Small Business:
Selling Your Products on eBay 
by Steven Presar

Thousands of people are making a solid living from selling goods on eBay and other online auctions.

Can you as a small business owner take advantage of this online marketplace? Can these online auctions be viewed as a new method of distribution for your products?

One of the best business models for this type of business-to-consumer selling through online auctions are antique shops. Local one or two person antique shops are finding nationwide customer base through online auctions.

Your business may not be selling antiques or collectibles but the business model may apply to your small business. No matter if you are a business-to-business or a business-to-consumer operation, take a look at how other small businesses are moving products through online auctions, then try to determine how their business model apply to you and your small business?

These online auction sites are enormously popular. They are high-traffic web sites that you can begin selling your products almost immediately. Online auctions have a ready made marketplace for many small business professionals to buy, sell, or trade products.

This online auction marketplace will generate an estimated $48.5 billion in sales by 2006 (Forrester Research). In this marketplace, the big guy on the block is eBay. It's among the most-trafficked of all sites on the Internet. Its closest competitor, Yahoo! Auctions is about only half its size, and Amazon.com Auctions is at a distant third. There are a number of other specialized online auctions that you find a ready made marketplace for your products.

In addition, the major online auctions have a "storefront" option within their site for individuals to setup a virtual store to sell products. 

Will Your Products Sell?

The fact is that almost anything can be sold through an online auction. In the world of collectibles, the best-conditioned items, the rarest items, the most sought-after items sell the best.

How does that apply to your small business products? You may have a lot of competition locally selling your same product line. However, your products may be hard to find or sought-after in another part of the country or world.

You know your products better then anyone. There is a basic fact that people shopping online auctions are looking for bargains and deep discounts. You know the products cost to you and their fair market value. Can you cover your cost and make a small profit to move your products outside of your locality. With an online auction, geography does not matter, you can ship anywhere in the world. If your products are only available in a rural area (i.e. - Vermont hand-crafts), would your products do well with people living in a urban area? The reverse may be true if your products are not available in rural areas.

Listing Options

How do you sell your products? Auction sites typically offer a variety of listing options for you to choose from, including:

1. Regular Listings:

The basic listing, you pick your category and your products gets listed there. While this is the most common (and really the least effective) way to list your products, you should definitely start with this option. You want to see the level of interest in your products before you decide to spend money on featured listings.

2. Reserve Price Auctions:

If you place a "reserved price" on your item, it means that you have specified the amount at which it should sell. This is done to prevent "auction sniping," which happens when bidders lay low until the very last moment, then grab your item without starting a bidding competition. Reserved Price Auctions can be to your benefit, but they may discourage bidders who are looking for bargains.

3. Dutch Auctions:

These are one of the best ways for people selling in quantity to place their products, because you can list multiple identical items at once in each auction. However, on eBay you must have a "feedback rating" of 50+ and you must have been registered for more than 60 days before you can choose this option.

4. Featured Items:

In most of the larger auction sites, you can get your item rotated through the site's homepage as well as listed in the "featured items" section for about $20. For about $15, you can have your item appear in your category's "featured items" section, or simply at the top of the list. You can also have your photos displayed in a gallery for only about 25 cents, or featured as a large photo at the top of a gallery for about $20. You also have the choice of listing for 3, 5, 7, or 10 days -- and, of course, you always have the option to re-list at the end of this time. The standard option is a 7-day listing with an automatic re-listing for a specified period of time.

Choose Your Category

Explore the product categories on the various auction sites to broaden your perspective of what goes where -- you definitely want to be specific, but you don't want to limit yourself.

While you are doing this, check out the competition in different categories and have a look at how much bidding is going on. The very best way to decide which category your products should be listed under is to do a search on similar and related products, determine which ones sell best, and see which categories they are in. You will usually be able to pick one main category and one sub-category -- use this method for both. Check to see how easily your products can be found using the site's search tools before you settle on a category.

Do not try to gain more exposure by placing your products in unrelated categories. Your online auction site will probably close your account if you do.

Create Your Listing

Once you've decided how and where to list your products, you need to turn your attention toward selling it. That means you must be able to write a strong ad for your products.

Think about your target market. Who's going to buy your products and more importantly -- why. You need to grab their attention and motivate them to buy. Start with a good title. It's really important that you're specific: instead of saying just "Flashlight" in your title, say "Maglite Solitaire Flashlight."

Don't assume that your bidders will understand you -- make everything as clear as possible for them. And make it as exciting as possible. You'll probably have to pay a bit more for special formatting like bolding or highlighting (one to two dollars), but these can be a good way to grab the attention of potential buyers. Use exciting and convincing words that draw the buyer to your item: "Unique Slim-Line Travel Alarm Clock."

The same techniques apply to your product description. Expand as much as possible on your product -- obviously, there's only so much you can say about a digital camera. However, before listing camera's capabilities, let the prospective buyer know that the camera, "Makes Digital Photography Simple" or that it "Takes the Perfect Photo Every Time".

Add your own personal story about your product. Include your specific motivations for using your product. Think about other ways you can motivate your bidders, can you provide money-back guarantees, free shipping, or a bonus products? Tell them what you have to offer! And don't forget about photos! People don't want to buy what they can't see, on average, listings that include a photo sell for about 10% more for the same item that is not accompanied by a photo. Make sure that you are NEVER dishonest in your product descriptions. You will never have any repeat buyers and you may get kicked off the auction site.

Establish Trust

The best way to establish yourself as a trustworthy, reliable seller in an online auction is by having a good feedback rating. A feedback rating is a listing of customer comments, rated as positive (+1), neutral (0), or negative (-1). If you are not trustworthy, your feedback rating will warn other buyers to stay away from you. If you have a positive rating, you can increase your sales by as much as 7-9% (and this number will steadily increase as the feedback rating system catches on).

Ask for feedback from your buyers whenever possible. Most auction sites make it easy for buyers to rate and offer comments on your service. Not only do you want to build a positive rating, you also want to show a large number of responses in order to establish yourself as an experienced seller.

People usually do not shy away from someone new to online auction selling. To ensure that you get a good feedback rating, make sure you always: list shipping costs (or additional costs) up front, deliver your products right away, deliver exactly what you've advertised, answer all buyers' questions immediately, and always follow up with great customer service.

Copyright Steven Presar

Steven Presar is a recognized small business technology coach, Internet publisher, author, speaker, and trainer. He provides personal, home, and computer security solutions at www.ProtectionConnect.com. He provides business software reviews at www.OnlineSoftwareGuide.com. In addition, he publishes articles for starting and running a small business at www.Agora-Business-Center.com.
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