Simple Steps for Starting an eBay Biz
Ted Corriher, a home, garden and farm equipment dealer in Newton, North Carolina, didn't know much about computers or the internet four years ago. He didn't even have a personal e-mail account. "I am computer illiterate," he says. "But all my friends were buying on eBay, and I didn't want to miss [out]." So he asked one of his employees to find out how he could sell his equipment on eBay. That was three years ago. Today, he sells about $100,000 worth of equipment on eBay every month, and his predominantly tractor-sales business has grown from $4 million to $10 million in annual sales.
It's almost hard to believe this $3.27 billion online marketplace with a record 404 million listings as of the end of 2004 was Corriher's initial foray onto the internet. The opportunity to expand beyond a 300-mile radius from the doorstep of Corriher Implement Co., which his grandfather started in the 1850s, is part of what persuaded this 40-year-old to join a whopping 147 million registered users on eBay. Operating under the User ID tractor123, Corriher says eBay has been a rewarding and enlightening business expansion, much like the era when his grandfather abandoned the sale of mules in favor of farm equipment.
"As soon as I got involved [in eBay], it opened up a whole new world for me," says Corriher. His new and used New Holland tractors sell for upwards of $10,000 apiece to buyers all across the United States.
Corriher is a PowerSeller, an official designation bestowed by eBay upon those sellers who have reached a certain sales performance and have a high level of total feedback, with at least a 98 percent positive rating by other eBay users. It's not impossible for the startup seller to reach this level of achievement in as short a time as Corriher, if not shorter. Here are success tactics from eBay experts and PowerSellers that just might help you succeed alongside one of the 724,000 people in the U.S. currently making either a full-time or part-time living selling wares on eBay.
While Corriher's tractor business took off on eBay, most sellers don't start out with such high-ticket items. Whatever you decide to sell, setting up shop on eBay is fairly easy to do. There are virtually no startup costs, you can work from home with almost no overhead, and your marketing can all be done online, right within eBay. An internet connection is all you need, aside from the most important requirement: inventory. At any given time, there are approximately 50 million items available on eBay worldwide, with 5 million new items added each day. To compete, you must have an item to sell, even if it's ad space on your forehead, which Omaha resident Andrew Fischer, 20, sold to highest bidder SnoreStop for $37,375 in January.
Your best chance at success is to start out selling something you are fairly knowledgeable about, say experts, because you're more likely to be on target about the value of what you're selling. If you do not have expertise with your items, don't fret. You can get up to speed fairly quickly by doing research on eBay, says Joseph T. Sinclair, author of eBay Business the Smart Way. Scan eBay's completed listings archives to track how much similar items have recently sold for, he says. Once you know your inventory, you can price it well and move it quickly.
Marsha Pater, 47, started her $120,000 business on eBay seven years ago with a camera and overstock inventory her husband, Bill, 56, had earmarked for the scrap yard from his tool and die business. Many of the items had been sitting in a warehouse for years because Bill cringed at the idea of melting down good-condition, unused items simply because his Midwestern tri-state clients had moved on to other projects that required different tooling.
Originally, the Plainfield, Illinois, couple began on eBay by buying pottery for friends who didn't have a computer. "My husband said if we could do all this buying, we could do the selling," says Marsha. "We didn't have a lot of out-of-pocket expenses, and we started on something we were familiar with."
And expenses were low. Back then, Pater didn't even own a digital camera. She took photos with her 35mm, developed them at Walgreen's, scanned them into the computer and uploaded them into a file. "It was extremely time-consuming," she says. "The pictures would come back and not be any good, and we'd have to start all over again. Our first big purchase was a $500 digital camera." Pater and experts strongly advise sellers to invest in a digital camera. From there, listing with the easy "Sell Your Item" form on eBay can help you manage the images and text.
A Picture's Worth...
Without a photo, or a particularly good one, you may lose the sale before there's even click-through. Pater learned that the hard way. The first photo in your item listing is free, but you must pay for the one that appears on the search results page. This 35-cent option eBay offers is called Gallery and allows you to have a thumbnail photo appear next to your listing title in the search results; larger photos (up to 12) appear for an additional charge when a potential buyer clicks on the listing. Pater, looking to save money, opted not to splurge for Gallery photos of her items. After all, when potential buyers clicked on the listing titles, they would see her listed photos. But through a web hit counter on her site, Pater soon discovered that Pater Industrial Tool Supply was not getting many hits on its listings because it lacked the initial photo on the search results page. However, once she uploaded a photo next to the titles, demand improved, and today Pater sells an average of 250 items a week from the 3,300-square-foot home she bought with profits from her business on eBay.
Quality and up-close photographs are important to making a sale, says Jim "Griff" Griffith, dean of eBay Education. "People expect to see something visually. You can't even sell software without showing a picture of the box or the CD," he says. "People need to know they are buying something tangible."
One Step at a TimePricing Pointers
Once they get a look at your product, potential buyers want to know about price. It only takes two bidders to drive up the price of an item you list, but if you price that item too high, the buyers may never come. So what starting price do you set?
Experts agree $1 works most of the time. "People like looking for a good deal, and they can't get much better than $1 for an item worth $500 [even if they do end up paying $500]," says Corriher. Plus, the lower you set the price, the more people are likely to bid and become emotionally attached to the item, wanting to bid more frequently because they promised their wife that pair of diamond earrings. (For more on pricing see "How to Inspire Bidding Frenzies".)
