Ten Top Tips for Running an eBay Selling Business.

Introduction

Before establishing www.BayCrazy.com I had a full time job but I wanted to supplement my income by selling on eBay. Over the course of my first year, I was turning over tens of thousands of pounds and making profit of thousands of pounds while putting in less than an hour per day on the eBay selling business.

It wasn’t rocket science, but it did involve figuring out an awful lot before the profit kicked in.

I quickly became an eBay powerseller. If I’d wanted to quit my day job, I could easily have made the eBay venture my main source of earnings. Here are some of the tips for success. These tips are obvious when you know them but without them you can be ‘a busy fool’, working hard without profit. I’ve seen other sellers who are busy fools and later, I’ll demonstrate exactly what some of them do wrong, as object lessons. I’ll give general tips here, but a later articles will Describe Specific things to sell and describe the exact steps to starting the business. I’ll also link to some selling tools and resources.

Discussion of High Value Selling or Low Value Selling

Supermarkets have a saying “Pile ‘em high, sell ‘em cheap” Meanwhile a specialist car showroom or super yacht dealership might make one sale a month, but at massive price and massive profit.

What kind of seller will you be?

You have a choice: You can sell a few items at a high individual value or you can sell a lot of items at low individual value. This is a first choice that you face,

          Example of High Value Selling:-

          Buy one car for £1,000. Improve it, List it, Sell it for 1,500 but take a month to sell it.

 

          Example of Low Value Selling:-

          Buy 1,000 pairs of socks for £1 each and sell them for £1.50 per pair. Take a month to sell them.

 

On the face of it, either route to profit takes a month and makes you £500 of margin, but the difference are clear.

High Value Selling Advantages and Disadvantages

Advantages

  • High Value Selling Far less running around.
  • You only have to deal with one buyer
  • You only have to work with one listing, one set of photo’s etc.

Disadvantages

  • You may need to put in one or more long sessions of effort.
  • Single and specialised effort may be required. Each item might present its own problems. ( This car might need some welding, the next one might need an engine etc)
  • You put all your eggs in one basket. If this deal goes bad, all your profit can fly out of the window.
  • Only one piece of feedback. It may be good or bad, but if it’s good, it can be wiped out next month by just one deal going bad.
  • If you get bad feedback on any one item, your reputation could be totally negative and destroy your venture. There’s less middle ground.
  • Significant cash tied up in one item of stock.

 

Low Value Selling Advantages and Disadvantages

Advantages:

  • You can maybe create one listing with the effort that entails, and re-use that listing for many may items.
  • You get to build lots of feedback, hopefully positive. A few negative feedbacks could get obscured by the masses of positive feedback. There is middle ground.
  • You might build up a list of repeat customers to sell to.
  • Your income would flow in more steadily and if the odd sale goes bad, it won’t bankrupt you,
  • Possible to make extra margin on postage costs (possible, but not always a good idea)

Disadvantages:

  • You need to put in a little effort every day until the stock is sold.
  • Lots of customers to keep happy.
  • Lots of packages to dispatch with almost daily running to the post office.
  • Costs may be small, but repeated for every small item sold.
  • You might struggle to make the large nuber of sales required, simply because of lack of demand.

In my opinion it’s an easy choice: I strongly recommend that if you are to be a part time seller, fitting this venture around a day job, that you do low value selling. Only opt for High Vallue selling if you are a real expert in your market and can dedicate several days at short notice to each item bought and sold.

And now, my top 10 tips:-

 

Tip #1: Maximise your margin: The difference between your Item Purchase Cost and Item Sale Price is the main source of your profit. Maximise that margin on every sale.

Tip #2: Minimise your costs: Costs sneak in everywhere, from eBay fees to stationery costs. You need to make your business efficient to keep those costs down.

Tip #3: Think like a business because you ARE a business. This is fun but it’s no hobby. If you want to work hard and make a loss, this guide is not for you.

Here is the formula that underpins your business

          Profit= (Number Items Sold)*((Item Sale Price) - (Item Purchase Price)) – (Business Costs)

All these three facets have the same amount of influence on your profit, but some are easier to control. Give thought to what you can control and what you can’t. Take control!

Number of Items Sold is determined by the nature of the item and by what your position is within the market place. If you are the only seller of a popular item, you will be in a totally different position to if you are just just one seller in a widely available and ordinary product. Dominating a small market niche is the way I did it.

Item Sale Price is limited by ‘the going rate’ for the item sold. Your control over Item Sale Price is severely limited.

Item Purchase Price has a lower limit of £0 !!! If you can get your stock free or nearly free, then you are doing well. Later I’ll show you how I did that.

Business Costs are an area where you have a lot of control. Put a lot of effort into controlling costs. Again, I’ll show you how to minimise costs later. And don’t forget that your time is a cost.

Tip #4: Make your profit when you buy your stock!!!! You choose the time, the place and the price when you buy stock, You have less choice over the other aspects of the business.

Tip #5: Give FANTASTIC CUSTOMER SERVICE. eBay’s feedback system can destroy you and there are millions of competitors who are already established or who will happily take your customers. You need to maintain absolutely impeccable feedback profile if you are even to survive. That means you must satisfy your customer expectations no matter how unreasonable.

Tip #6: Buyers expect instant delivery and instant gratification. They don’t care if there are two bank holidays just after they start the purchase. They don’t care that they are in an area where postage is slow and unreliable and they don’t care that you have to process the order, package it up, and get it to the post office, It’s unreasonable, but they expect the incredible and generally don’t want to pay for the privilege. Somehow you have to pander to that, or at least manage their expectations. For many items, despatch on the same day as order placed, preferably within 4 hours, by first class post, dispatched from a sorting office or major post office.

Tip #7: If a customer is unhappy, give a 100% refund AND a free replacement by first class post. Positively fawn over the customer, expressing sincerest abject apology ( twice ) sharing their disappointment. Then block them as a future buyer. Few customers will expect that in advance, and you discourage any from taking advantage of you. Write off such bad trades as a cost of doing business and don’t dwell on it. You might be able to turn a potential negative feedback into a neutral or positive one.

Tip #8: Don’t sell ordinary clothes!!! Fashion, clothes and accessories are the biggest marketplaces on ebay. If you sell into this market, you are competing with High Street outlets such as George and Primark and more to the point, you are competing with shoplifters who get their stock for free from those outlets. You also compete with inexperienced hobby sellers who don’t care to make a profit and who will suppress prices. Selling ‘Ordinary Clothes’ is not worth the effort.

Tip #9: Have a Unique Selling Point. Set your items apart from similar ones. E.g. If you sell hammers, throw in some free nails. If you sell staplers, throw in some free staples. If your market is selling pens, make your pens into pen sets, complete with pen holder. Your item needs to set itself apart with some little extra touch. If the item does not lend itself to that extra ingredient, then offer some other ‘extra’ such as gift wrapping or monogramming. Make your item special even in the most boring way.

Tip #10: Dominate a niche. There are items where you might be one of only a very few sellers. The items might be silly, but with enough margin and enough turnover, you can completely dominate a specific type of product. I’ll give real examples of niche selling in a later article.

Bonus Tip #11: Rinse and repeat. Once you have mastered one small product opportunity, set that item as business as usual and add another product. Keep exploring products and broadening your market offering. Put the effort into what works best, but keep reselling whatever makes profit.