The official pocket guide for Australian sellers how to make money on Todd Alexander Australia’s leading eBay expert how to make money on This page intentionally left blank The official pocket guide for Australian sellers how to make money on Todd Alexander Todd Alexander is an employee of eBay but wrote this book independently of his employment While recognising this book as ‘The Official Guide . . .’, eBay takes no responsibility for its content and readers are advised that using the content of this book does not necessarily mean that the reader will have success buying and selling on eBay The contents of this book contain the views of the author only and not necessarily reflect the views of eBay eBay International AG is the exclusive owner of all rights in the title to, interests and good will in the eBay identification and use of the above in this book is by permission First published in 2010 Copyright © Todd Alexander 2010 All rights reserved No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without prior permission in writing from the publisher The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10 per cent of this book, whichever is the greater, to be photocopied by any educational institution for its educational purposes provided that the educational institution (or body that administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act Arena Books, an imprint of Allen & Unwin 83 Alexander Street Crows Nest NSW 2065 Australia Phone: (61 2) 8425 0100 Fax: (61 2) 9906 2218 Email: info@allenandunwin.com Web: www.allenandunwin.com Cataloguing-in-Publication details are available from the National Library of Australia www.librariesaustralia.nla.gov.au ISBN 978 74237 036 Set in 11/13 pt ITC Berkeley Oldstyle Std by Bookhouse, Sydney Printed in Australia by McPherson’s Printing Group 10 9 8 7 6 5 4 3 2 1 Contents Introduction vii Chapter Safe trading tips for eBay sellers Chapter Becoming an eBay seller Chapter Sourcing products to sell 12 Chapter Preparing and creating listings 23 Chapter Save time with Turbo Lister 32 Chapter Providing outstanding customer service 58 Chapter Managing your inventory with Selling Manager Pro 69 Chapter Branding and marketing 90 Chapter Optimising your success 120 Chapter 10 Tax, legal and eBay policy considerations 129 Summary 137 Appendix: eBay fees 140 This page intentionally left blank Introduction No doubt the majority of Australians have heard of eBay as a place to buy a wide selection of items, usually at great prices Compared to international markets, Australia has been slow to adopt e-commerce, with few of the major retail stores offering a comprehensive online offering Over the years, eBay has become the primary destination for the majority of online shoppers Here are some statistics that will help you to decide whether selling on eBay could provide you with additional income—whether that is personal, or supplementary to your business: • eBay has a global presence in 39 markets Your items not have to be offered for sale in every market, but you can add them selectively for no additional fee • eBay has approximately 88.4 million active members worldwide In Australia alone, 5.35 million unique visitors went to eBay.com.au in December 2008 (Nielsen//NetRatings Netview) • On an average day for eBay Australia, a baby item is sold every 24 seconds; a DVD is sold every 18 seconds; a toy is sold every vii viii How to Make Money on eBay 18 seconds; and a piece of women’s clothing sells every seconds • eBay users worldwide trade US$2000 worth of goods every second But the figures alone only tell part of the story The simple fact about eBay is that it grants you and your business instant access to one of the busiest shopping platforms on the planet Your items can be available for sale 24 hours a day, seven days a week (regardless of whether you intend to work those hours or not) Buyers love eBay because they can shop from the comfort and safety of their own home at a time that is convenient to them, and they don’t have to fight over parking spaces or with trolleys that lead them in the opposite direction The other thing eBay offers is transparency At any given time, you can see what items are for sale, who is selling them, how much they sell for, and how frequently they sell This is the kind of information most businesses would pay a lot of money for to find out about their competitors or potential markets for their products This does mean your own sales are open to inspection, of course, but smart businesses work to streamline their business models so they can continually stay one step ahead of the competition And so it is that very year, hundreds of thousands of people clean out their garages and cupboards and sell things they no longer need Some trawl through garage sales and markets looking for those rare or unique items that might fetch a great price on eBay, making a little bit of profit along the way Selling on Introduction eBay is open to just about everyone—but how some people turn it into a money-making venture? There are countless books, courses, e-guides and the like that promise to teach you how to make millions of dollars on eBay in your first year . . . all from the comfort of your own home Some even suggest that you can this working as little as one hour a day While these things might conceivably be possible, the reality of the situation is