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Beginners Guide to an eBay Business

Trading on eBay is ideal for women juggling motherhood and business at the same time as it allows you to work from home, set your own hours and be your own boss! Flexible working hours within a 24/7 trading environment allows you to spend more time with your kids when they are awake, and work when they are asleep.

eBay provides sellers with some valuable business knowledge and the ability to grow a business with minimum costs, but best of all, if offers people access to a worldwide marketplace. The secret to the success of eBay is the market size. There are over 100 million people worldwide on eBay. In Australia, over 2 million people log on to eBay every day. Where else can you reach over 2 million people at once with minimal investment? What shop-front has those numbers passing by? The number of people logging on is like having an entire country looking in your shop every day! eBay offers national and international exposure at a fraction of the cost you’d be paying if doing yourself. If you were to start our own website and sell directly, you could only hope to have one tenth of the business that you would get on eBay.

Most people begin selling on eBay by simply offering for sale items that are sitting around the house, not being used. Selling a few things from around the house and making a couple of purchases allows you get to know the buying and selling processes, and will also earn you some valuable feedback to launch your business with. Don’t be intimidated by all colourful, glitzy listings. Clear and complete listings in a basic format do sell well because ultimately it’s the product that matters most! Selling on eBay is as simple as creating an eBay account and listing a few items for sale. On the other hand, like any other business, building a successful eBay business requires research. 

What to Sell?

Whether you are importing stock, hand crafting unique pieces or selling secondhand items, selling items in an area that interests you increases the likelihood of you being better at it. Finding your niche may be trial & error. Don't be afraid to try different strategies, and remain flexible because as markets change you need to be able to adapt. Research items you are interested in selling to see what others of the same type are currently selling for and have sold for in the recent past. Be open-minded and do lots of research, many items that you might expect to sell for a high price turn out to be unpopular and many that you think are worthless are absolute goldmines!

Whether you are selling within a specific area or operating a mass online garage sale, sourcing or creating stock at the lowest possible price to return you the highest possible profit should continue to be your number one goal. Options for sourcing new stock include local wholesalers, bulk imports, retail sales, factory outlets and purchasing wholesale lots on eBay. Options for sourcing second-hand stock include markets, garage sales, op shops and auctions.

Believe it or not, everything is not already being sold on eBay. It’s tricky, but it is possible to find those items that are being searched for, but not being sold on eBay. Look at eBay's Want It Now section to see what people are looking for but not finding on eBay. Compare what you find with the number of those items found in previously ended auctions. You can do this by doing an advanced search of an item keyword. It takes some homework, but if you can find those items being searched for but not sold, you could clean up. You might have a window of about 2 months before others see the items selling and catch on.

Use the completed item search to explore the categories that you would like to sell in. See which items are fetching the highest prices and consider whether you could compete well with the existing sellers. Perhaps you can source the items cheaper and therefore sell them for slightly less? Perhaps you could list and promote you product better and establish yourself as the preferred seller of those items? Just because something is already being done doesn’t mean that you can’t do it more successfully. In some niche areas, such as vintage, antiques and collectibles, more competition works in favour of sellers as the increase in available items for sale simply attracts more consumer interest in their products.

Research your product to determine if it is unique or one of many. Buyers love to find unique items on eBay that are difficult or impossible to find elsewhere, items that will make them the envy of their friends. Promote this point with words in your title and description such as ‘rare’, ‘unusual’, ‘unique’, ‘one of a kind’ and ‘hard to find’. Highlight what separates your item from the rest and what makes your item particularly special.

Successful eBay sellers who meet certain sales targets are awarded a PowerSeller status. Watch these PowerSellers at work; if you can determine patterns to the strategies of these successful sellers trading in your target area, migrate their thought process and apply it to your own site. What works well for others, may work well for you too. However, be careful not to copy the images or descriptive text of others as they are copyright protected. 

Titles

Your title is your opportunity to entice browsers into your listing page. Place yourself in the shoes of prospective buyers and create a title that is going to make them click through to your listing page. When it comes to titles, don’t use fancy descriptors at the expensive of valuable keywords. Most people will not be looking for “cute” or “cool” items, rather, they will be using specific terms for their search. “NEW Red Leather Oroton Shoulder Purse / Handbag” is a much better title than “Cute Trendy Fashionable Red Purse” Keywords are crucial to your success and they should include anything that your prospective buyers are likely to be searching for. Make intelligent use of your space and don't waste it with exclamation points or asterisks. Browse similar items in closed listings to see which titles drew the highest bids in the past. Focusing on keywords, look at the highest priced items and compare their titles with the lower priced items. Note the keywords that show up consistently and award them ‘must have’ status for your future titles.

