I have been running a small set of tests by setting up and running to see how online stores can and do work, and also to test random ideas I get, or read, or just stumble on. Below is a list of notes I made from my trial and error.
To quote Nassim Taleb, " Please, don’t drive a school bus blindfolded."
Set specific business goals - know what you want - make a list of actions on how to get there, I meandered a little too much trying to do everything. Remember your core customer and make sure what you have is reaching them..
Best Product to sell?
Ÿ It has a reliable source of continuing supply
Ÿ Minimum of competition
Ÿ High barrier to entry for competitors
Ÿ Large enough to hit your targets or goals
Ÿ Pick a product that has depth and will lead to spin offs. You want to have multiple sales, repeat sales, and the ability to up sell.
The best idea, and the most profitable is to create your own product. If you can find it and sell it, so can someone else, and there is just no serious margin in it. So the best thing is to be in a niche market.
For example, the books that are the best ones to sell are coffee table books, books on movies, art photography, transportation, and sports. I have picked niches I like such as Buddhism, martial arts, and literature, but focus on categories that see, not that you like.
Do product research, do the work and find out about supply and demand, what is the product/ Industry life cycle, and what does the competition offers and at what price.
Do research on EBay by looking at completed listing for your product/ category and then check the selling price. Check what formats sell the best ( auction, fixed), see what freight terms sell the best ( free shipping for example). Go into deep analysis, look for what creates the highest conversion ratio, the average selling price, then subtract what you estimate the cost of the product to the seller was, figure EBay/ PayPal fees, and then you can figure the profit margin.
Buy used book ( average) (.50)
List on EBay (.10)
Shipping cost( based on wt) (2.57)
PayPal fees ( est.) (.30)
Total Cost $4.37
Freight charge ( average) 3.68
Selling Price (average) 3.00
Total Sale $6.68
Estimated sales 50 books per month
Estimated Profit 50 x 2.31 = $115 per month
As you can see used books are a lot of work with low margins, so you will want to find a product that gives a higher return. I do them because I go through many anyway, and they were something inexpensive to test with.
Also on EBay check what is in demand, what is the most searched phrases or words. Ex. Hot Items by category.
Best business advice ever - You make your money when you buy, not when you sell. Wathch what you pay to buy.
Numbers/ Cost to measure, track, and reduce;
Remember high demand equals more bidders so starting at a low price insures more bidders which drives prices higher on auctions. Do the work, make sure you can get by with the average selling price.
Free shipping can act as an incentive with the you can buy it now options. Learn all the different elements of EBay and only use those that are cost effective and that make items sell.
The best promotional tool is the EBay search engine, learn what the keywords for your items are and use them in your listings. Help people find you and your product.
If you decide to open a store in EBay, make sure you submit your storefront to the search engine.
Also remember that you have to know your product market;
Remember that if you can bring buyers in from outside EBay ( web site, twitter) you can save money on the final value fee. The goal is to get as much good traffic to your items for sale as possible.
EBay sellers mainly rely on inventory control modules available with online auction management companies. Ex, Vendio, Channeladvisor, Marketworks, Zoovy
Questions to consider when thinking about selling and inventory;
Break your products into groups A, B, C, and D.
A - most profitable ( may not be the best selling)
B - Greatest Impact on Cash Flow, tightly control as it highly impacts cash flow.
C - Inventory that is carried because customers expect it. Carry only minimum needed,
D - everything else. Sell off - get rid of dead stock.
Group A would be the product group that is the best, should be maximized, and you should try and sell via other channels ( ex. Your own website)
Once you start selling you can try to get discounts from suppliers. Ex. 2% for cash, 1% for payments in 30 days, etc.
Maximize Inventory turnover rates - dead or slow moving inventory is money tied up and stuck.
One solution is to drop ship, but it is tough to do, and you need to solve two problems;
Look online for drop ship aggregators. ( Ex. Thomasregister.com)
You should always be running test auctions to determine;
Use Excel or a spreadsheet program, and check regularly, run experiments, see what is working, and what is not.
Everything that can be tested should be tested.
I record the number of hits, number of watchers, number f bids, final price, and buy it now price among other things.
Run auctions to start and end at the same time ( unless running tests).
If you want to test headlines separate them by a few minutes.
Wholesalers - Find them on line
Do the homework, find out all the information you can at your disposal.
For items to sell, check EBay itself, because everyday products are being undersold on EBay. Search by items ending the soonest and scroll down to those ending after midnight PST. There are programs that can be used called sniping programs. Once you have some possible items, check product and click completed auctions and you can see how they are selling and for what.
You can find unique products to sell via importing, but it takes a good head for business, a lot of patience.
Make sure you know fees ( duties) laws and regulations ( or find an importer that does it for you.)
Keywords in Titles That Sell
The most important single element for headlines is the smart use of relevant keywords.
Use all CAPS - the listing stands out better
Correct spelling is crucial.
Bold can increase odds by 25% and has the highest ROI on EBay except gallery listing.
Best Performing Words in Titles
Rare New Like new
Best Value Secret Vintage
Top-selling Unique Best Selling
Sexy Love Unbelievable
Super Deal Unusual Hard to Find
Awesome Best ____ on EBay
Descriptions that sell
Provide an enthusiastic and energizing description that makes the buyer feel they need your product.
Write a Clear statement of what precisely the product is.
Talk about the product benefits and disclose any flaws.
Use Action Words
Use short simple words
The shorter the sentences, the better
Use bullets/ short paragraphs
Use pronouns ( You is powerful)
People scan when they read so use short sentences and white space
Use Larger Type.
Always end descriptions with a call to action.
Design a 4 by 8 template to use for your items that have these criteria.
Always include phone # and email in correspondence
Create a tag line ( such as “ Your favorite seller on EBay)
Make sure you create policies that scale.
3 ways to charge for shipping;
Free shipping , higher sale price
Charge actual rate with or without handling fee
Charge a fixed rate - which means you get paid quicker
Make sure you lean and understand EBay fee’s such as insertion, reserve, final value, buy it now, and store types. EBay has calculators that help make the best decision as to what to use.
Make sure you use keyword rich titles
EBay has a keyword program similar to Google's', and you can also use Google ad words to drive people to your store.
Always cross promote items, always
Subtitles are not searchable, so don’t really help and are not worth the extra cost.
I have read that it makes sense to use bold an highlight on more expensive items, not a big fan of bold or highlight.
Gallery makes sense for more expensive items.
Price your merchandise for Free Shipping in Stores, with your rules, such as must use USPS , etc,, must weigh less than say 40 lbs must be below a certain size.. Geography is important, so work out average cost and combine for one set price.
Free shipping adds 12% to 15% so shipping must be lower than 12%
Always put free shipping in auction title if you offer it.
Learn how to use selling manager
Always have a link in your auctions going to your store.
Photos matter, and good photos sell. Go at least two mega-pixel.
Use a tripod, make sure picture is carefully focused, soft light, no clutter, get close, use good color balance avoid underexposure.
I have done some work on using twitter and eBay, and may post the data someday, but to sum up, I was able to drive a larger amount of traffic to various items, however, it did not necessarily translate into more sales, but there were some positive side effects. I will try and some up in a different post, this one is already too long.
“We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.
— Charles T. Munger”
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