Best Practices: Tips for your small business
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Improve your eBay margins
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Tell us your eBay business tips.
Tell us your eBay business tips.
Once you've mastered the basics of selling on eBay, you can improve your margins by streamlining operations, getting rid of products that don't sell well, and using good auction software.
Doing business on eBay is one thing; increasing the money you make there is another issue entirely. Once you've mastered the basics--optimizing your auction length and starting price, for example--how do you take your eBay business to the next level? Use these tips to move more products faster and keep more profit.
1
Automate as much as possible
Robert Frechette is the owner of Gilbert & Frech, an eBay store that sells gems, custom jewelry, and beading supplies. He uses e-mail templates for different situations--such as customer service and warranty inquiries--as well as automated shipping and invoice systems with third-party software.
Robert Frechette is the owner of Gilbert & Frech, an eBay store that sells gems, custom jewelry, and beading supplies. He uses e-mail templates for different situations--such as customer service and warranty inquiries--as well as automated shipping and invoice systems with third-party software.
"Always think of your eBay business as a process," says Frechette. "Think about how you can streamline your processes to push data to eBay faster and complete more orders."
2
Auction management software speeds up sales
Auction management software can help you release bulk listings, prepare nicer-looking HTML-based copy without coding it, easily manage customer feedback, and more. "I'll never forget our first major weekend using eBay," said Carlos Antonorsi, owner of LaserCorner, an online DVD and CD eBay store. "After we started listing in bulk, we just sat on the floor with all the DVDs and said, 'Now what do we do?'" By using ChannelAdvisor, an auction management package, Antonorsi went from selling 20 DVDs per day to selling 300 per day within a few months. PayPal has some basic tools, but for a more robust solution, you'll want to check out third-party alternatives, such as MarketBlast or kAuction. There are two categories, bidding and sniping tools, which are more for end users, and auction management tools, such as the ones we're discussing here.
Auction management software can help you release bulk listings, prepare nicer-looking HTML-based copy without coding it, easily manage customer feedback, and more. "I'll never forget our first major weekend using eBay," said Carlos Antonorsi, owner of LaserCorner, an online DVD and CD eBay store. "After we started listing in bulk, we just sat on the floor with all the DVDs and said, 'Now what do we do?'" By using ChannelAdvisor, an auction management package, Antonorsi went from selling 20 DVDs per day to selling 300 per day within a few months. PayPal has some basic tools, but for a more robust solution, you'll want to check out third-party alternatives, such as MarketBlast or kAuction. There are two categories, bidding and sniping tools, which are more for end users, and auction management tools, such as the ones we're discussing here.
3
High volume often means more profit
Antonorsi says to focus on selling more products instead of negotiating with suppliers, which can be too time-consuming. "Say we find a closeout opportunity, buy some merchandise, and put it on eBay," Antonorsi said. "We sell 90 percent of that product, and we make good money on that product. But we can't sell 700 DVDs a day with that model alone, because we'd have to have 10 people just looking for merchandise."
Antonorsi says to focus on selling more products instead of negotiating with suppliers, which can be too time-consuming. "Say we find a closeout opportunity, buy some merchandise, and put it on eBay," Antonorsi said. "We sell 90 percent of that product, and we make good money on that product. But we can't sell 700 DVDs a day with that model alone, because we'd have to have 10 people just looking for merchandise."
4
Go for low-cost shipping in bulk
To cut down on customer shipping requests, purchase all of your supplies cheaply from a warehouse, such as Uline, and use shipping services, such as UPS Mail Innovations. Once you have a large number of packages, you can send them to the service, and the service will do all the metering.
To cut down on customer shipping requests, purchase all of your supplies cheaply from a warehouse, such as Uline, and use shipping services, such as UPS Mail Innovations. Once you have a large number of packages, you can send them to the service, and the service will do all the metering.
5
Steer customers toward e-mail, not phone
Frechette advises against taking phone calls, because eBay is typically a low-margin sales channel. "Phone calls and online chats might be fine for a low-volume seller, but any phone conversation we have ends up taking 15 minutes. With low margins you can't afford to do that."
Frechette advises against taking phone calls, because eBay is typically a low-margin sales channel. "Phone calls and online chats might be fine for a low-volume seller, but any phone conversation we have ends up taking 15 minutes. With low margins you can't afford to do that."
6
Cut poor sellers from your inventory
"The fact that you find a DVD for $2 when it retails for $15 doesn't mean you'll sell it," advises Antonorsi. "There's rubbish out there where even if you list it for a dollar, it won't sell," he said. Frechette agrees. "You always hear 'what can I sell on eBay?' It doesn't matter what you sell. If a product doesn't sell or if you don't make a profit, don't buy it again."
"The fact that you find a DVD for $2 when it retails for $15 doesn't mean you'll sell it," advises Antonorsi. "There's rubbish out there where even if you list it for a dollar, it won't sell," he said. Frechette agrees. "You always hear 'what can I sell on eBay?' It doesn't matter what you sell. If a product doesn't sell or if you don't make a profit, don't buy it again."
7
Analyze your transactions for maximum net profit
Frechette uses a Marketworks system to download every sales item into a Microsoft Access database, along with the quantity sold, when it was sold, and the profit they made on it. "For every item we sell, we do a biweekly report and we share that information with the people we work with," Frechette said. "This way I can say, 'Here are some really good designs we sell. Let's change the design in this way so that we can sell more.'"
Frechette uses a Marketworks system to download every sales item into a Microsoft Access database, along with the quantity sold, when it was sold, and the profit they made on it. "For every item we sell, we do a biweekly report and we share that information with the people we work with," Frechette said. "This way I can say, 'Here are some really good designs we sell. Let's change the design in this way so that we can sell more.'"
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