Retailers increase sales with eBay, other websitescontinued from page 1 Five years ago, only Internet junkies and serious collectors
had heard of eBay. Today, only hermits and Luddites might remain unaware
of this powerhouse in the online auction business.
Billing itself as “The World’s Online Marketplace,”
eBay is only the best known of a number of online commerce sites that
help buyers and sellers find each other. OnSale.com and uBid.com are eBay’s
competitors, and online giants such as Yahoo! and Amazon now have auctions
as well. Sites such as iOffer.com and sell.com work more like online
classified ads or bazaars to match buyers and sellers and allow them to
negotiate online for a final price, an up-and-coming format known as online
haggling. What does this have to do with traditional retailers?
A lot. Many retailers have found online auctions and other e-commerce
sites a useful alternative for moving merchandise that is not selling
on the sales floor. “I think eBay is an awesome tool, especially for resale shops like mine. It’s also a blast!” said Nicole Christ, owner of Nicole’s Revival, a resale shop with two locations in metro Detroit. She has been using eBay since 1999, and enjoys watching her auctions’ progress. “I can move merchandise on eBay that no one’s
touching in my store,” agreed Tom Felix, of Felix’s Finds in
Ray Township. “Who knows why something is suddenly desirable? But
if your timing is right, you can get more than you expected for items
on eBay.” About half of Michigan retailers now have websites for
their stores, according to a recent survey conducted by Michigan State
University, and 43 percent of those with websites actually sell merchandise
from their sites. But having a website that actually sells merchandise
(a webstore) can be a time-consuming and expensive commitment, especially
for those who are relatively new to e-commerce. Online auctions offer retailers a way to “test the
waters” of e-commerce before taking the plunge into a webstore. For
some, it becomes the preferred way to conduct online sales without the
expense and commitment that a webstore entails. Nicole’s Revival (nicolesrevival.com) and Felix’s
Finds (felixsfinds.com) have webstores in addition to eBay listings. Each
method draws customers in a different way, they say. But both retailers
plan to continue using eBay to boost sales in their physical stores. Felix’s Finds sells new and used collectibles and
antiques. Felix is frustrated when he sees other gifts/collectibles shops
marking down products to as much as 50 percent only a month after being
on the shelves. “It brings the value of new collectibles down, because
customers learn to wait for the sales,” he said. “Instead of
marking down slow-moving inventory, we’ll list the items on eBay.
We may only get that same 50 percent of the full in-store price, but at
least we haven’t made the product look cheap or made our store look
bad.” Felix’s wife Pat, who handles the online sales for
the business, admits that often it’s hit or miss, or good (or bad)
timing, when it comes to online auctions. But even if some sales don’t
bring in quite as much as they hoped, others make up for it by going for
much more. “Sometimes things barely sell for what you paid,
but sometimes you hit big, when you find that one person who’d been
hunting for the item,” she said. “A collectible DNR deer hunter
patch we had went for $250 on eBay. This type of patch often sells for
$5 to $10, but this patch was older and rarer.” Pat spends 10 to 15 hours a week on online sales and uses
software provided by eBay (for a fee) to simplify and speed up the listing
process. Currently, online sales are probably less than one percent of
total sales at Felix’s Finds, but it’s still something the Felixes
plan to continue. “It’s a nice supplement to our storefront
sales,” said Pat. Christ says she spends about an hour a day on her eBay
auctions, and estimates that eBay sales are 15 to 20 percent of her total
sales. With an average of 75 auctions running at any one time, she has
earned the eBay rank of “Power Seller.” The title of Power Seller (shared by about 90,000 of eBay’s
150,000 sellers, according to eBay) gives Christ privileges on eBay, such
as advance notice of eBay specials, better access to customer service
and even benefits programs at the higher levels. It also means that a
“Power Seller” icon appears on each of her listings, which gives
her extra credibility and respect among buyers. “After years of doing this, I have learned which
items in my inventory will sell well on eBay. Certain designers’
names do much better on eBay than in my store. “For other items, it’s the reverse. I just sold
a jacket for only seven dollars that might have gone for hundreds in my
store. I chalk it up to bad timing and luck.” Christ started selling online from her website way back
in 1997, then tried listing a few items on eBay in 1999. Now, her webstore
is primarily categorized lists of items for sale, without photos but with
a link on each page to her listings page on eBay’s site. Some customers shop through her webstore, e-mailing or
calling for more information or photos of specific items. These customers
get a more personal sales pitch, something Christ likes and is good at. “I can turn an e-mail request for information into
a sale of three or four items just by suggestive selling. On eBay, that’s
less likely, although eBay bidders sometimes e-mail me with questions
too.” There are, of course, fees for listing items on eBay.
