Work Smarter Not Harder Part One...& Two

With all the changes taking place, many people are not sure what to do with themselves. In any event, no matter where you go, there are ways to give you more free time, less stress, higher profits and better sell rates.

This is a guide I wrote on eBay awhile back. I have updated it and changed some things to stay current with some eBay changes.

I am willing to share our metamorphosis on eBay over the past years so others can learn from the ever changing venue.



Learn from other's mistakes without making them yourself....


This part one includes:

An introduction to us and our success, what success means for you, how we got started, and the hard questions everyone needs to ask themselves to be on the right ebay track.


First; let me tell you a little about us. My better half and I are 8+ year full time sellers. We have been Silver Level Powersellers for a few years now. We started on ebay as buyers and sellers before we even knew each other, so our experience goes way back. This is my personal buying ID. We have a different ID for selling. Why am I not using our seller ID for this review? Well, we love ebay, but ebay has its kooks.

Now, unfortunately I can't answer all questions or provide a full on fool proof tutorial for everyone. imply do not have all the answers for everyone since what works for one does not or cannot work for another. I can't tell you what to sell or where to buy it. Different people have different things available to them, etc. But I can pass along some very important tidbits that are 100% vital to being all you can be on ebay.

If you are already well versed or practicing the below tips, wonderful, you are definitely on the right track! If by chance you are not doing what is mentioned below, please, definitely take the advice to heart. They are key actions that helped make us as successful as we are. We could not have gotten this far without these actions.


YOU GET TO DECIDE ON WHAT SUCCESS MEANS...

Success mean different things to different people. For us; we have basically acquired what we hoped we would get out of ebay when we started years ago. However; we always try to improve, expand our knowledge and other selling venues as well. But we are at a level we are happy about and gives us a large amount of freedom. I know many of you would like this too, and this is why I am going to share secrets that many people simply do not know or practice but could change the ebay experience forever.

I know it isn't hard to hear tales of how people can make lots of money fast and easy on ebay. There are tons of guides, books, etc that tell you that if you just pick an item you love to sell, pick a wholeseller, you are on your way to quiting your day job being rich! That is a lie. I don't want to burst any body's bubble, but I hate seeing people start up cute IDs and list the same stuff that ebay is already saturated with and end up losing on inventory and ebay fees. Just because you work hard, just because you ship the same day, just because you have cute bumble bees on your auction, just because you sit at the computer 24-7 to email every customer right back, just because you wrap everything in lilac scented tissue paper, gift card and bow, DOES NOT MEAN YOU WILL PROFIT FROM EBAY. All the good intentions in the world will NOT make you money. It comes down to what you list, what you paid for it and what the ebay buyer / seller ratio can handle. PERIOD......

So.... Let's be honest for a few minutes, ........................................ebay = work + knowledge.


How did I start, where do you start?

I personally started selling things from my house, things from the Dollar Store, 99¢ Store, TJMax, thrift stores, you name it. I started at a time I could truly put up anything and make some money at it. I have always been a savvy shopper. I knew good brands, etc. I could buy 10 things at a dollar store and make $60 off of it...not bad for a part time hobby.

Within a couple of years; that market become over saturated with sellers due to new stores opening up all over the country, wholesalers popping up and more stay at home parents, etc. listing the same things I was listing. I rarely list items I buy at a store now and I am constantly amazed at the amount of sellers who keep trying the old business model but are clearly working for ebay, paypal and shipping companies and not for themselves. Bottom line; any wholesale items being offered on ebay are always in danger of running their course, already being offered by 30 different sellers or they simply will not have enough of a buying market on ebay for a long term hall. It is not as easy as picking a wholeseller of something you like and selling it. Ebay means research.


After this shift in the ebay market; I had to ask myself........................What did I want out of ebay?


I wanted to be able to sell things that would make me a good profit. I wanted to be able to list at my convenience and stay at home so I could care for my 4 kids, 3 on the Autism spectrum. I wanted the freedom to be open for doctors apt, school events, or a nap. I wanted to shop and make money at it. I wanted to pretty much do as I wanted with most of my time and have the money rolling in while giving people things they have a hard time finding or at a price they are thrilled to get the item at....and I wanted to ENJOY what I did.