How long you should list an item depends on a variety of factors. You may list an item for one, three, five, seven or 10 days, though sellers must meet certain qualifications to use one-day listings, and 10-day listings are subject to fees. Consider your buyers: Listing an item longer allows more time for buyers to watch your item and place bids. Your selling volume is also a factor. For example, if you're a high-volume seller and are listing several identical items, choosing the one-day option allows you to offer more listings for those items. Also, if the item you're selling relates to an event, such as a concert or a holiday, be sure the listing ends with enough time to ship the item to the buyer.
Check Out the Hit List
What if you have plenty of great photos and a good starting price, but you feel like you're still not receiving the hits you should? Find out just how many visitors you're getting, and you can start to solve the problem. To do so, add a hit counter to your page when you are setting up a listing. Knowing how many visitors you receive compared to the number of bids you receive will tell you how successful your listing is. Getting 10,000 onlookers a day but no bids? Perhaps your title copy is great, but your description or pricing is off. Or maybe you placed your item in the wrong category. Look at your listing in more detail to determine where the problem is.
Scott Hunter, co-owner of consulting firm HowToSellAuctions.com in San Jose, California, discovered just how critical the listing details can be. A client through his previous employer wanted to sell a 6-inch change plate from the Titanic that he'd inherited from his aunt. Hunter listed the item on behalf of his client and expected it to generate thousands of hits. And it did. In the first three days, he noticed tens of thousands of visitors had taken a peek into the item listing, but no bids had been placed. Hunter determined something must be off with the description, so he revamped the listing copy. Instead of simply describing the plate as coming from the Titanic, he told the story behind it: A woman on the ship took the plate upon check-in, long before the ship hit the iceberg. Because women and children were loaded onto the safety boats first, she survived, bringing the plate, hidden in her coat, with her. The Czech Republic manufacturers of the plate verified its authenticity. A bidding frenzy ensued. By the time the auction ended, the plate had sold for $10,000 to the owners of the internet casino GoldenPalace.com.
When you begin to draw traffic, managing potential buyer inquiries can be time-consuming. To cut down on questions, be as detailed as you can in your listing. It will save you time, especially when the bidding frenzy begins and bidders start to e-mail you questions they may need answered in a two-minute time frame as the end of the listing draws near.
After the high of the listing winds down, it's time to handle payment and shipping. Every seasoned seller will tell you to accept PayPal. The secure online payment system handled $6.2 billion in the first quarter of 2005 and has over 70 million accounts from users in 56 markets. Additionally, 3 out of 4 buyers on eBay prefer paying with PayPal, according to eBay. A primary reason for this is that PayPal keeps buyers' information secure by sending sellers the money without sharing the buyer's financial information. Indeed, a recent survey found that 92 percent of PayPal customers viewed the service as a secure way to pay online, helping overcome mounting concerns among consumers about the safety of their personal information online.
PayPal allows sellers to accept major credit cards and bank account payments with no merchant account or gateway required. Fees are considerably lower than those sellers would otherwise pay through a traditional credit-card arrangement.
In addition, PayPal offers protection programs for both buyers and sellers. Buyers are shielded from merchandise that may be misrepresented or not delivered, while sellers are protected for up to $5,000 from fraudulent transactions and against credit-card chargebacks.
When considering shipping, you'll need to figure out 1) how much to charge customers, and 2) how you will execute the shipment. When deciding on shipping charges, you can offer three different flat-rate amounts or let the buyer use eBay's Shipping Calculator to determine the cost for themselves. The Calculator is a free eBay tool the bidder can use during the listing process to estimate in advance how much they will be charged for shipping. The Calculator works by ZIP code and can also determine international rates.
For shipping average-size packages, eBay supports the U.S. Postal Service and UPS. For items weighing more than 150 pounds, Freight- quote.com can provide solutions.
A rookie seller mistake when shipping smaller items is standing in endless lines at the post office. Invest in a scale, suggests 34-year-old Kim Everitt, CEO of Walk In Auction, an eBay drop-off store in Golden, Colorado. Since buying a scale on eBay for $30, she now weighs her items at her store and prints out most of the labels via PayPal. The pre-printed labels save her time and save her customers money, as metered mail can have a slightly lower rate than stamped first-class. Most important, says Everitt, who averages $25,000 a month in sales, is to be able to send packages on a daily basis, improving your customer service.
Keep 'Em Happy
Happy customers are a large part of securing success on eBay, as is evidenced by the 2.7 billion feedback comments eBay members had left by the end of 2004 regarding their eBay transactions. To maintain a good rating, you must have the attitude that the customer is always right. If there's a mistake, fix it. Corriher explains that if a buyer tells him he missed a problem on a tractor before shipping, he handles it immediately. "I have shipped it back at my expense or sent them the part. I [do] whatever it [takes] to make the customer happy," says Corriher. "I have spent hundreds of dollars fixing things that were maybe not my fault. But hundreds of dollars is a small percentage of the millions I've sold on eBay."
Current eBay PowerSellers have a wealth of information and tips, and they're willing to share their know-how with others. Check out eBay's Community discussion boards to seek answers to some of your concerns. But know everyone is in it together. "We are still learning," says Corriher. "And by learning, you grow."
Sheree R. Curry specializes in
management best practices and is an award-winning business
journalist and former staff reporter at Fortune. She currently
freelances from her suburban Minneapolis home.