Why eBay?

eBay is still a buzzword on the lips of many people espousing new entrepreneurial opportunities.

The question is – is it really so special? And if so, why?

eBay has proved to be a very lucrative market for many sellers, especially those who have forged out their own niche. It certainly isn’t a get rich quick scheme – just like any other business it requires hard work and dedication. But an eBay business doesn’t necessarily have to make you a millionaire to be beneficial: the lifestyle benefits are pretty good on their own! Add in the fact that you are your own boss and you can control what you do, and the prospect of a full-time eBay business seems a very appealing one indeed.

What makes eBay different from anything else is that it is democratic. Members have the freedom to buy and sell directly and, as a consumer, you needn’t rely on the big brands and marked-up prices. Best of all, you don’t need stockpiles of cash to start selling on eBay.

Here’s what you’ll need to start an eBay business – and it’s surprisingly little!

• An up-to-date computer
• A digital camera
• Scanner
• High speed Internet connection
• Cordless phone
• Shipping supplies (i.e. boxes, packing tape, bubble wrap, tape measure, postal charts & scales)

The first thing you’ll need to do is sign up to eBay as a Buyer.

Go to www.eBay.com and click the Register link at the top of the page. If you are already browsing, this link will appear at the top of every page in eBay until you have registered.

Fill in your details. You will be required to enter your address, phone number and a credit card number. The credit card number is used by eBay ONLY to check that you are who you say you are. Your details will not be given out to anyone else.

Your eBay user ID is what everyone will see who deals with you. Make sure that you choose an ID that you like – after all, you will be using it from now on for all of your transactions! eBay will suggest a number of options if your ID is taken, but most people like to create their own.

It’s a great idea to create an ID that reflects your business. For example, redhousejewelry.

Once you have entered your details, you will need to go to your email address and click the link to complete your registration.

When you have done this, you are immediately able to bid and buy. Hooray!

Creating a Sellers Account

Now it’s time to create a Sellers account. You’ll be given this option at the end of creating a Buyers account. Or, you can just click on Sell from the homepage. If you aren’t signed in, then you will have to type in your User ID and password before you can begin.

• Click the Sell Your Item tab.
• Once again, you will be asked to provide credit card details and your bank account number as authentication. eBay won’t charge these accounts unless you authorize the transactions. Make sure that there is no discrepancy between your credit card information and your billing address. This could result in hold-ups down the line.
• Now specify how to pay seller fees. Fees are charged for listing and selling items and you need to specify how you plan to pay. If you change your mind later, you can use My eBay to change your payment method.

And now you are ready to sell!! Check your email and you’ll find one from eBay congratulating you on becoming a seller.

The Feedback System

One of the most important things about selling on eBay is the feedback system. eBay uses community monitoring to make sure that high standards are upheld. After each transaction, the buyer and seller can give each other feedback. This feedback can be seen by everyone on eBay.

For example, for every item that is for sale, you can meet the seller by clicking through to read their feedback:

If you click ‘Read feedback comments’, you’ll be able to read every feedback this seller has had.

If either the sellers or the buyer act fraudulently, or do not meet their obligations, negative or neutral feedback acts as a warning. Once feedback drops below 96%, the account is closed.

On the other hand, the more positive feedbacks someone has, the higher their status. eBay gives special status to those who reach high numbers of feedback: different colored stars indicate different levels of points (that is, how many feedbacks the individual has received).

You aren’t obligated to give feedback, but most people do because it helps the community by reinforcing a good seller/buyer and condemning a bad one.

When it comes time to give feedback, you will need to choose between a rating of Positive, Neutral, and Negative. You should also add a comment to back up whatever rating you have given.

Ive a rating of Positive if everything about the transaction went relatively smoothly. That is, the buyer paid within a reasonable amount of time. A Neutral rating can be used if the transaction had some difficulties, but was sorted out in the end. For example, the buyer took an extremely long time to pay, or protested over the shipping, but eventually paid the total price.

A Negative rating should only be used in the very worst circumstances – when everything has been done to resolve the situation, but the buyer refuses to pay, or just makes no contact.

You can easily check the feedback of buyers by clicking on their eBay ID. Or, you can search their ID name by going to Community. Enter their ID into the window at the top of the screen and press Find A Member. Ebay will return with IDs similar to what you entered. Choose the correct one, and you’ll be able to see their location, how long they have been a member, feedback and so on.

The feedback system is one of the keys to eBay’s success.