The hard questions I asked myself were;

What is my time worth? What kind of profit was I looking for my time? How much would I have to make to cover my bills and some wants? How much would I have to make in profit to truly rely on this one source of income for the future? Am I sure I want to put all my eggs in one basket? What were all my costs involved in hunting down, picking up, safely storing, having a good camera for pics, taking the pictures, uploading editing pictures, picture storage, having a good and easy listing program I could count on, creating a listing, doing research on the ebay market on what the item would go for, handling emails, accepting payment, supplies to pack, labor and time involved with packaging the item and then shipping the item. ....TIME IS MONEY.

Do I have access to one thing that I can sell for a long period at a high profit margin that I can easily ship or do I have to diversify? Where can I go to hunt down things to sell? How will I know what will sell and won't? What about selling items that don't fit in flat rate free boxes? Where am I going to get packaging supplies at a low cost so my shipping stays low? When will I go and hunt down these things? Do I want to be one of those low Buy It Now people and charge more for shipping to save on fees or not? Do I know how to properly pack something I am not used to packing? Will I have to buy in bulk and store it, but not too much in bulk because I want to make sure the buying market doesn't dry up or have it take over my house? Am I going to have to borrow money for start up to get things at a lower cost to even make a profit? What do I have knowledge about? ......................................................................What is my competition on ebay?


I quickly realized there was a lot more to ebay than people said! I also realized I would have to change my business model in order for ebay to give me what I wanted out of it. I was not looking to spend hours and earn $5.00 per hour. I was not looking to list 20 items and have 5 sell under the price I paid by following ebay's recommendation of starting everything at 99% and letting it ride ...to encourage bidders of course.....Are you?


Has anyone taken the time to punch in a key word of a normal wholesale item like Gameboy and seen how many things don't sell or sell at 99¢?? Go searching through the collectible categories and you will see the same things. And guess what? We have changed parts of our business model many times through the years to consistently stay successful on ebay.


And that is what you will have to do for you. Every set of answers will be different for every person. That is the beauty of ebay....you do have the power of deciding what you want out of it. So ask yourself these questions and then go from there. You might find ebay is not right for you or you might find you have been sitting on a goldmine and never even realized it. But with good advice, and facing the hard facts; you can find out if ebay is right or wrong for you without losing tons of money in the process.

The answer to my questions for me? Well, I have a better half who loves treasure hunting more than I do. Together we hit apx 100 private and public sales a week. We list a few items a day and the rest of our time is spent running the house, kids, life, etc. Let's not forget, we still have cleaning the items, pictures, packaging, etc. WE DO WORK. But this is also our hobby and we enjoy it and each other. This is what works for us. Your answers may be very different.

This is the biggest & most important tip that will always apply to ebay no matter what you want out of ebay..........

Research, research, research and research. ...............................................Did I say RESEARCH????

In case you do not know; ebay only has an apx 40% sell rate. That means out of all the millions of items that get listed on ebay daily, only about 40% sell....and that does not include non paying bidders. Every time anyone lists an item without doing research on the sell rate and what it will sell for, they are working for ebay and Paypal. ...................................................Is that what you want?

In early 1999, when I first got started with ebay, ebay had around 700,000 registered users. **Keep in mind, this means IDs and it is perfectly ok with ebay if people have more than one ID. So the term registered user is NOT in any way a good indication of actual people using ebay on a daily, weekly, or even monthly basis** The ebay market was adding apx 70,000 auctions a day. At that time ebay said there was about a 75% sell rate....not anymore. There are now over 1 million items listed daily on ebay and about ........

60% DOES NOT SELL............................................................How will you be different and succeed?

If you do a google or ebay board search of past or present *about ready to quit because ebay has died* ebay sellers; you can quickly find many stories of people who quit their day job and were successful on ebay once upon a time but drowned in the ever changing market...constant planning can mean the difference between ebay life or ebay death. These stories have many dates on them through the years and the one thing in common is that they all blame ebay and the changing market. Stories from the years 2000, 2002, 2005, etc. Well, how can all these stories from different years be from the same ebay reason?? Easy, ebay is a consistently changing market and you have to change with it or you will lose.