that making money on eBay requires a serious business approach, as well as a thorough examination of the options available to you, and a lot of trial and error In Australia, the most successful eBay sellers (and some of them sell more than $1 million worth of items each year) are those with large warehouses, multiple staff members and various supply channels of stock, a lot of it from overseas While not everyone will need to start that big, knowing eBay’s advanced selling techniques at the outset will help ensure you get the finer details right from the very beginning Successful eBay businesses have displayed fantastic growth rates, but they require careful planning and a thorough knowledge of eBay’s systems and processes Like anything, making a lot of profit doesn’t tend to happen easily—otherwise everyone would be selling on eBay and we’d all be millionaires This book is an advanced selling guide for people and businesses who want to use eBay to either establish an online channel to complement an existing business, expand their online presence, or for those wanting to start a business from scratch using eBay as their primary channel Before you get into this book, it is advisable to read How to Use eBay/How ix Chapter 10 Tax, legal and eBay policy considerations Twelve eBay rules every seller must know To protect the eBay marketplace from illegal and unfair practices, eBay has a number of rules in place in regard to listings and sellers If sellers violate any of these rules, the end result may be that your entire account is suspended, all of your listings cancelled or you’re banned from eBay altogether If your listings get ended, all bids/watches on those items will be lost and you’ll not only have to contact eBay and take the necessary steps to reinstate your account, you’ll also have to go through the process of re-listing every one of your items It’s a costly and time-consuming exercise, and one that should be avoided at all costs As per eBay’s user agreement, it is the seller’s responsibility to stay up-to-date with the latest policies and policy changes, but below is a list of 129 130 How to Make Money on eBay commonly overlooked policies that every seller must know Keyword spamming, or using keywords or brand names inappropriately to attract buyers to your listing to artificially improve your ranking in searches, is prohibited Examples include ‘like Apple’, breaking up the names of common brands like ‘Sass y Dress Bide Now’ for Sass + Bide The simplest way to avoid keyword spamming is to stick to keywords that apply only to your item Avoid terms such as ‘like’, ‘similar to’, etc For a full outline see: http://pages.ebay.com.au/help/policies/ keyword-spam.html You may not include links in your listings to pages that offer to trade or sell goods off eBay or links to subscribe to mailing lists outside eBay For a full list see: http://pages.ebay.com au/help/policies/listing-links.html Limited use only of HTML and JavaScript is permitted in your listings For instance, you may not include dropping cookies, redirects or automatic pop-ups For a full list see: http://pages.ebay.com.au/help/policies/listingjavascript.html Misleading titles, such as when you say a second-hand item is new, is worth $X at retail when it is not, is located in Australia when it is not, etc., are against policy For more information see: http://pages.ebay.com.au/help/ policies/misleading-titles.html Avid miscategorisation of listings eBay has over 50,000 categories worldwide, so you’re Tax, legal and eBay policy considerations 131 bound to find one that suits your item It is against eBay’s policies to list your item in a category unrelated to it For more information see: http://pages.ebay.com.au/help/policies/ listing-categorization.html Actions that avoid paying eBay fees are prohibited This can be done innocently, for example, where you list a shirt and advise buyers in your listing that you have matching hats and to contact you for prices For more information see: http://pages.ebay.com.au/help/policies/ listing-circumventing.html There is a limit to how many identical listings a seller can list It currently stands at twenty listings, and you cannot use multiple seller IDs to avoid this policy For more information see: http://pages.ebay.com.au/help/policies/listingmulti.html eBay does allow similar items to be sold within the one multi-quantity Buy It Now listing However, you can only offer a choice of colour and size If selling red and black shirts in small and medium (that are otherwise identical) you must specify the minimum quantity you have of each For example, ‘10’ means you must have in stock ten of both sizes in each colour, i.e ten red small, ten red medium, ten black small and ten black medium Shill bidding occurs when a seller bids on his/ her own auctions, or has friends so It is against policy because it artificially inflates prices, which is unfair to genuine buyers Also be aware that you should not allow genuine customers to bid from your own 132 How to Make Money on eBay 10 11 12 computer—eBay has tools in place to monitor bids coming from individual computers For more information see: http://pages.ebay.com au/help/policies/seller-shill-bidding.html eBay members are not allowed to interfere with another member’s listings This includes offering to sell an item off eBay or emailing another seller’s buyers to warn