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5 Things I Wish I Would Have Known Before Selling Online
EBay is an auction website designed to be the fastest way possible to effectively sell goods online.
Analyze this statement and think about the recent fee hike imposed on eBay store sellers. Could this be a reason why the fee hike was imposed? I certainly think it is a factor because eBay was created as a place that anyone can auction off just about anything for a quick profit. I know that it is tempting and that it is by far much easier to sell products on an eBay storefront and to rely on the simplicity of EBay’s payment system Paypal. I guess you wouldn’t think twice about trusting such a great and effective service with your business but please look at the risks. It is from a Wiseman’s theory that one should never place all of their eggs in one basket.
If you decide to only sell your goods on one site than you are putting your business in the control of one company that can make you non-existent at any time without prior warning. Many people feel uncomfortable building their own website simply because it is totally new unexplored platform to them. I would tell anyone that wants to make it as an online seller to go for it and to educate themselves as much as possible. You need to be in control of your business not only for the future of your business but for your financial security as well. My suggestion for anyone starting out would be first to register your domain name with a reputable domain sales company. You will than need to register your hosting service with another company to add greater security to your investments. Now research, compare, and choose a storefront that you can reasonably run an online storefront from. I would suggest if you have some programming knowledge to use an open source free shopping cart.
The knowledge and freedom that you gain and the work that you put in will be far more beneficial when you do it yourself instead of paying a service charge to get the task done. Once you set your main storefront up you need to reach the customer through a variety of measures provided by advertising and also to ensure better results consider adding an affiliate marketing plan to your storefront allowing others to sell your products in exchange for a commission. The storefront you create on your domain will be the powerhouse of your business that is secure by you the business owner with it branching out to many of the wonderful service opportunities available to online sellers.
2. Paypal is a popular choice payment service provider that you may consent to regulate and transfer all or some of your internet transactions.
Paypal is a very successful company that currently provides the majority of payment transactions. When you sign up for this service you are required to agree to every one of their policies as a legal agreement between you and paypal. I strongly suggest any buyer or seller that signs up for this service educate themselves about what they are agreeing to because you may find that the risk simply is or is not worth it depending on your situation. In basic summary of the legal terms you agree to waive the vast majority of your consumer rights regarding payments sent and received through paypal. This means that you are making paypal the sole judge for all your transactions done by this service. Unfortunately paypal is not FDIC insured like your local banks which means your money is 100% unsecured. Paypal is indeed a great service and has been used successfully by many users however in my opinion they are far too large and far too unregulated to properly judge your disputed transactions. They list their rights in their agreement and will at any time use their rights as stated in the agreements. Alternatives to paypal can include a Merchant Account/ Payment Gateway Service, electronic check payments, other online payment service providers, and traditional mail in payments. You must decide which method is going to be most beneficial to your situation as well as protect your clients and your business.
You must act as your own judge when choosing your Manufacturers and Suppliers.
I remember seeing time and time again the first question most new sellers ask is where do I get my products? First mistake is they ask sellers to list their sources. Ask yourself this why any seller would provide their hard-researched sources to you. The answer is they most likely will not because who wants less sales and more competition, certainly not me. As an authorized supplier for a number of manufacturers I do provide wholesale services to legal retailers and entailers online. I hold many of the same policies as other wholesalers do and that is you need to provide me a copy of your “resale” license and complete the “tax-exempt” form. I also provide commissions for sales brought to me by my affiliates, and offer drop shipping services to a select number of approved merchants who wish to resale my products online. As a distributor (wholesaler) I buy direct from the manufacturer which requires high minimums ranging from usually around five thousand to a couple hundred thousand dollars USD. I will tell you now I was not able to start out as a wholesaler when I first started as a merchant. I had to work my way up with cash flow. Wholesalers make money on bulk volume sells which usually ranges from 20%-40% mark up.
The retailer than takes these and deals directly to the consumer regulating appropriate collection of taxes and setting their markups appropriate to their market. A general rule of thumb in my opinion is a Brick and Mortar store should at least mark up their product 100% which would be a Sale of $20 for a purchase of $10 wholesale. ECommerce is looked down upon as a threat to a lot of manufacturers because of its supply chain potential damages. Online Retailers have a variety of strategies to take with one extreme of high markups and low sales volumes(less work) or low markups and high volumes(A lot more work!). I usually see most domain storefronts sell 75%-100% markup of wholesale price. I usually see new items on eBay/auction storefronts sell at a markup of 25%-75% depending on demand and competition. If you choose eBay as your seller platform be forewarned that you are going to be in one of the most competitive markets that usually only distributors can servive in with maybe a few exceptions of course. I had some of the top zippo lighter sales recorded by auction analytic sites on a certain number of occasions once I reached power seller status and sales of over $10,000 eBay sales/month. I am going to let a number of you on one of my Zippo product strategies since I now have a number of salesmen selling my products on eBay. It involves two (really legally one) additional factors that effect the final total paid by the buyer. For legal compliance I would suggest to any seller to only use the Insurance for the cost of insurance if you are going to make it required for the buyer. If it is optional than you have better grounds for charging reasonable insurance fees. I usually didn’t use insurance except on rare instances and test occasions.