Now at this point and time this change can also mean seeking out other venues. Do you really want to have all your eggs in one basket? Do you really want to be subject to a very bad business plan that you have no control over?

There are selling options. All business take work...let's just work smart.

Some categories are worse then others:

Many categories like handbags, makeup, clothing, shoes, DVDs, electronics, CDs, etc have about a 10% sell rate. That means for every 100 items listed, 10 will sell..but do they sell at a decent profit to the seller? Usually, no. Why would anyone list without doing research? Why would anyone think they could succeed when the market clearly shows they will fail or be working for ebay and not themselves? How do people trick themselves into thinking they should continue?

If a certain item is not for you due to what you can get an item for and what the ebay market can handle, no matter how much you love it, move on and keep searching. The bottom line for most people is profit. If you blindly list items in hopes that they will sell at a price to make you money, you are being foolish, yes, foolish. Day upon day I see people listing things that clearly never sell...yet they keep listing away. WHY????

If the item is not worth listing......................................................................................................... WHY LIST IT??

Down to basics.

Ebay has an amazing check box feature, called "completed auctions". You will find it on the left hand side of a search page.

Ebay also has Marketplace Research for $9.99 per month and up that allow you to go back farther than a two week period. There are other online venues to research what the market is doing as well. .......................................................................................USE ONE!

More About Marketplace Research

How do you use past research?

Well, 99% of the time you will not be able to get a true ebay sell rate picture by looking at current auctions. I cannot tell you how many times we have met someone who says they set the price for their item by looking at ebay and seeing it for a certain dollar amount. What they did not do was look at what the item actually sold for in completed auctions, what the percentage is of sold items compared to non selling, and what the highs and lows are. Just because something sold once for a certain amount does not mean it will sell for that again. Just because someone is asking a certain dollar amount for an item, does not mean it will sell. We have walked away from hundreds of sales due to people doing this. They just did not really know what their item would sell at, either locally or online. You have to look at the entire picture to determine what a good selling price will be. Was the high selling item a f look of frenzied newbies? Did you miss the boat of the handful of people wanting that rare widget right before Christmas, etc.

So the best thing to do is use an ended auction program and look over the past two weeks, month, etc. High to low, low to high and percentage sold. You gather that by eyeballing the info compared with the timing, condition, what is included in the auction, etc and possibly how many people already got that widget and then you can begin to understand if your item will sell at the price you want.

Are you a risk taker by letting items ride, starting at 99¢ hoping for a grand slam?? Well, those are rare and far between...but if you love the excitement and do not care what you will get for your widget, go for it. Otherwise a very good option is to pick fair Buy It Now price, and go forward.

Careful Listing

We are careful with what we buy and we won't list anything without a 90% chance of selling first time out with a profit margin built in. Our profit margin is made at the time of purchasing. If we do have an item with a lower sell rate, say 50% but at an amount that is worth selling, say $30 and I paid $5 for it, we just make sure it is marked at a price that still makes us money to move it and put more working funds back in our pocket, say $23.00. You have to ask yourself if it is WORTH YOUR TIME TO LIST.

Let's say I go to an auction house and I buy 3 widgits. I buy two widgets at $10 each that I know sell on ebay at $150 minimum every time. *** YES, this does happen *** This gives me some freedom to buy an item I don't know much about since I know I have already made a profit on my other two. I see an interesting widgit for $5.00. $5.00 is an amount I will never miss. So if I have to throw the item out, I chalk it up to $5 worth of ebay knowledge. I get home, use google, ebay, etc and realize my widget is only worth $10.00. Do I list it? The answer is no. After paying ebay fees, paypal fees, the time to list, etc. I won't be making any money. I chuck it or donate it. This is how we keep our profit margin high and time uncluttered allowing me to use my time to make a profit, not break even. If you sell 10 items on ebay, you have hopefully profited off all 10. If you list 10 and sell 5, the other 5 listing fees cut into the profit margin of the 5 you sold. Simple math but very important math.