them against buying from that seller For more information see: http://pages.ebay.com.au/help/policies/ transaction-interference.html Seller non-performance is when a seller delivers an item that is not the same as was listed, or provides sub-standard service The best way to avoid this is to provide as much accurate information in your listing as possible—don’t leave anything to the buyer’s imagination Also, if your performance drops below an acceptable standard, eBay may demote your exposure in search listings and restrict discounts on fees or access to promotions For more information see: http://pages.ebay.com.au/help/policies/sellernon-performance.html eBay does not allow sellers to surcharge buyers for using selected payment methods Such costs should be built in to the item price For more information see: http://pages.ebay.com au/help/policies/listing-surcharges.html You are not allowed to add GST on top of the item price—all prices must be inclusive of GST For more information see: http://pages ebay.com.au/help/policies/seller-gst.html Tax, legal and eBay policy considerations 133 For a comprehensive list of selling policies on eBay, refer to the information and links at this page: http://pages.ebay.com.au/help/policies/listing-ov.html For example, if you want to list an item for pre-sale, you must ensure that the buyer can receive the item within twenty days of payment ✔✔ T i p : Important changes made to the site that could impact how you sell on eBay will always be made at the ‘Announcements’ section of the site, located at: http:// www2.ebay.com/aw/marketing-au.shtml You should definitely bookmark the page and check it on a weekly basis to ensure you not miss information that may require you to change your selling practices Tax implications Any business or individual considering selling a reasonable amount of items on eBay should speak to a professional financial or tax adviser to ensure they are complying with relevant laws and procedures Further information can be found at the Australian Taxation Office (ATO) website Businesses of a certain sized turnover, for example, may be required to register for GST, or may need to have an Australian Business Number From time to time, the ATO will audit eBay sellers and contact eBay directly for a history of sales and the necessary documentation There is no avoiding this, so the best advice is to ensure you are complying with all tax laws and policies from the outset 134 How to Make Money on eBay Prohibited and restricted items As a seller, you are ultimately responsible for ensuring that your item is allowed to be sold on the eBay site Additionally, you are responsible for ensuring the legality of any item you sell eBay has an extensive list of items that are on its prohibited and restricted list, and contravening its policies may end in your account being suspended Furthermore, illegal items may end in prosecution, so seek legal advice on anything you think might be considered questionable Among eBay’s restricted and prohibited items are: • Aboriginal art and artefacts; • used clothing; • electronic surveillance equipment; • food; • human parts; • lock-picking devices; • police-related items; • weapons and knives; and • wine and alcohol For more information go to: http://pages.ebay.com au/help/policies/items-ov.html Legal advice Establishing your own business, even if you’re starting small from your own garage, can open a whole minefield of legal considerations Rather than be perturbed by these hurdles, consulting a lawyer at the outset could save you considerable time, money and stress in the future, should a situation arise that Tax, legal and eBay policy considerations 135 may have been avoidable had you known the relevant law or statute You should seek professional legal advice before undertaking a business venture Some considerations include, but are not limited to: • employment laws; • superannuation laws; • contracts for product supply and/or delivery; and • business law Insurance Before commencing your eBay business, speak to your insurance provider about the best options available for you Some things for you to consider, among others: • insuring your stock to protect from loss, theft and damage; • if operating from home, increasing home and contents insurance to cover your eBay salesrelated assets; and • insuring yourself for loss of income eBay’s user agreement Before you begin investing serious time, commitment and money into your eBay business, it is advisable to thoroughly read eBay’s user agreement and privacy policy After all, by becoming an eBay member you have agreed to be bound by eBay’s policies, which means that if you breach any of them you may be suspended from the site—effectively ending your business overnight It is standard business practice 136 How to Make Money on eBay (and commonsense) to ensure you read, and fully comprehend, any user agreement before agreeing to its terms eBay’s user agreement can be found at: http://pages ebay.com.au/help/policies/user-agreement.html Its privacy policy can be found at: http://pages.ebay.com au/help/policies/privacy-policy.html There are links to both at the very bottom of every eBay page Where to get help From time to time, you will undoubtedly need some help getting your head around how eBay works The good news is you’re not alone! eBay has a multitude of assistance available and it can all be found by visiting the ‘Contact us’ page at: http://contact.ebay.com au/ws/eBayISAPI.dll?ShowCUPortal&_trksid=m38 (There’s a link at the top of every eBay page.) eBay also has discussion boards where sellers and buyers meet to offer advice and tips and to discuss eBay-related topics You can find these boards at: http://pages.ebay.com.au/community/chat/index html?