Lost a lot of money on eBay auction

Full Member
11morten
Posts: 4
Joined: 21 Feb 13
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22 Apr 13 05:22:39 pm
Hi! I tried to take a risk on ebay, and listing some brand new die-cast airplane models WAY below retail price, becouse It is hard to compete with all the top rated sellers.

I also advertised on some forums for diecast airplanes, to get some extra views. But when the auction was over all I ended up with was small change. And lost a lot of money.

If any body could check out my next auction, and maybe give me some tips on what I do wrong, I`ll be very greatfull!

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Thank you!

(please excuse my English if there is some miss spelling)

Site Admin
fudjj
Posts: 5909
Joined: 27 Jul 07
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22 Apr 13 10:19:38 pm
Hi 11,

The very first lesson in investing is, if you can't afford to lose it, don't invest it to start with!

It's so true, while many may not consider your selling strategy to be investing as such, it is essentially just that. You are using a high risk selling strategy that is putting you in a position of risking your own cash.

There are so many areas that are in question here, but the key one that stands out to me the most is, what is the sell through rate for your items?

If your item doesn't have a high sell through rate at any price, then setting a low base price in the hope of bidders driving it up is flawed. You need bidders to drive up a price, so if you are selling a low sell through rate item, chances are that the bidders just aren't there in the market place.

You also mention that it is hard to compete with other seller's prices. Now using your current strategy, the best price you could possibly even hope to get would be a price somewhere close to the best price your closest competitor is selling for. Bidders will only stay in the game until the item no longer presents value to them, so once your auction got close to the same item with a BIN option set, the value of your item decreases dramatically.

Now I don't know what price your competition is selling for, but if they are close or under your BIN price, then you have very little chance of making any money with this current strategy at all!

Another factor that can impact on your current strategy, if someone lists the same product on the same strategy a day or so after your listing, bidders will only go so far on yours before they drop off and move down the list to the following item.

I would suggest going over your research once more, firstly make sure there is a market for your item that can sustain your current strategy. Tick that box, then we can look at some other strategies that may assist.

Btw, I notice a spelling error on your template that I would suggest correcting asap. At the bottom, (se) needs to be (see) It's not much, but a potential customer may see that as being unprofessional and in a competitive marketplace, it doesn't take much to lose a sale!

Cheers


Mark (fudjj)

Community Manager
SaleHoo.com

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Full Member
11morten
Posts: 4
Joined: 21 Feb 13
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23 Apr 13 07:14:40 am
Hi,

Thank you for your tip on the template, I have sorted it out.

I think I might have asked my question in a clumsy way, I do not use this strategy on everything. But more for getting some attentsion and getting noticed. I know this was a risk to take, so I not ruined becouse this did not work as I hoped. I lost the money, but I do at least get some positve feedback from the buyers! I only have 44 positive feedback, do you think this could be a reason for buyers to not wanted to bid?

I wanted to start in this business becouse, It is also one of my interest. My main focus is on the Norwegian marked, becouse they pay more, and it is cheaper to ship in norway. But I do need ebay to get some more sales in volume.

You saw the template and did it look ok? do you have any tip on how to improve?

Thank you

Full Member
11morten
Posts: 4
Joined: 21 Feb 13
Karma: 
23 Apr 13 07:14:41 am
Hi,

Thank you for your tip on the template, I have sorted it out.

I think I might have asked my question in a clumsy way, I do not use this strategy on everything. But more for getting some attentsion and getting noticed. I know this was a risk to take, so I not ruined becouse this did not work as I hoped. I lost the money, but I do at least get some positve feedback from the buyers! I only have 44 positive feedback, do you think this could be a reason for buyers to not wanted to bid?

I wanted to start in this business becouse, It is also one of my interest. My main focus is on the Norwegian marked, becouse they pay more, and it is cheaper to ship in norway. But I do need ebay to get some more sales in volume.

You saw the template and did it look ok? do you have any tip on how to improve?

Thank you

Site Admin
fudjj
Posts: 5909
Joined: 27 Jul 07
Karma: 
23 Apr 13 09:50:03 pm
OK, if it's a deliberate strategy to draw traffic, the that is of course a valid marketing exercise. Called loss-leading, the name pretty much says it all, the object of the exercise isn't really to make money, it's designed to draw traffic through the door.

My previous points are still very valid when using this strategy. Firstly, you need to ensure that you have a platform and stock profile to take advantage of your loss-leading marketing. For example, a well stocked eBay shop that you are able to market through your loss-leaders.

If you don't, what are you leading customers to?

Secondly, and this goes to my main point of yesterday, you need to make sure the market is there to draw the traffic from to start with or you are simply trowing money away without any chance of converting that into long term business.

In regards to the template itself. Of course it's quite a subjective thing giving advice on a design. That said, my opinion is that it doesn't have a professional look, in fact quite the opposite. I think the colours you've gone with are too dark and over powering for the genre.

If we are talking about models, I think a template including things such as more images, including cross marketing some of your other models. A detailed profile on you as a business and why a customer should buy from you. Essentially, what makes you better than your competitor?

Detailed back ground information on the model maker themselves, just to highlight the quality of the products you carry and so on. You don't want to make it too in-depth that the customer loses interest, so you have to find a balance, you really want to make that as informative and as attractive to a potential buyer as possible.

I don't think your low feedback is a particular issue at this point, but a far more professional template will serve to take that low feedback out of people's minds if it is of any concern to them at all.

One of the things that always surprises me is that most people don't treat an online business the same as a bricks and mortar business in a design sense. Ask yourself what you would expect to find if you walked into a model store, how would it be layout out, colours and general design?

A smart business owner sets out their store to a plan, and that is to maximise the marketing impact once a customer walks through the door. Online business is exactly the same, smart business owners are looking to make the same impact. In fact it's even more important to make a big impact for an online business because there is no salesperson there to get the customers attention. It's also crazy simple for them to just walk out of your store and straight into a competitors in a matter of seconds.

The number one aim of any online store or even an eBay listing, should be to grab the customers attention and then hold it long enough to convert their visit into a sale!

Now you're never going to convert every visit into a sale, but when thinking about a design platform, that should be where your head is. How do I design this for maximum impact, how do I convert visitors into sales?

Most think that just comes down to things like price, and of course that plays a huge factor in online business, but there is a lot of background work that goes into a successful business.

Just on a slightly different point, if it's models you want to specialize in, then I may have an interesting option for you. We actually offer a full custom built model option through a business venture that I am partners in. The models are made to order in the US by a master model builder. They can be built to any specification desired, and and built out of wood, then finished with a range of metals, plasters and so on, to get the desired result.

All that is required are some detailed images, photos or accurate drawings for conceptional work where photos are not possible.

Now they aren't toys and are not cheap. They are Museum display quality that are designed for serious enthusiasts and collectors of all genres. Cars, Ships, Trains, Motorcycles, pretty much anything can be made to order, and to any scale.

These aren't the type of things you will find everywhere, in fact very hard to find this type of service that is open to public orders. We only market these through our own business venture, not on any auction sites, including eBay.

So, if you think that might be something that your customers would find interesting, drop me a PM and I can shoot you through some more details for your consideration.

Cheers


Mark (fudjj)

Community Manager
SaleHoo.com

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