EBay, the worldwide auction internet portal, has grown at a staggering rate over the past few years.
The number of eBay users has doubled in less than a year. On its fifth birthday in October, the UK website had 7.6m users - suggesting it is attracting another 600,000 every month. Although eBay has a presence in many countries, the UK site is second in size only to its American parent.
Everyone from independent car dealers to IBM and Sun Microsystems use eBay to attract new customers in a convenient and low cost way.
Ebay is making it easier for businesses to use its site by allowing conventional banking arrangements and providing dedicated customer support. Previously, companies had to enter a credit-card number if they wished to trade.
If you have a product-based business, or are thinking of starting one - eBay provides a very useful method of reaching a massive customer base. Since ebay's client base is so widespread, you can sell pretty much anything on the site.
The benefits of using eBay (or other auction sites) are many - low costs, rapid secure transactions, and access to a huge potential market instantly.
As with any business however, you are not guaranteed success. You need to find products which are in-demand and sell them at a competitive price. You need to market the products via the listing pages just as you would anywhere on the web.
Although in-depth information is readily available on the ebay.co.uk site, here are the initial 5 steps required to set yourself up as a seller.
Step 1: Set up a new account.
You will be required to provide credit card and bank account details for verification purposes. You'll also need to decide how you pay your seller fees. There is an initial "insertion fee" of between 15p and £2 depending on the value of your item (or reserve price), and a "final value" fee which depends on the price you sell the product for. This is currently 5.25% of the final bid, but only payable if the item sells.
Step 2: Preparing your item for sale.
This is the essential part of the selling process. As in any supply/demand scenario, you need to find out a) is there a demand for your product and b) what is a typical price for the product. You will then need to cater your supply to the demand on eBay and set the price accordingly. Also check that what you are intending to sell is not prohibited by eBay (refer to their site for details). Examples of prohibited items are plane tickets, alcohol and cigarettes. Other items which could infringe copyright (e.g. albums copied onto CDR) are also disallowed.
Step 3: Listing your item for sale.
Another crucial step - you are effectively creating a sales brochure for your product - complete with description / pictures and presumably some sales patter. You can decide to auction the product or "buy it now". Finally, you choose whether to list your item for 1,3,5,7 or 10 days.
Step 4: Payment and P&P.
As the vendor, you decide which payment types you are willing to accept (e.g. postal order, cheque or PAYPAL). Paypal is an excellent complete payment system owned by ebay which seamlessly deals with the payment between parties and is obviously recommended. Many buyers will only purchase items if your have the Paypal option enabled. You will also need to instruct the buyers how much postage will be per item, including international options (if necessary). Higher value products are best sent via recorded/registered post, so you will need to advertise these costs on the listing page.
5) Closing the deal.
Once the listing has expired (or the buyer has used the "buy it now" option), you need to ensure that payment is received before sending out the product (Again, Paypal is instant and by far the most convenient way to do this). Both buyer and seller should then leave feedback for each other - pretty much always this is "positive"!
Key Points to Remember
Groundwork - Before you even start, you need to research your market. If you have a product in mind, do you have a lot of competition, can you make a profit by selling on eBay? You can easily check out the competition by searching for products you have in mind and selecting 'watch this item' on the buyer page. When the auction ends you will be able to track the final sale price of the item.
Committment - Although selling on ebay may sound easy, if you want to set-up a real business selling, you will need a lot of committment, just as you would in any other business area. eBay is a time consuming business. If you sell small low cost products with small margins, you will spend lots of time packing and posting the items - you need to factor the time likely to be spent into your plans.
Presentation - Marketing your products is as important as any other tip on this page. Your listings pages are like parts of a shop window. Take time creating clear and uncluttered listings templates, make your listings as professional looking as possible and you could gain competitive edge over other sellers in your field. You can graduate to eBay selling platform like Turbolister to assist streamlining the listing process. This is only available after you have done your first few trades.
Growing your eBay business - Organic growth is best. Rather than spending a fortune on products and storage, why not test the water. See how the selling process works in practice, which items are the most popular and then grow the business at a reasonable pace.
Reputation - ebay has a feedback system which rates sellers according to the amount of positive feedback they receive. People are unlikely to buy of sellers with a low percentage of good feedback. Over time, the number of feedback points your get will increase. You can build your rating by buying small low-cost products on eBay for household use. That way you won't be buying things that will not be used. If you carry out 10 fast trades before you start to sell you will get the feel of the process and build valuable feedback score.
Communication - Despite being Internet based, you will regularly interact with buyers via email. Asking questions, confirming postage costs, etc. Make sure you answer all your buyers' questions in a timely and professional manner - you may well be selling to them again if you get it right the first time. Remember people are people and some can be unreasonable. If you fail to communicate effectively you can risk receiving negative feedback which will have an adverse affect on your score.
Packaging - When sending goods out to customers, ensure they are well packaged. Receiving a securely wrapped parcel will impress customers and ensure you receive glowing feedback points. For higher value items, we recommend you use recorded or registered post. It is also worth sending a copy of the bid receipt with the package. You can find and buy all the packaging you need on eBay. Buying on the site will also help your feedback score.
Payment - Paypal is the recommended method of payment on ebay - transactions are instant and linked to the buyer/seller's bank accounts securely. Disputed transactions are easy to clear up. However, to reach as wider audience as possible, you'd be wise to accept all types of payment. If you do opt to accept personal cheques, make sure the payment has cleared before sending out the item.
Keywords & Description - Take time to input accurate keywords relating to your product and make your title line as succinct as possible. Buyers will often make a decision at the search stage, i.e. if the title is clear and not full of sales nonsense, they are more likely to click on the link.
Bill Bailey is a freelance business start up author and journalist. Read more on http://www.schnafflehound.com/finance
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