_trksid=m38 Some professional and amateur groups of sellers have also formed to help each other eBay does not officially endorse any of these groups, but they can be found online, or keep a lookout for mention of them on eBay’s discussion boards Summary There are no secrets to being successful on eBay The most successful eBay sellers are those who approach selling on the site with a business mindset Take a realistic, practical approach to selling In summary, here are the main points: • Ensure you can secure supply of your products at the right price • Do your research to ensure there is adequate demand for your product on eBay, which means you will achieve the price you need to maintain enough profit to recover all of the costs associated with selling on eBay • Use all of the marketing levers available on the site to boost your selling profile and make your products appear irresistible to as many buyers as possible, and use the right strategy to lure as many of your buyers back to your listings as you can • Compete with other sellers on price, service and marketing 137 138 How to Make Money on eBay • Make sure you are fully aware of all of eBay’s rules and policies, and that you are abiding by them • Continually look for ways to improve your business model—source new types of products, experiment with different selling strategies on eBay and test your pricing In the past I have referred to eBay as a 10,000-page manual It is a complex site, but there is no reason for any seller to understand every single aspect of its operation If there is a key to success, it’s knowing what you need to know, and knowing what isn’t so important to your business You could spend hours or days reading through pages on the site, or teaching yourself new things, only to find they are not applicable to your business On the other hand, there could be crucial information you’re missing, which could mean the difference between moderate or fantastic success Learn from other sellers Look at how they promote themselves and find ways to it better Take opportunities to meet other sellers and learn their tips for selling success—you’ll be surprised how many view eBay as a community and are willing to help you along the way Try to teach yourself a new part of eBay each and every week Within one year, you’ll know 50 new things Be selective and choose those topics that are most applicable to your business Try selling overseas, try listing at auction if you never have before, learn more about your business by using one of the research tools covered in these pages . . . Summary 139 There’s no need to pay thousands of dollars on courses designed to make you an eBay success As mentioned in the Introduction there are no guarantees, and what you make out of eBay will depend on the effort you put in before you start, while you’re selling, and after the sale is completed Appendix eBay fees In September 2009, eBay Australia announced that it was changing its fee structure to assist businesses by lowering upfront costs and thereby reducing the risk of listing large quantities on the site eBay only made changes to its Buy It Now format and retained auction pricing at the same level it has been for longer than the past four years There are now four different types of pricing on eBay Australia For a full table of all of eBay’s fees, go to http:// pages.ebay.com.au/help/sell/fees.html Non-store subscribers Auctions—3, 5, 7, 10 day durations Insertion fees based on start price of: 140 AU$0.01–AU$0.99 AU$0.30 AU$1.00–AU$19.99 AU$0.50 AU$20.00–AU$49.99 AU$0.75 AU$50.00–AU$99.99 AU$1.50 AU$100.00–AU$399.99 AU$2.50 AU$400.00 and up AU$3.50 eBay fees 141 Final value fees based on sale price of: AU$0.01–AU$75.00 5.25% of the closing price AU$75.01–AU$1000.00AU 5.25% of the initial AU$75.00 plus 2.75% of the remaining closing price (AU$75.01–AU$1000.00) Over AU$1000.01 5.25% of the initial AU$75.00 plus 2.75% of the initial (AU$75.01–AU$1000.00) plus 1.5% of the remaining closing price (AU $1000.01–closing) Buy It Now—3, 5, 7, 10 day durations Insertion fees based on start price of: AU$0.01–AU$0.99 AU$0.30 AU$1.00–AU$19.99 AU$0.50 AU$20.00–AU$49.99 AU$0.75 AU$50.00–AU$99.99 AU$1.50 AU$100.00–AU$399.99 AU$2.50 AU$400.00 and up AU$3.50 Final value fees based on sale price of: AU$0.01–AU$75.00 5.25% of the closing price AU$75.01–AU$1000.00 5.25% of the initial AU$75.00 plus 2.75% of the remaining closing price (AU$75.01–AU$1000.00) Over AU$1000.01 5.25% of the initial AU$75.00 plus 2.75% of the initial (AU$75.01–AU$1000.00) plus 1.5% of the remaining closing price (AU $1000.01–closing) 142 How to Make Money on eBay Store subscribers For all store subscribers, auctions are charged at the same rate as non-store subscribers (above) but Buy It Now is charged at the following rates Buy It Now—3, 5, 7, 10, 30 day durations Basic store Featured store Anchor store AU$0.40 AU$0.30 AU$0.10 Insertion fees are charged as a flat single fee, regardless of start price or quantity of items within the listing