Research again; I see sellers all the time list something with a buy it now in an amount that is truly pennies for what they could have gotten for it. They *guessed* what they thought it was worth and they shot themselves in the foot. A little research would have put a lot more money in their pocket. Research keeps you from losing. It also keeps the ebay market healthy. Undercutting other sellers by large amounts just hurts the ebay market and other good sellers in the long run.

Research again; On the same note. I frequently see items that are way overpriced for the ebay market. I can think of a few brand names that get listed and the sellers think that if there item was $200 at Macy's, surely they can get $100 on ebay....umm...no..many times it would be luck to get $25.00. Wishing something would sell will not make it sell. Being new, will not make an item sell. Needing money will not make an item sell. Research will make your item sell or free you from the money and time wasted in listing a useless item.

When we go to a sale; seriously, out of 2000 items, we may walk away with nothing, or one, two or three things that we would want to list. It comes down to collectability, condition, want and cost to us. Due to careful consideration; our sell rate stays right around 90% if nothing whacky has been announced by ebay. Our total ebay and paypal fees usually stay under 15%.

Example:

Powerseller One sells in decent volume, so it seems, and many want to be just like him. He sells items in the $10 range that are also saturated on ebay. These could be jewelry, make up, accessories, children's popular clothes like Gymboree, Gameboy accessories, etc. This seller lists 1000 different widgets a month, basically 250 a week and sells 400 of them per month...impressive. 400 x $10 = $4000, sounds great!

Let's break this down under the new and old structure.

1000 widgets x 35¢ listing fee = $350 in listing fees. Old structure would have been $600 if gallery was used. Savings of $250.00

However, seller one did not sell 600 of those widgets and each auction still cost 35¢ to list. This estimate is based on ebay's normal - average 40% sale rate. However; I am being very generous in giving the 40% rate because many categories fall way below that.

600 x 35¢ = $210.00 lost in listing fees. = Would have been $360 under the old structure. Savings of $150.00

The listing fees for the 400 that sold = $140.00 = Old structure $240. Savings of $100.00

Ending value fee is now 8.75%, used to be 5.25%. 400 sold items at $10 = $4000 x 8.75% = $350. Old Structure = $210. Increase of $140.

Listing fees for the 1000 = $350

Final Value for the 400 = $350

Grand total of $700 in listing and final value fees for only selling 40% of stock.

Under the new structure; those that sell $10 items can come out ahead, much better than before; however, one still has to ask themselves how much time and money is involved in a $10 item....and...with new final value fee which went up 66%...

Out of the $4000, you know have a minus of $700.00, when before it was $800 in ebay fees. So this volume seller is saving $100 overall with the new system in this scenario.

$4000 - $700 = $3300 after eBay fees for those 1000 listings.

Let's not forget Paypal charges ...

Receive payments funded by Credit Card, Debit Card or Buyer Credit 4.9% + $0.30 USD (limit of 5 transactions per 12 month period)** for domestic or U.S. transactions.

400 widgets x .30= $120, 400 widgets x $10 ...let's say NO shipping = $4000 x 4.9% = $196. $120 + $196 = $316.00 in Paypal fees.

$3300 is the amount after ebay fees- $316 in Paypal fees =$2984.

$4000 total turns into $2984 in sales. Plus he offered free shipping. Lets be super generous and say this seller can ship for $1.00. 400 items x $1 each is another $400. $2984 in sales - $400 in shipping fees =$2584.

We now have an estimate of basic ebay / Paypal costs for listing 1000 $10 widgets with free shipping, with ebay's average sell rate.

Let's not forget the seller paid $3 per widget. Many people would be thrilled to have a this markup ability. $3 per widget x 1000 = $3000 in inventory. Which means, at this point, the seller took a loss.

Now, in our heads we want to justify this and say this can be the cost of starting a new business...and you are right..however, as a little guy...can you do this and not have another job over the long haul?

