more than 5,000 transactions. He also does not change his policies during the holidays. "We always try and keep firm on our return policies," he says. "We say everything is sold as-is. However, if we ever get a buyer who has a concern or is not satisfied, we always try to offer other options. We'll get them to send it back and we'll replace it if it's something we have more than one of. We really try to work with them."
Shipping for Success
Working with customers during the holidays means making sure they get their purchases in time to give as gifts on the appropriate day. For this, Goldblatt emphasizes shipping items as soon as possible. "Typically, if someone orders in the morning, it ships that afternoon," he says. "If it's ordered in the afternoon, it ships the next day. We ship Priority Mail, which is reasonably fast."
Rivarola offers express shipping as an option during the holidays, but few take advantage of it because of the cost--his trampolinelike rebounders weigh 37 pounds, which means rapid shipping costs a lot. "We can do it, but it will be quite expensive," he says. "And we cannot just give [express shipping] to them for free unless we raise the price."
Speaking of costs, this year shipping is going to cost more across the board than it has in the past, Goldblatt says. He and other eBay sellers have all had to cope with higher prices from their shipping suppliers as fuel costs have climbed. The preferred coping strategy is to pass it on to customers, despite the occasional complaint. "We can't take a hit on shipping," he says. "We have to sell it for what it costs us to ship and pack."
Fortunately, there's one solution to shipping and packing conundrums that doesn't cost a penny: Include clear, honest and detailed shipping information in every listing. That's especially important during the time-strapped holidays, Lutwak says. Padilla likes to use a table or matrix showing the date items need to be purchased by for them to arrive for the holiday. "We push that to make sure buyers know when they have to get their item paid for if they want to have it in time," he says.
Tables and matrices don't work so well when it comes to international shipping. The vagaries of customs procedures in different countries mean shipments can be unexpectedly and unavoidably held up, Padilla says. "With international shipments, it's hard to fully guarantee anything, because it's so dependent on the customs offices."
Despite the reliability issue, Lutwak urges sellers to offer international shipping. New shipping features on eBay make it easier than ever to print labels and obtain discounts from shippers for international deliveries. And depressed U.S. currency valuations make U.S. sellers more competitive than ever to shoppers in other countries, he says. Also, international shoppers already represent a big market. Says Lutwak, "During the last holiday, I had certain electronics sellers tell me that more than 50 percent of the business was international business."
No matter where they come from, shoppers always like to save money on shipping. Padilla leverages that love of discounts by offering reduced shipping on multi-item purchases during the holiday season. "A lot of Stores won't do that because it requires a lot more work," he says. "But we see an increase in sales when we do. If [customers are] looking through your Store and you offer combined shipping, they'll look for something else they can buy so they can save on shipping."
Even offering truly remarkable savings may not help if customer service falls short. And good customer service is largely just a matter of being ready and willing to communicate with customers about what concerns them, says Rivarola. "When you understand the issues of others and you are behind your product whatever happens, you say, 'Call me anytime, and I will solve it, whatever it takes,'" he says. "That's real customer service."
Sometimes during the holiday rush, sellers mistakenly try to take shortcuts on answering questions, especially when they've made extra efforts to write listings that answer almost any conceivable question, Lutwak says. He points out that many holiday shoppers have never done business with you or even on eBay, so when they ask questions, it may not be because they don't know the answer. They sometimes just want to reassure themselves that a responsive individual is behind that listing. "Answering questions quickly is always a really good best practice," Lutwak says. "Often when buyers see you answer a question, you'll see a bid or purchase."
After a purchase, it's a good idea to send out a comprehensive e-mail announcing that the product has shipped, thanking the customer for the purchase and prompt payment, and providing other information such as tracking numbers and expected delivery dates. Rivarola goes even further than that, mailing a handwritten thank-you note to every customer. "It takes a little more time," he says, "but that's the way it should be."
Goldblatt regards the opportunity for this kind of after-sale follow-up as one of the best features of the holidays. Sure, the end of the year is a critical period for all kinds of sellers, not just those on eBay. But most, if not all, sellers hope to be in business for well beyond this holiday season. So Goldblatt aims to take advantage of the extra traffic to drive more than this year's sales.
"It's a time when we get a lot more visitors, and we know that," Goldblatt says. "So we're also using it to build business for succeeding years and get more people to connect to us via the mailing list. That's really where we're headed."Mark Henricks writes on business and technology for leading publications and is author of Not Just a Living.