Sunday, December 24, 2006

Starting to sell on eBay on a (used) shoestring...

While you, yourself, may not be in the same boat I am, there are new people coming to eBay every day that have little or no resources to start up their business. And, yes, it is a business. Even if you only intend to peddle one or two items from your attic, the more businesslike you are in how you do it matters. For one thing, those who might buy from you expect you to be as professional as the biggest online stores.
     I suggest you hunt around and find every free resource you can get your hands on. I already have a dozen free eBooks on marketing, managing auctions, finding merchandise, planning and research. Plus, every tutorial I've taken at eBay University has helped fix in my mind what I need to know about the various steps I have to take to become fluent in "eBay".
     Spread the word that you're on eBay, especially if you've taken the plunge and sold something. In one day, I had three different people ask me about helping them sell something they have, but have no idea how to "do eBay". Use your common sense: one person had a car he wanted to unload and have the buyer take over his payments. I don't know cars well enough to tell if it's worth taking, much less how to structure an auction that would work!
     Also, NEVER assume that what someone tells you about the value of the item they may want to sell is anything more than wishful thinking. They may think it's the same thing they saw on Antiques Roadshow, but do a little digging. Compare the exact item (if you can) with recent closed auctions, paying careful attention to what it sold for, how many bidders there were and how many other similar items are currently available. Trying to push an item into an overcrowded market when you're new to the game is a recipe for failure.
     As for finding wholesale merchandise to sell, you can bet there are plenty of offers here to tempt you into parting with your hard-earned dollars to get EXCLUSIVE SECRET EXPLOSIVE access to wholesalers. If it looks too good to be true, it probably is. Even if it has a 100% money back guarantee, you can't get back the time you wasted finding out it ain't for you. Hunt around for Certified eBay Solution Providers.
     I have some wholesale experience in my past, and know how wholesalers like to work. They like dealing with people who are prepared: they have a tax ID, they pay up front (pro-forma) and/or apply for a business account where you pay after you receive the goods (net 30 = you pay for merchandise and shipping within 30 days of receipt).
     Dropshipping can be very convenient, but in most cases you'll pay more for merchandise than if you bought it in a wholesale lot, stored and shipped it yourself. The exception is when you find a manufacturer who will drop ship for you directly from the factory. It may take some serious hunting around, but finding one can transform you overnight into a steady business. This presumes you have people who want to buy and buy again - there really isn't a big market for repeat sales in coffins!
     You must understand the concept of due diligence. It means you do your homework, proceed cautiously and take nothing for granted. If you decide to go with a dropshipper you have no previous experience with, list one or two items, wait to see how the customer reacts to the sale before you roll out with 150 listings in a brand new store. Imagine the negative feedback you might get from buyers who are either not shipped or who are shipped a defective product. You don't need a "dropshipper" who ships slowly, can't be reached on the phone or by email if there's a problem and tacks on "hidden" fees you never agreed to.
     This brings me to a very important point: when in doubt, DON'T. Don't open a store because you kinda sorta think you should. Fees for selling in a store can break you if you aren't prepared for them. For example, eBay gets 10% of your final selling price in a store, rather than the 5.25% for a simple auction listing. Then there's the monthly fee for keeping it, etc. NEVER spend an extra cent you cannot justify to your mother-in-law!
     "When in doubt, don't" also means avoid doing anything that even hints of evading the rules and regulations. Why go to the trouble of setting yourself up in business, only to get kicked out for playing fast and loose with the rules? This goes for collecting sales taxes, keeping good records and paying your income tax. Can you say, "IRS audit"? Sure you can! You just don't want to!

I'd appreciate your opinions, ideas and ways to improve this guide.

P.S. Drop by and vote for this Guide on eBay.