The eBay Sale Process

1. First, you must have an item to sell

When you first start off on eBay, I recommend just selling something you’ve got lying around the house. It could be jewelry you no longer wear, the children’s old toys, or something like that. Once you’ve found something, check with eBay’s guidelines to determine whether or not it is permissible (some items are prohibited, see http://pages.ebay.com/help/policies/items-ov.html) and research its value

You can easily see how much similar items have sold for by searching eBay’s completed listings. Just type in your search as normal, then, when the first results appear, move down the left hand panel and check the box for completed listings.

Hit the Search button again, and eBay will display completed listings from the previous two weeks. Note that you have to be signed in to use this feature.

click on the image for a larger view

If you think you have an expensive item on your hands, I’d recommend getting a valuation before putting on eBay. An authenticated certificate for an antique or collectible will also make it more likely for collectors to bid.

Another reason for selling a common-place item from around the house initially is that buyers are likely to be reluctant to purchase anything of value from a new seller. It’s only when you have 10+ positive feedbacks that buyers will start to take you seriously.

2. Take Photos

The next step is to take some photos of your item that give a clear and accurate representation. Digital cameras are the easiest way – and ultimately the cheapest. It isn’t strictly necessary to include photos in the auction, but tests have shown that photos dramatically increase your chance of making a sale.

An easy way to take a good photo is to buy a couple of pieces of large white matt poster board, and a sheet or two of matt white paper. For a small item, you can place the item on the board outside where you’ll get the best light, and take a photo standing above the item.

For larger items, place two pieces of white poster board at right angles to one another – e.g. one against a wall, the other flat on the floor in front. Then get a piece of white paper and sit it over both so that it forms a concave curve over the fold where the two pieces of card meet. This will give you a plain background for your item. Place the item in the centre and photograph.

Taking photos inside is a bit trickier. You can still use the poster board and paper, but lighting becomes more complicated. You’ll need at least two lights to get a good photo. Place one at either side of you and point towards the object so that the light paths cross. Keep adjusting the position of the lights if necessary. Your goal is to remove all shadows to create a professional-looking picture.

For very large items such as furniture, lighting is easier if the picture is taken outside. However, if the item simply cannot be shifted easily, just try to photograph against a plain wall. Remove any clutter, such as other furniture pieces and pictures on the wall. Or, if you have some image editing software such as Photoshop, then you can cut out the photo there.

I recommend taking at least two photos unless your budget is limited: One that pictures the whole item, the other a close up of the detail, label, any damage, and so on.

3. Setting up your Auction

Now it’s time to set up your auction.

First, write the title. It’s important that you use good keywords here. If you aren’t sure what to write, check out the completed listings of similar items to see what words have led to a successful auction.

eBay searches only check titles for important keywords, so it’s essential you include all the main words that describe your item here.

For example, a good title for a camera would be ‘Nikon Coolpix L4 digital camera 6.2 megapixel’.

This title would be picked up by very limited searches as well as the more detailed. It would appear for searches for:

‘camera’, ‘digital camera’, ‘nikon camera’, ‘digital’, ‘Nikon Coolpix’, ‘Nikon coolpix L4’, ‘6.2 megapixel camera’, and so on.

Sometimes it’s all too easy to get caught up in the specifics in the title and forget to put in the most important keywords of all. Once I listed an item as ‘Green Tsavorite and white gold matching jewelry set’. Quite forgetting to include the words earrings and necklace! These are probably the two most popular search terms for jewelry!

You also have to write a brief description of the item, including important information such as any flaws, whether or not it has a guarantee, age, brand, dimensions, and so forth. The easiest way to write a description is to use a bullet-point list.

Add your photo to this, along with payment and shipping details.

The safest and easiest way to receive payment from around the world is by using Paypal. It’s very easy to set up a Paypal account, plus it’s also very secure, traceable, and fast. Just go to http://www.paypal.com/.

Other payment options include credit card, personal check, cashiers checks and money orders. Of these, the safest options are credit card and cashiers checks and money orders. However, it is very costly to set up a merchant account, and cashiers checks and money orders take at least a week before the money comes through.

For people selling antiques and collectibles, you may find that many mature buyers prefer to pay by check. Usually these customers are reliable and you are unlikely to have any problems. Consumer electronics is a riskier area, although many younger buyers will only trust Paypal anyway.