If there are abbreviations commonly used for your product, be sure to include them in your title. For example, nobody uses the term compact disc, but CD is the commonly used abbreviation. If both the abbreviation and the full word are commonly used, include both in your title to ensure that you capture all searches. 

Descriptions

As you have unlimited space to describe your item, sell it like a professional spruiker! Be sure to completely describe the item with the most commonly used terms. Include as much information as you know - the manufacturer, model, year purchased or year made, where it was purchased, color, pattern, material, size, weight, etc. History - does your item have a story or history that would be of interest to the buyer? You never know what people may be searching for, and you want your listing to show up in as many related searches as possible. In your research phase find out what the competition is telling them about your item/s and make sure you tell them more.

Always explain exactly what the item is. Don’t assume that because you have listed your item in the correct category, people will always find it. For example, this may sound obvious, but if you are selling a book, be sure to include the keyword “book” in the title. The word “book” is just as important as including the actual title and author of that book. People often perform searches from the front page of eBay without entering the book category, so a search done this way for a “Stephen King book” wouldn’t bring up your listing. Most importantly, don't forget to check your spelling otherwise your listing may not appear in any search results. If a buyer searches for "Brad Pitt" and you're selling a "Brid Putt photo"... your item will never be found!

Where possible, include the retail cost of item. Bargain hunters will be even more inclined to bid if they feel they are getting a great deal. If you list a brand name item, check on their website for the retail cost. Listing an $80 dress for $10 may bring in additional bidders.Always describe any flaws or problems with the item, posting a photo of it as well if possible. No matter how small the flaw is, be sure to disclose it in order to limit the possibility of receiving negative feedback when the buyer receives an item that has an unexpected scratch or bend.

Another important advantage of providing detailed descriptions is that it will minimise the amount of questions you receive from buyers, which will save you time replying to the same questions over and over. Outline your seller terms clearly in each listing. This includes postage methods and costs, when payment is due, payment methods accepted and your return policy. Again, clear policies listed at the end of your item description will save you from answering emails. 

Photos

A good photo is GOLD. Good lighting, pleasing presentation and a complimentary background are essential. Nobody wants to see your dirty dishes or Rover licking himself in the background. Yes, it has been done! A clean, pressed sheet or a drape of fabric works well as a background. Plain works best as “busy” backgrounds detract from your item. Presenting clothing and accessories on a mannequin or body form works best to display the shape and look of the piece. If your neighbour looks like Jennifer Hawkins and she agrees to model your garments for the photos, lucky you! However, be realistic, if your model is not all that attractive, she’s probably not doing the clothing any justice and your sales will suffer as a result!  Include as many pictures as you need to showcase the item. Two pictures should be the minimum, including one full image and one close up shot to show detail. Zoom in on your item as close as possible to use up maximum available photo space.

Listing Duration and Timing

Two very important considerations are listing duration and timing. eBay offers 3, 5, 7, 10 day auctions. A 7 day auction generally works best as the longer duration allows time to attract more viewers. Typically, a longer auction will gain more watchers and ultimately a higher selling price. In addition, a 7 day auction spans the entire week including the prime viewing weekend zone where traffic increases dramatically. This general rule may not apply in all product categories, so be sure to do some research into finding the best time to end items in your target area.

Something you need to take into consideration when posting your auction is that your starting day determines your ending day. Sunday is considered the best day to end an auction, followed closed by Saturday and then Friday. The most important timing factor of an auction is the actual time that it ends. Aim to have your auctions end between 9pm and 11pm Eastern time. The East Coast represents the greatest concentration of buyers and the period between 9pm and 11pm is the best solution to optimise their bidding, while still being effective in the other time zones. Ending listings at a convenient time for your buyers allows them to be online as auctions close. This increases the likelihood of a bidding war occurring on your item, driving up the price in the last few moments. 3am is a great time to make purchases at bargain prices on closing auctions because most bidders are in bed, but it is a terrible time to end your auctions for the same reason. Also, always try and avoid having your auctions end on public holidays or when major events such as grand finals will be airing on television. 

Shipping & Handling

Always include shipping and handling costs in your listing as many bidders will bypass auctions when they see "unspecified" in the column where shipping is normally listed. It is time consuming for buyers to email a seller to find out what the shipping cost is, and if a potential buyer comes across the auction in the last few hours, they will probably pass up trying to email the seller before the auction closes. Offering at least three shipping methods is a good idea as it allows the customer to decide if they want the parcel insured, how quickly they want the item and what they are willing to pay.