Let's not forget the seller puts in 8 hours a day to inventory, pictures, auctions, emails, invoices, packaging and shipping.

What started out as a $4000 in sales Silver Level sales volume quickly dropped into a loss for this set of sales. The seller will have to sell the 0ther 600 next time around to profit..and each time, fighting against that 40% sell rate and fees.

This is a REAL business model folks and happens daily on ebay.

This does not take into account the time he has spent picking out his items, research, etc...all the other little time stealers ebay is known for.

IS THIS what you want?

Powerseller Two focuses on a wide variety of collectibles in an area he has gained knowledge on over the years while selling on ebay. He spent 6 hours over the weekend picking them out at different places. He carefully lists 59 items he has found to be sure things on ebay in a profit margin that pays him for his time over two weeks, half the time as Powerseller One.

Sell rate = 59 listed 43 sold in two weeks. Basically 73% sell rate for the period.

All the items sold were between $25 and $150.00 each = $2500.00 for the period.

Listing / ending value fees vary depending on the item but this seller's total ebay fees always stay under $400 per month due to careful listing- 1/2 the month = apx $200.00. Paypal is the 30¢ plus 4.9% per payment. Usually this averages about $2.50 per item =$107.50.

Let's do the math

$2500 - $200 in ebay fees for the two weeks = $2300 - $107.50 in Paypal fees $2192.50.

The other part I haven't mentioned? This seller only spent $145 for all this stuff. $2264 -$145= $2047.50.

Seller also spends an average of working 4 hours per day.

This seller is making 3 TIMES the money in half the time.

This is also a very real business model on ebay folks..............Who would you rather be?

It isn't about listing and selling on ebay. It is about listing and selling SMART.

Now certainly my goal here is not to pick on anyone. However. this is about business. And in business emotional feel good thoughts need to be put aside and the bottom lines need to be looked at. You cannot tell me the first business model is a well thought out and planned goal for the smaller seller.

Which Brings Us To Another Important Factor =Fees:

Know ebay's fee structure! It costs 55¢ to list an auction item at $10.00 but it only costs 35¢ to list an item at $9.99. Be careful and list smart! ** Media itms slightly lower.

Ebay Fee Structure Page

Another reason why fee structure knowledge is important? The higher the item sells for, the less money you pay out.

Research shows an item has to sell at $10 or higher to even make a slight profit and this depends on what you paid for it.

Ebay's percentage drops 5.25% on items over $25.00. This means that if you list items that sell in this higher range, you keep more of the money.

Example:

Seller One lists / sells everything at $10, pays 55¢ per item for a listing fee and 8.75% ending value. He lists 10 items to make a total of $100 in sales. Total of $5.50 in listing fees + $8.75 ending value= $14.25. This does not include Paypal fees on ten items. Even if the seller knew to list at 35¢ by starting at $9.99, he would still be paying $12.25 in fees.

Seller Two lists / sells two things at $49.99 for a total of $99.98. Two listing fees of $1.00 = 2. + two ending value = 1st $25.00 at 8.75% and the rest at 3.50% = $6.12. This does not include Paypal fees on two items.

Now, this guide is certainly not an attempt at putting anyone down. If the business model works for you and you are getting paid well for your time, wonderful. This guide is about knowledge and making the right choices for you, whatever those are and to avoid being sucked in the addictive pitfall ebay can become and has become for thousands of people.

Last but certainly not least;

Your customers want to hear from you. They quickly want to know how much their total cost is, if you got their pay ok, when the item they have paid for will go out, when it has gone out, with a tracking number and a thank you.

Your customers want to see what they are interested in with clear pictures of the item, not stock photos.

Your customers want an easy way to pay.

Your customers want the item in the condition you are advertising the item is in.

Your customers want fair shipping and nice / clean / safe packaging.

Your customers want a quick turn around.

Treat your customers like you would want to be treated and you will go far.

I hope this has helped with your ebay or other venue journey.:)

If you are serious and do your homework wisely, you to can accomplish what you want out of ebay. But it is not easy and it is not fast. DO NOT quit your day job. Building a business from scratch takes time.