Final value fees are charged per item, based on the sale price Basic store Featured store Anchor store AU$0.01– AU$75.00 7.9% of the closing price 7.4% of the closing price 7% of the closing price AU$75.01– AU$1000.00 7.9% of the initial AU$75.00 plus 5% of the remaining closing price (AU$75.01– AU$1000.00) 7.4% of the initial AU$75.00 plus 4% of the remaining closing price (AU$75.01– AU$1000.00) 7% of the initial AU$75.00 plus 3.5% of the remaining closing price (AU$75.01– AU$1000.00) eBay fees 143 Over AU$1000.01 7.9% of the initial AU$75.00 plus 5% of the initial (AU$75.01– AU$1000.00) plus 3.5% of the remaining closing price (AU$1000.01– closing) 7.4% of the initial AU$75.00 plus 4% of the initial (AU$75.01– AU$1000.00) plus 3% of the remaining closing price (AU$1000.01– closing) 7% of the initial AU$75.00 plus 3.5% of the initial (AU$75.01– AU$1000.00) plus 2.5% of the remaining closing price (AU$1000.01– closing) Subscription fees for stores are charged monthly AU$14.95 AU$99.95 AU$499.95 Store subscribers also get additional fee benefits including ‘Free gallery’ for Buy It Now (add a photo to the search results, usually AU$0.59), ‘Free additional photos’ in listings (normally AU$0.20 each) and ‘Gallery plus’ for AU$0.99 (adds a supersize picture to the search results, normally AU$2.49) [...]... combination of letters and numerals, and a mixture of upper and lower case For added security, consider changing your passwords on the first of 1 2 How to Make Money on eBay every month This means that only those employees who need to gain access to eBay on a daily basis will know it, and past employees, or those who have changed roles, will not be able to maintain access In order to sell on eBay, all... received into your PayPal account in the previous month Additionally, you need to apply to have merchant rates assigned to your account—it is a one-time application, and you will automatically receive discounted rates as long as you meet the minimum criteria of payments received and have your account in good standing These are the fees applied to your total monthly payments: 9 10 How to Make Money on eBay. .. best to seek professional legal and accounting advice on the implications of importing items from overseas Your next step should be to search on international eBay sites Chances are, other sellers have checked 19 20 How to Make Money on eBay these sites to see what is available, and for how much What you really need to do is look for a gap in the market—something that is not readily available on eBay. ..x How to Make Money on eBay to Use PayPal by Todd Alexander (Hachette Livre Australia, 2008)—it covers all of the basics of buying and selling on eBay Australia and using PayPal, the online payment mechanism widely used on eBay There are also chapters on online safety, which are a must for anyone buying or selling online Each chapter of this book is designed, in the simplest way possible, to help... spoof altogether, create an email address that is difficult to guess For 3 4 How to Make Money on eBay example, if your eBay user ID is ‘abc123’, don’t make your email address abc123@hotmail.com or your contact email info@abc123.com.au Online fraudsters have sophisticated software to help them guess your contact information, leaving you open to unsolicited email that can be a nuisance or a threat to running... have never sold on eBay before, it’s unlikely you’ll get a multimillion-dollar company to sell directly to you Aim for a business 17 18 How to Make Money on eBay that has enough product, but not too many products, for you to manage as a re-seller Here are some basic concepts you should address in your pitch to a prospective supplier: • Who are you and what is your work history? • What is eBay? A lot of... ‘Continue’ 7 8 How to Make Money on eBay • Choose your User ID Remember to choose an ID that reflects your business name and/or the products you sell Your user ID is how people will come to remember you, so choose carefully • Create a password Click ‘Continue’ • Now check your email and follow the steps to confirm your business registration If you are already registered on eBay and you would like to. .. free, but you must meet eBay s minimum seller requirements: you need to have been registered as a seller on eBay for at least 90 days, and must have listed at least 50 items in any of the three previous calendar months To continue using the tool you must maintain this minimum number of listings 21 22 How to Make Money on eBay Features of eBay file exchange The tool allows businesses to upload listings via... all the products listed, how many sell? (Be sure to include all the items within a multiplequantity listing.) If you source that product, how quickly do you need to sell it? How often does a product sell on eBay? (This is known 15 16 How to Make Money on eBay as sales velocity—you don’t want hundreds or thousands of products sitting there not selling, because the longer they don’t sell the less cash... account to become a business account, here are the steps involved: • Click the ‘My eBay link at the top of any eBay page • Sign in to the site (if not already signed in) • On the left-hand navigation of My eBay, under the ‘My account’ heading, click on ‘personal information’ • On the next page, on the ‘Account type’ line, click on the ‘Edit’ link on the right-hand side • Sign in again to confirm your