A non-refundable “insertion fee,” based on the starting price
for your item, ranges from $0.30 (for items under $10) to $3.30 (for items
over $200). The final listing fee applies to completed items and is
based on the final price. For items that sell for $25 or less, the final
listing fee is 5.25 percent, but the percentage goes down slightly for
higher-priced items. Other fees apply if you want more than one photo or other
options. Christ estimates that about 10 percent of her final price will
go to cover the eBay fees, but she makes up some or all of that cost with
shipping and handling charges. Payment for transactions is an issue any online retailer
has to think through carefully. Most eBay sellers (business-to-person)
accept money orders, credit cards through their store website or online
payments through a service called PayPal, an eBay company that allows
registered buyers to accept and sellers to make payments with credit cards
or through their bank account. Christ has decided against using the popular PayPal service.
Since she uses MRA’s bankcard services already, she prefers to handle
credit cards herself. “I wasn’t comfortable with the negative press
PayPal has gotten, and I know sellers who have had bad experiences with
it,” said Christ. Instead, eBay buyers are directed to an order form
on her website. After resisting it for a while, Pat Felix now prefers
PayPal to other payment methods. “It’s extremely fast, and I
have had no problems with it. Many people using eBay these days have PayPal
accounts, so there isn’t a delay as there was in the past.” Those new to eBay will soon discover it is a huge site.
eBay claims that “on any given day, there are more than 16 million
items listed on eBay across 27,000 categories. In 2002 eBay members transacted
$14.87 billion in annualized gross merchandise sales (GMS, the value of
goods sold on eBay).” This article was written by Amy Buttery, Michigan Retailer staff writer. |
Online auctions 101For retailer “newbies” interested in selling
via online auctions, Felix, Christ and others experienced with eBay can
offer valuable tips. Although these come from eBay users, most can be
applied to other online commerce sites that serve both sellers and buyers: • Start small (one or two auctions or listings) to
learn the ropes. It gets easier as you get experience, and your investment
of time will be less as you get better at it. • Read the website’s help information. There’s
a wealth of information on eBay, but some of it won’t make sense
until you have managed a few auctions. Pay special attention to the site’s
rules for users. • Research the type of merchandise you want to sell.
Rather than watch active auctions, go to the “Advanced Search”
page and perform a search of “Completed Items.” This shows what
an item (or kind of item) has sold for in the recent past—the final
winning bid. • Start with inventory that you are not particularly
invested in—products you wouldn’t mind taking a small loss on.
• Become familiar with the language used in listings.
Learn from other listings (especially those from Power Sellers) how to
include safeguards about costs of shipping, insurance and other potential
pitfalls of online transactions. Also, become familiar with eBay’s
categories and list items in the best category, so browsers will see your
merchandise. • When making a listing, don’t choose the various
add-on options available to “dress up” your listing at first.
It makes little difference to most buyers, and “those nickels and
dimes add up,” said Christ. • Don’t be too discouraged by sales that fall
through in some way, or by disgruntled buyers. According to Christ, “about
5 percent of eBay buyers are nuts.” They may be emotional shoppers
or may treat auctioning like a game, such as gambling. • When a buyer is troublesome or a transaction goes
bad, Christ recommends using e-Bay services to help with resolution or
to hold these buyers accountable. Pat Felix, on the other hand, doesn’t
bother—it’s not worth the effort, in her opinion. • If you don’t already ship much merchandise,
learn about various shipping options, finding the best method for your
merchandise in terms of price, convenience, and customer satisfaction.
Clearly describe your shipping and handling charges in your listings.
Handling charges, if you choose to include them, can help make up the
cost of listing the auction, but if they are too high, some customers
will stay away. • Have fun and learn from each auction. |