Specifying the areas that you will ship to is particularly important if your item is very valuable or large. Most sellers these days also specify shipping costs, rather than waiting until the auction closes. This avoids disputes later on and encourages bidder certainty. Plus, eBay now displays shipping costs in the search listings, making it a lot easier for buyers to compare shipping charges for a similar item.

eBay offers a lot of extra features to help your auction stand out – most of which cost money. This can be a bit confusing when you get started. It’s hard to know which represent value for money. Generally, I recommend avoiding everything except the Gallery feature. As your sales grow later on, you may wish to test some more of these features.

4. Manage the auction

Once you’ve put your details up, you can track how many people have viewed the item, how many have bid on it, and edit listings and manage bids.

5. Hooray! A sale

When the auction ends, contact the winning bidder who will pay you. If all goes smoothly, you should then leave positive feedback.

If the item doesn’t sell, then eBay will send you an email giving you the opportunity to re-list your item.

6. Shipping

If you haven’t already, then you’ll need to establish the most appropriate shipping method and make sure the item is well wrapped. Shipping is a highly important part of the selling process: You don’t want your buyer to receive a broken product! You need to wrap your item well enough to endure damp, being tossed around by postal workers (Fragile stickers are often disregarded!), and left out in the hot sun.

Other Listing Formats

Auctions aren’t by any means the only way to sell on eBay. You can list your items as Buy It Now, ask for Best Offers, or on eBay stores.

For buyers, auctions have the attraction of cut-price potential. For sellers, the competitive nature of auctions means that prices can often soar above the real market value of the item, making them a very profitable option indeed. For these reasons, auctions are and will remain a popular listing format.

However, if there are not enough bidders competing for an item, then prices can remain very low and this is where other selling formats can be put to use more effectively.

Buy It Now tends to attract people who like instant gratification and aren’t willing to wait the auction eriod out! Apart from appealing to a different audience, it is also ideal for selling several of the same item. For example, if you have 20 DVDs of The Sound of Music, then you only have to list the DVD once (avoiding flooding the market), but you can sell them as quickly as people will buy them.

Buy It Now can also be used strategically in other ways too. The Buy It Now price that you set gives the potential bidder some idea of what the item is worth and what they should be bidding. By running Buy It Now consecutively with an auction, you can increase perception of value – while also maintaining control of what bidders will see as a bargain. For example, if you place a Buy It Now price of $20 on your Sound of Music DVD, then the bidder will think they have a bargain if they purchase it with a bid of $15. Of course, the strategically-minded seller has arranged this neatly so that $10 is a price that they are more than happy with and gives them a decent profit. The Buy It Now price of $20, and any bids over $10 are an added bonus.

To use the Buy It Now format, click on the Fixed Price option when choosing a selling format and then complete the rest of the process as usual.

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Another option that has only recently been introduced is the Best Offer format. This allows buyers to offer the seller a price they are willing to pay for the item. You can choose to allow Best Offers by checking the appropriate box when specifying your pricing.

Once an offer is accepted, the item is closed, and the buyer must pay the amount offered. As the seller, there is no obligation on your part to accept an offer.

The Best Offer format is available to sellers who meet the requirements of a feedback rating of 30 or more and being a registered user for at least 14 days. It can run alongside both the Buy It Now and the traditional auction formats.

The Best Offer format is a fantastic strategic tool and can produce some wonderfully generous offers. Although you do need to be prepared for a certain number of time-wasters hoping to get something for nothing!

Here are some strategies to try to get the most from Best Offer:

• Try listing a Buy It Now price 24% above what you would like to sell for. A keen, reasonable buyer will generally offer around 80% of your Buy It Now price, which means you get more than you want, and the buyer gets a bargain too.
• If you do get offers that are far too low, try emailing back with the offer price you would be prepared to accept, rather than laughing in their face – as tempting as that might be. It’s a wise policy to always treat people well and maintain a good reputation rather than using the opportunity to say what you really think!

Pricing Strategies

Most people are familiar with the old psychological trick of selling something for $9.99 rather than $10. Nine times out of ten, people will choose the $9.99 option over the $10 one, just because they subconsciously believe it is cheaper.

eBay works like this too – and there are a whole pile of other psychological strategies you can try in order to get the best price for your item.