Don't over-inflate shipping charges by including excessive handling fees. Handling fees should reflect the cost of the packaging, printing labels, ink, etc, related to the shipping of the item. They should not be used as an avenue for you to recover your eBay fees as buyers are likely choose another seller who is offering more reasonable shipping costs.  A one-time handling fee of $1.50, no matter how many items are purchased, is typically sufficient to cover all shipping related costs.

The easiest way to calculate shipping is to have a set of scales to weigh your items at home, and to use the postage calculator at www.australiapost.com.au to verify exact costs. This eliminates the need for you to take each item to the post office. Likewise, have packaging materials on hand at all times to save multiple trips to the post office. For unbreakable items such as clothing, many sellers opt to use flat-rate prepaid postage satchels, either standard or express. Because sellers can purchase them at a discount in bulk, they are efficient, cost effective and user-friendly as buyers can easily combine multiple items into them. 

Feedback

Feedback is very important in the eBay community. A seller’s reputation is contingent upon the level of positive feedback they have received. The trust of eBay buyer’s is secured by maintaining an impressive feedback record, both in volume and quality. The importance of feedback increases proportionately to the value of the items you are selling. You can still sell with feedback below 95%, but not as much for as much. The best window to be in is 98% and up. The higher the volume of your sales, the more negatives you are likely to receive as you will be exposing yourself to more unscrupulous and unreasonable buyers.  Leave feedback for your buyers promptly as the final step of your shipping process. If the customer paid for the item in a timely manner, he/she deserves a positive. If they end up leaving you a negative about something outside of your control, you can always respond to that neutral or negative feedback.   

Fees

When you list an item on eBay, you are charged an Insertion Fee as per the table below. If the item sells, you are also charged a Final Value Fee. The total cost of selling an item is the Insertion Fee plus the Final Value Fee. If you are selling items in high demand which are pretty well guaranteed to sell for a good price, such as mobile phones or designer clothing, it is a safe bet for you to start your listings at $0.99 for the minimum insertion fee of $0.30. This is a great cost cutting technique to significantly reduce your overall listing fees. Additional fees are charged for other listing features used to promote you items, including Bold, Highlight, Subtitle and Gallery. At a cost of $0.59 per listing, adding the eBay Gallery feature is a great investment as pictures do tell a thousand words! Gallery images appear as a thumbnail next to item titles. When buyers browse categories or search with keywords, Gallery items stand out in the list and let buyers see what's being offered without another click. eBay notes that on average, listings using Gallery compared to listings with no upgrades have 51% higher sales prices, 72% more bids and a 23% higher success (sell-through) rate.

A popular alternative to the standard auction format is Fixed Price listings which have only a Buy-It-Now price. The Insertion Fee for Fixed Price listings is based upon the opening value of your items. Buy-It-Now prices can also be added to standard auctions at a cost of $0.10 per listing, although once the first bid has been placed on the auction, this Buy-It-Now option disappears. The greatest advantage of Buy-It-Now listings is that it allows for quick turnover of stock. If you do choose to list your item as Buy-It-Now, be careful not to set your Buy-It-Now price too low. You may find that your item sells immediately and the savvy seller who purchased it from you immediately re-lists that item on eBay for three times what he/she paid you for it!

Closely monitor your ebay fees as they can easily mount up and cut into your profits. A turnover of $10,000 might attract eBay fees of up to $700.00 depending on the volume of listings that you post, your starting prices and the additional listing features that you use. A turnover of $10,000 which includes a small number of high priced items with basic listings can be as little as $100.00. It is much cheaper in eBay fees to list and sell 10 computers for $1000 each, than it is to sell 250 handbags for $40 each. For many businesses, eBay fees work out to be much lower that retail shop overheads. Many shop owners have closed their glass doors and migrated online, kissing vandals and shop-lifters goodbye! When they go away on holidays, their business can close without ongoing overheads to continue payment on. Alternatively, for short absences, their business can continue to operate without them.  

eBay offers online tutorials to guide new members through the buying and selling processes, and a comprehensive help section which allows you to search for answers to your questions by topic. There are also multiple discussion forums enabling you to post questions and collaborate with fellow eBay sellers. Be prepared to make mistakes, you will never stop learning! Building a successful eBay business is a journey of trying different things to see what works for you and what is not as successful. Ongoing research is essential. Take advantage of the completed items search function regularly to ensure that you stay on top of current pricing and what’s hot! eBay provides the mechanism, we just have to learn how to use it efficiently in order to maximise our business success!