Top 5 Mistakes eBay Sellers Make

Here is a list of the top 5 mistakes that I see many eBay sellers make.

1. Having a bad eBay account name- I can't tell you how many times I have seen crude and sexually explicit names on ebay or just downright disgusting names. You account name is part of your marketing strategy and having a name like stinkyfinger or bluevommit just doesn't make people want to buy from you.

2. Taking bad pictures- a picture is worth a thousand words and the last thing you want is a bad picture of the item you are selling. Many sellers don't take the time to take good pictures of the items they are selling and this hurts the prices that they get on their items. If you are going to take a picture make sure you have sufficient light and don't have strong shadows.

3. Using Stock Photos- This only applies to sellers of used goods. Using a stock photo as your only picture or not having any photos at all will significantly discount the item you are selling. Obviously if you are selling items that are worth less than say $10 then it might not be worth your time to take the photo. But for everyone else you need to have actual pictures of the items you have for sale.

4. Answering emails slowly- people act on impulses and when a buyer has taken the time to ask a question about your item, however crazy the question it might be, you need to respond quickly. Your response time conveys a lot of information to the buyer and if you are quick to respond you are probably also quick to resolve any issues that might arise during the transaction.

5. Failing to clearly post your return policy, shipping policy, and any warranty information in your listings- As a seller you need to put in all the relevant information about your items in a clear format so buyers can easily get answers to their questions. If you fail to do this you will definitely get many time wasted emails about your shipping policy and return policy. Save yourself some time upfront and answer these questions once, when you create your listing, and not repeatedly through email.

Will Facebook treat its developers like eBay has treated its sellers?

Much of eBay's success can be attributed to the thousands upon thousands of small mom and pop eBay sellers who helped start the site in the early days. These sellers helped eBay grow, and eBay wouldn't be where it is today with out them. eBay was reliant upon these sellers in the early days and because of this treated them for the most part fairly. By doing this, eBay was able to create a vast marketplace unrivaled in its unique content (you can find just about anything for sale on eBay). Nonetheless, as times changed and eBay's fortunes weren't growing as quickly as it would have liked, eBay began to squeeze these same sellers who helped make eBay what it is today. Many of these small sellers are now going out of business as eBay is making deals with large retailers like Buy.com, which disadvantages these many small sellers.

The reason I mention Facebook is that having been a small eBay seller who was squeezed by eBay, I see a possible red flag for many small developers making those quirky applications on Facebook (which can allow you to toss sheep at friends or play Scrabble). Although Facebook has opened up their site to allow developers to create applications, there are still many signs that Facebook will squeeze its developers as soon as it needs to keep its own fortunes growing. For instance, Facebook intermittently shut down the Super Wall application in the past month for a supposed violation of the privacy agreement (which reminds me of the time eBay pulled one of my listings for a listing violation). This is just a friendly warning to those developers spending lots of their time and money on developing these applications: as soon as Facebook needs to meet growth expectations or fails to make enough money to go public, your applications will be the first to feel the pain.

For eBay, it was just business as usual -- it needed to grow, and the eBay sellers were just in its way. For Facebook, the same thing is bound to happen -- history repeats itself, and it is unlikely that the big fish in the Facebook ecosystem, Facebook, is going to let other small fish live forever.

My only suggestion to the developers is to create a union-like organization that behaves similarly to PESA (Professional eBay Sellers Alliance) and try to negotiate deals with Facebook now before it is too late...

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How could sellers take down eBay?

This post is more or less an open forum for sellers to brainstorm and offer their ideas on how eBay sellers as a group could take down eBay. I will start the discussion with a couple of ideas that I think could be a good start for the discussion.

1. Create a free, seller-owned, non-profit, fixed price, eBay-like marketplace- The only stipulation for the site is that all products listed must be cheaper than the equivalent listing on eBay by at least the amount of the eBay final value fee. The reason is that since the site is free, the sellers must pass along the savings to the buyers to attract them to the site. I think an eBay seller-owned site that is "always cheaper than eBay" would be a great news/PR event that could help drive traffic to the site. It could be named something like minuesthefees.com or some other name that expresses its strongest value proposition: that it has the same products as eBay but they are just cheaper. My feeling is that most eBay buyers are attracted to bargains and would flock to the site. Maybe someone at PESA could organize something like this with all of the PowerSellers...

2. Create a free, open source, multichannel listing tool- In order to make it easy for all eBay sellers to list their items on minusthefees.com, we would have to have a listing tool that resembles Turbo Lister but actually works, that pushes listings to eBay, Shopping.com, etc., in addition to minusthefees.com. Maybe Craig over at Craigslist would let the tool push the listings to Craiglist as well -- or maybe Craig could help create the tool and help organize the marketplace. Another option could be to ask Scot over at Channel Advisor to put out a free version of CA's product that pushes items to just eBay and minusthefees.com, and then he can charge for adding the ability to push your items to other sites like your website or Shopping.com.

Anyway, those are my first few thoughts on how to get started. Please post comments on new ideas or on how to improve upon my suggestions. Thanks for reading and please subscribe to this post's rss feed. Also, if you do like it please bookmark/share it with one of the social bookmarking sites on the top right of the blog.

Should you change your fixed price listings to "pseudo" auctions?

I was recently looking to make a purchase on eBay and noticed the "Auctions Ending Soon" featured on my search results.(see the picture above with the horizontal results for auctions) It dawned on me that listing items in a fixed price format doesn't make sense any more. The reason being is that buyers are now being pushed to auctions in the search results and you want your listings to get that visibility.

Consequently, you can list your items in a "pseudo" auction format. For instance, you can list your camera for a start price of $300 and a Buy it now price of $300 as well. This will get you more visibility for you listing because when the "auction" is ending you will get placement at the top of the search results and be featured.



