Friday, June 20, 2008

Some notes on eBay auctions and sales

Some notes of note - what I've found out recently from eBay.

You may have noticed a gap in my posts. Because I've been busy working on eBay selling stuff.

General strategy I've been using is to create and sell info products. Either my own or public domain books which align to my books.

These sell pretty well in general on eBay, but there is a learning curve to making these happen.

Analysis tools you are going to need:
  1. Get a copy of HammerTap - not the old "Deep Analysis" which is still floating around. This is a subscription service.
  2. Buy a lifetime subscription to Worldwide Brands to find your drop ship and wholesale suppliers. They do their own analysis and so this also then helps you.
  3. Auctiva has a tool called "Sellathon", which looks to be an interesting tool, giving you logs of who's looking at what and for how long. So you can then figure if its price or sales pitch driving them off. (I haven't gotten this yet, beyond the free trial, but am leaning in this direction - it's another monthly investment, while I don't have real returns from my earlier credit card dings.)
I did finally get (paid for, not found as a "free bonus") a very good PDF called "Simple Market Research", written by an un-named someone who used to work for Worldwide Brands as a researcher. It's simply written and very sensible. Here's a summary of useful tips:
  • Don't buy anything before you research first. Save up your money meanwhile to invest where you need to. Also means: keep your day job, but save for your dream job.
  • Real wholesalers and dropshippers don't charge monthly fees. Such fees mean these also-rans' business model is based on subscribers, not low prices and volume business. You are paying for the experience. (Worldwide Brands charges you a one-time hefty fee for access to their database - and then work to upsell you to other services, fair enough. This also keeps out the freebie-seekers, who aren't serious about really using their tools.)
  • You work from the dropshipper toward the sale, not "what's hot" and then back to who can supply you this product at a profit. What you are doing is finding a dropshipper in a viable area (lots of sales overall) and then figure if what they are offering actually moves well and you can make a profit at it.
  • Work from potential profit backwards, not from what you "love" to make money at. Reason being that you are selling, not buying. Successful selling is from a detached viewpoint - meaning the world won't cave in on you if no one buys your creation. Straight merchandising. ("Simple Market Research" has a free software tool which can help you figure out profit based on what the market is bringing and eBay fees, etc.) Lots of research to do here.
So you use the tools above to find what you can sell and what will make you profits.

Simple Market Research (SMR) has more on this area, in terms of selecting niches. You're going to have to roll up your sleeves and figure this out - working in areas you know to begin with, but also being willing to take on areas and become a mini-expert in them. (Like one guy found out all about portable air conditioners when he couldn't find decent data on them online. Now he sells them via affiliate links.)

I differ from SMR in that I say don't spend money on advertising to get your traffic unless you know this area (and are a bit of a nerd for this type of thing - some people aren't wired that way and can't get it to work for them). There is tons of ways to promote, especially through social media (which gets you top rankings on Google) without having to continually pay for people to come to your site. Less overhead, better traffic. eBay is one such promotion tool. Put loss leaders up on eBay and then get them over to your site, as well as sending them emails from your autoresponder.

Means you're going to have an ecommerce site sooner or later. You can make money on eBay, but the real deal is being able to cross-sell and up-sell that new client and turn them into returning clients. When they look for something in (niche) they look to you first.

Simple Steps to Finding a Profitable Product to Sell

1. Find an itch to scratch - like the air conditioner scene above, look for something that you need or you think people need.
2. Find a supplier for it - use Worldwide Brands to see if there is a wholesaler that can supply it. Save that supplier to your list (requires you buy their service).
3. Repeat 1-2 above until you have a list of probable suppliers for stuff you are interested in.
4. Take key items and look them up on HammerTap (another subscription) to see how their action sales agree with Worldwide Brands (who gives you analysis data which isn't just based on auctions).
5. Keep notes as you go - you are narrowing down the broad scene into just a few you can get started with. (When you auction more than 14 items at once, there's some sort of critical mass which takes over and your overall sales go up.)
6. Sign up with those dropshipping wholesalers to find out their prices.
7. Compare these with HammerTap to find out if you can sell these profitably. Means you are going to have to get all the eBay fees estimated, including final value fees, PayPal fees, plus any dropship fees that wholesaler has. You don't sell something that won't bring you any profit. Loss leaders are a form of promotion - we aren't there yet.
8. Now you can develop all the keywords you need for these, and build your sales page, etc.

This differs in sequence from SMR, in that I don't think that you need to find out a great deal about keywords unless you can prove that your product is going to make you money. Most of his use of keywords segues right into PPC advertising. I'd use keywords to write your sales copy and titles of your promo/web pages.

Simple sequence:
A. Find something that you can sell at a profit for someone else.
B. Figure out how to promote it.
C. Set it up to sell on a continuing basis.
D. Review sales and promotion; tweak to make more profitable.
E. Repeat A-D above and fill your ecommerce site with winners.

A) also means affiliates, not just wholesalers and dropshippers.
B) includes promoting through eBay itself, as well as social media and (ugh) PPC.
C) means you're going to have an ecommerce site and maybe even a brick-and-mortar storefront.
D) says you're going to find all about logs and metrics and analytics - plus be humble about your writing ability
E) means you're going to be an uproarious success.

As I can, I'll update these notes. One day, they'll probably become a book, but since the competition is so severe in this area, it's going to take far more homework before I commit much time to it. Right now, this research can help us both out.

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