I instead used the one additional payment which is the s/h. Buyers hate s/h charges that are over the listed shipping charges noted on the package. This is bad for the seller because it often involves a lot more in expenses than just postage. Thank you for invisible indicia provided by a number of United States Postal Service’s authorized service providers. This solves those buyer complaints for the most part unless you are just obviously overcharging on shipping and not disclosing it in your auction listing agreements. If you clearly state what your s/h charges are in your listings than your buyers have no room to complain. My EBay Store Success came from a little psychology trick which sold my items at the average wholesale price with tiered shipping and handling charges that I defined clearly in the listing including labor, postage, and packaging costs. I tiered this as I had seen previous catalog magazines do in the past by defining shipping per item as $3.99 for .01-.99, $5.99 for $1-$10, $7.99 for $10-25, $9.99 for $25+ and added $2 for international. I also gave an additional dollar off for each additional item as a buying incentive. Now a few buyers are not going to like this and they might complain to you that your shipping is too high. I dealt with them in agreement to some advice that my first wholesaler gave me and that is that is my price if you don’t agree to it than don’t purchase it.
If the buyer decides to bid or buy it now they are legally obligated to that contract and if they fail to pay are subject to collection of all fees subject to that listing and should be handled by filing a non paying bidder final value fee reimbursement. EBay doesn’t like to lose money and strikes their account. A couple of those and the account will be suspended from EBay. Now you can always bargain if your sales are inefficient but once your sells are decent enough you shouldn’t have to. It is usually these buyers that cause most of the complaints that you have to deal with so better to not deal with them in the first place in my opinion. I would suggest that you always be professional, fair, polite, and stern for all policies regarding your listing. This is your business don’t let yourself be taken advantage of by buyers or they most likely will walk all over you.
Volume can control and dominate your life if you’re not prepared.
I’m sure many of you can recall reading one of Marsha Collier’s outstanding information guides. I have to say that the most memorable thing personally for me was when she talked about how volume really wasn’t the answer! She improved her strategy to get free from the volume trap by creating passive income. I have to tell you all that this is so true! I have since I was a little child tried to take on more than I can handle without implementing or asking for help when I really needed it. How much do you really want to work? Well I would say a typical 30-50 hour range is acceptable for a full timer. My auction site on eBay was getting 100,000 hits a month before I closed it in August and I was breaking $20,000/month on eBay in addition to my wholesale volume from Dallas retailers! I think it was a disguised blessing from God that I experienced a transition from eBay because I had no life anymore and miserably worked 80+ hours a week. I was making a ton of money with net sales of between $10,000-$15,000/month but of course I also would consider myself obsessive compulsive when it came to my business so I only took what I needed to live on out and expanded my product line.
I didn’t want to take the time to hire help because if any of you have done this before you all know that a good employee is worth their weight in gold. If you want to have no social life or free time than you might just be able to pull these 80 hour work weeks off for a while but usually there comes a time when your going to need help if you want to continue your success. There are a number of ways to do this the first is to hire employees to ease your workload. Another one closely related to Marsha Collier’s passive income strategy is more dynamic by creating informational rich websites/stores that link those products listed by you on your domain to one of your partners that in turn pays you commission also known as affiliate marketing. A final alternative is to use a drop shipper but be very careful to test the tenacity of these suppliers before you rely on them. I used only one company to drop ship products and they are actually a manufacturer that did it for me as a favor. I have a drop shipping program for a select number of my online sellers that I give real wholesale pricing to but unfortunately its only a handful of people since I don’t want to be a shipping manager 80 hours a week again. Please be good to yourself and your business by outsourcing your work to reliable partners and employees.
Never overlook opportunity and always be willing to learn!
I honestly believe this is one of the most important lessons anyone can learn and that is to not let your pride blind you from learning from those with wisdom. I am still learning new strategies, tips, tricks, etc. everyday from all sorts of different people. One of the most valuable experiences of my life that led me to the Ecommerce business was the opportunity that it processed. I first came to this realization at the local flea market at Grand Prairie, Texas where I first sold my lighters. The people there are absolutely fascinating, although they might look poor, and appear like they barely make it. They have some of the best attitudes and looks on life that I have ever encountered. They believe in what this country was all about and that is the American Dream. I truly believe that anyone can be as successful and happy as they desire with only their minds to limit their ambitions. I challenge you to go to a flea market if you have not already done so and watch these people. You would be surprised that many of these people make very impressive incomes with some better than many business executives. If you really do desire success and your willing to put your full tamasity into your dream I have no doubts that you can and will make it!
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