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eBay's competitive advantages and ramblings

After listening to eBay's earnings call yesterday I had some thoughts and wanted to write them down.

Ebay's competitive advantages

1. It's auctions- as a seller if you are going to auction off a used electronic item, ebay is the best place to do it.

   1. Why?

      1. Risk of low selling price- On another site you will probably fail to get fair market value for your item because you won't have the buyer traffic that ebay gets. On eBay you might get an non paying bidder, neg'd and then NARU'd for leaving negative comments in the postive feedback, but at least you tried.

2. Product Depth- “You can find it on eBay”....buyers are attracted to eBay because it has just about anything you can think of for sale.

Non Competitive advantages are:

1. Fixed Price Listings- anyone can come in and launch a site that allows sellers to list items on their site for free and then just charge a final value fee. The incremental cost of listing an item on another site to sellers is near negligible with the multi-channel products such as Channel Advisor. They can then drive traffic to the listings through paid search advertising or comparison engines.

2. Seller negative brand equity- sellers are upset and would love to see eBay fail.

3. “Shop Victoriously”- a stupid slogan and making people think they are winners for buying on eBay just doesn't work. Maybe “Neg Victoriously” would work....I don't know.

Useless eBay metrics-

ASP(average selling price)- I don't understand why everyone is so caught up on ASP's as a whole. If the basket of products being sold changes, then most likely the ASP's change. For instance, if I sell DVD's and then one day auction off my BMW, my ASP's will jump. Does this tell you anything about how well my core business is doing? NO. Most likely the reason for the drop in ASP's on eBay is the mix of products has changed. For example, they mention that motors has slowed and other lower selling items have done better. Consequently, we have lower ASP's.

Good eBay metrics-

GMV- Obviously the ability to monetize the site is dependent on the value of goods traded on the site. GMV is very important.

Revenue- No brainer here...

Earnings- Again, a no brainer...

Are your PayPal balances safe? Are they FDIC insured?

With all the banks that are supposed to fail I was beginning to worry that maybe I should be more careful about carrying a balance at PayPal. I know lots of sellers sometimes maintain a balance at PayPal for a number of reasons.

1. To process returns quickly
2. To pay eBay fees
3. To pay for other items they might purchase on eBay

So I did a little digging and read through the PayPal user agreement. PayPal is officially not a bank. PayPal is only a Payment Service Provider. Consequently, Paypal only acts on your behalf and deposits your money in a bank for you. So your PayPal balance is held at a bank at which PayPal deposits your money. Here is a list of the banks that PayPal currently uses.

https://www.paypal.com/cgi-bin/webscr?cmd=p/pop/fdic_banks-outside

Now there are 2 ways in which you can hold your money at PayPal. One way is to have it saved in a money market account and the other is so it is put into a bank account. The money market account, like all money market accounts, is not FDIC insured. However, when PayPal acts on your behalf and deposits the money into a bank account, not a money market account, the account qualifies for FDIC Pass-Through Insurance. So it appears that any balances you hold at PayPal, that aren't money market accounts, should be insured. However, if you read the fine print PayPal says,

"Pass-through deposit coverage is contingent upon PayPal maintaining accurate records and on determinations of the FDIC as receiver at the time of a future receivership of any bank at which we place your funds. FDIC pass-through deposit insurance protects you only against the failure of the bank at which PayPal places your funds, and does NOT protect you against PayPal's insolvency."

Here is the link to PayPal's disclaimer on FDIC Pass-Through Insurance.

https://www.paypal.com/us/cgi-bin/webscr?cmd=xpt/UserAgreement/general/FDIC-outside

So apparently you are at PayPal's mercy to keep "accurate records" and not become insolvent. I think the later part of that statement is probably the most concerning to me. Although I have little faith in eBay/PayPal to keep accurate records, I would be most worried about eBay going bankrupt. Anything can happen these days and with markets as volatile as they are it can happen in an instant. (Think Enron or IndyMac Bank)

Another issue to worry about is that with PayPal is that it takes a long time to withdraw your money. You can't line up outside a bank and wait to withdraw all of your money. At PayPal you have to put in an ACH request to withdraw your money and wait a few days. Consequently, if any of the banks where PayPal's money resides fails, it would probably put PayPal users at a significant disadvantage.

Anyway, this author is going to make sure he withdraws all of his PayPal money as quickly as it comes in. Please let me know if anyone has any thoughts or comments on this. Also, please check back regularly or subscribe to my RSS feed as I will be posting many more eBay stories to come.

eBay must block the sale of all GENUINE LVMH products

eBay has recently been ordered by a French court to stop the sale of all LVMH items. This includes both counterfeit and GENUINE products. Yes, you read it correctly, a French court is saying that eBay cannot have any listings for genuine LVMH products. The reasoning behind this is that LVMH is allowed to pick its own distributors and eBay is not a liscensed distributor of their products.

The court is telling eBay that it must pull all the listings of LVMH products or it will face a daily fine. The court is saying that any website that ebay owns, not just ebay.fr but also ebay.com must pull all the listings. This is a scary issue because if this is upheld and enforced, then all brands will be able to do the same thing. I am sure that Sony and Canon would like to curb the secondhand market for their products. The secondhand market definetly hurts their sales because people don't purchase new items but just buy used ones.

Obviously an issue of jurisdiction comes into play here. I would be curious if anyone knows how it is possible for a French court to enforce a judgement on ebay if they were to stop selling to France altogether? and did not maintain a physical presense there? I am not sure what eBay.fr sales are but it might be its best option. This way the French people might get upset because they are not able to use eBay and then they would push to change the law.