1. Start the bidding at 0.99 cents. This is like having a sale – it can work very well for catching people’s attention. However, if there is not enough interest in your item, then you could find it doesn’t reach its true value. For the 0.99 cent starting price to work best, you need at least two bidders with a strong interest in the item.
2. Reserve auctions with a low starting bid. Reserve price auctions don’t tend to do very well on eBay. Buyers can remain emotionally detached from the item, because they don’t know whether or not they are anywhere near to the reserve price and owning it!
3. Buy It Now. Try setting the starting bid price close to the Buy It Now price. The buyer is more likely to pay the Buy It Now price rather than risking losing the item for a small amount of money.

Here’s some general advice:

• Don’t end your auction after 11 pm at night. The more people online when your auction ends the better.
• Be careful using Best Offer in conjunction with Buy It Now. This has the psychological effect of making it seem like the item is not actually worth the Buy It Now price.

Notes on Shipping & Packing

How do I work out shipping costs?

Shipping costs vary depending on:

• Weight & dimensions of the package
• Method of shipment – airmail, surface mail, fast-post
• The location you’re shipping from
• The location you’re shipping to
• Whether or not you include insurance – or whether or not the carrier includes it automatically.

If you’re shipping internationally, usually it’s the buyer who pays for shipping and any additional costs that are incurred, such as insurances, duties, taxes and customs clearance fees.

In some instances an ‘extended area surcharge’ may apply to your buyers depending on their international locations.

It’s also a good idea to include a handling charge in the shipping cost to cover your time and expenses. Be sure to specify that the cost includes a handling charge and isn’t just postage. Otherwise, some buyers will feel ripped off if they see that postage only cost $4.40 and you charged $6. Yet, your time is involved in packaging and posting the item, so it’s fair to cover those costs. You’ll find that if you itemize a handling cost, rather than just including it with shipping, people will accept this small extra charge more readily.

One other thing – don’t overdo the shipping costs. It is against eBay’s rules to deliberately set out to profit on the shipping, rather than on the item itself. Because this policy was being exploited so often, eBay has recently introduced the policy of removing auctions with outsized shipping charges.

Customs

For small items, many sellers get around customs charges by sending it as a gift. It’s wise to research the areas you are willing to send your items to. Some places have quite strange restrictions on goods that you would never guess unless you checked! E.g. Australia doesn’t allow used bedding, Italy doesn’t allow shoes.

Transit Time

One of your biggest considerations should be how quickly the buyer receives the parcel. Within your country, buyers would expect their item to arrive within a week from payment. Overseas, 1-2 weeks is acceptable.

Insurance

Insurance is yet another important issue. Some carriers will automatically insure your package for up to $100, but it is wise to check on this first. If your item is worth over $100, it would be extremely foolish not to purchase insurance.

To find out shipping costs:

If you have a ZIP code, Ebay’s shipping calculator helps to calculate the costs involved in shipping a parcel.

http://payments.ebay.com/ws/eBayISAPI.dll?EmitSellerShippingCalculator

Some shippers have a shipping calculator on their website.

• UPS – http://wwwapps.ups.com/time
• FedEx – http://www.fedex.com/ratefinder/home?cc=US&language=en
• United States Postal Service – http://www.usps.com/tools/calculatepostage/

Or do it at home the old-fashioned way with a postal scale and chart. (Postal scales can be purchased on eBay for around $20-70, not including postage).

Packaging

No matter what your parcel contains, it needs to be water proof and have a least one layer of bubble wrap.

For CDs and DVDs, special mailers are an easy way to post. Other items will require a variety of packing materials to ensure proper protection.

Unsurprisingly, you can find many common packaging materials for sale on eBay. To give you an idea of prices: 60 gallon bags of packing peanuts will cost you around $12-$16 on eBay, while 200sq feet of bubble wrap will cost around $16.

Many shipping companies also offer packing supplies – or will even do it for you!

Take a look at these packaging sources:

• http://www.bubblefast.com/
• http://www.officemax.com/
• http://www.shippingsupply.com/
• http://www.staples.com/
• http://uline.com/
• http://www.theupsstore.com/

If you’re packaging a fragile or oddly-shaped item, then you might want to check out this site that includes a list of all the packaging known to man!

http://www.ups.com/content/hn/en/resources/prepare/materials/insulation.html

For fragile items, pack them in a box that is large enough to allow for a 3” to 5” gap around the edge when the item is placed in the centre. Put your fill in the box, then wrap each part of the item in a layer of tissue paper and then a layer of bubble wrap. Place carefully in the centre of the box and finish off with another layer of fill on top of the item, so that the box is filled to the brim. Pack very tightly. Tape down the lid of the box and then give it a shake. If anything rattles, you’ll need to repack it again.