Selling Your Stuff on eBaySubmitted by SharpMan Editorial Team on Friday 15th October 2010
- A second revenue stream.
- What you need.
- Some tips and strategies.
So you’re Joe Hi-tech… an Internet savvy guy who is familiar with eBay, the online auction site where regular folks (and some merchants) buy and sell goods of all types. Have you considered how eBay might improve your bottom line? Read on for the SharpMan Skinny on selling on eBay.
If you’ve never been to eBay, now is a good time to check it out. eBay sells approximately 4000 billion items a week (*my unofficial estimate). It is by far the largest and most successful auction site on the internet, with bases in the US, UK, Australia and growing. That’s what makes it such a great place for buyers and sellers; that global market you’ve been hearing so much about is truly just a keystroke away. And, whether you are looking to make a few bucks cleaning out the garage, trying to get top dollar for a rare collectible, or looking to start an at-home, on-line business you can take advantage of this.
How It Works
EBay is an auction site. This means they don’t sell things… you do. What eBay does is connect people who have things to sell with buyers. At its core it is very simple: you put items up for auction, if they sell you send an invoice to the buyer, they send you money, and you ship the item and pay eBay a small fee. Simple.
The power of eBay is that the site has automated many of the tasks so it’s truly a simple matter of filling in the blanks and following instructions.
Before you can sell or buy, you must first register with eBay and sign up for a seller’s account. You’ll be asked for basic contact information and a credit card or debit card for verification. Your eBay account is free; but there is a charge for listing an auction. For this reason, when you sign up for a seller’s account, you’ll also have to provide information about how you plan to pay your fees (i.e., checking account, credit card or PayPal).
PayPal is an eBay-owned company that enables an individual or business with an e-mail address to securely, easily and quickly send and receive payments online. With a PayPal account you can accept payments by credit card, easy bank transfer, debit card and more, for a processing rate that is likely to be lower than what you would pay with your own credit card processing account. Even customers who do not have a PayPal account can pay you instantly.
If you plan to use PayPal, set up your free account before you begin listing items on eBay. After all, getting paid is the most important component of selling, right?
Ready, Set, Sell
Begin by clicking the sell button at the top of the eBay screen. eBay will ask what you are selling and prompt you with a list of possible categories. There is a charge for each additional category you choose, so you may want to limit yourself to one category.
SharpMan Tip: eBay automation will likely encourage you to pick a second category but I still recommend you stick to one category.
Once you’ve chosen a category, eBay will generate a simple-to-follow sell form where you will provide the information that will help people find and understand your listing. For example, you’ll have to provide the auction title, an item description, the starting price, optional photos, acceptable forms of payment and shipping/handling costs. Uploading photos is highly recommended.
SharpMan Tip: The good news is on eBay, it is customary for the buyer to pay for shipping.
For items that eBay sells a lot of — like DVDs and iPods — they offer a pre-filled form that includes all the product details — even pictures. This feature streamlines your work. Just feel your way through, it’s not that complicated and… you’ll have an opportunity to review, edit and save your listing if you’ve made any mistakes.
As you advance through the process of listing your item for sale, eBay will offer you additional for-pay extras, including:
- making your auction a featured selection for $19.99;
- setting you auction title in bold for $1; and
- outlining your auction title for $3.
No one of these items is a deal-sealer — many people successfully sell on eBay without paying for these extras. Try it out the simple way first.
To finish up, scroll down the sell form until you see a button labeled preview. At this point you may correct any errors in your listing. If you’re satisfied, review the list of the auction fees that eBay will charge you in the event you are successful at selling your merchandise.
Below the fees list you will find the List Item for Sale button. Click that button and you've listed your first eBay auction!
Now all you have to do is check in and monitor how your auction is going. Or, you can choose to forget about it and let it run its course. When the auction ends — typically after seven days — eBay will alert you with an e-mail to let you know if your item has sold or not.
If it sold, your e-mail will include a link to send the buyer an invoice. The buyer should then pay you, either through an Internet transaction like PayPal, or with a check or money order sent by traditional mail.
Sellers send out purchased items after the receipt of payment. If you’ve received a check, hold on to your item until the check clears the bank, and let your buyer know that you plan to do this. Once the check has cleared, send out the item as quickly as possible, using the method you indicated in your listing. Once the buyer receives the item, the transaction complete.
Details, Details, Details
Now that you understand the basic auction process, let's get into some fine-tuning. Like most at-home projects, getting everything together and getting started is usually the hardest part.
Something to sell. While this might seem like a duh! comment, it actually leads to the bigger question of what are you trying to get out of eBay? Are you selling a rare antique or are you trying to clear away a bunch of old junk? There’s a big difference in selling strategy between trying to make a few bucks from your attic sweep and in trying to maximize your profit off a single, rare collectible. This difference determines the way you proceed.
Digital camera. The single best thing you can do to increase sales is to have a large, clear picture of the item listed. For rare or expensive items you might want to put up several pictures, one showing an overview of the item and then several detail pictures, including a picture of any labeling or inscription and a picture of the original box, if available.
Picture hosting. eBay will include one small picture with your auction for free, and additional pictures at $0.15 each, however these eBay-hosted images are fairly small. If you want big pictures that allow your buyers to see your products in detail, you’ll need another site on which to store your photo files. Most people use Vendio, which charge anywhere from $9.95 and up depending on the number and size of your photo files. They can also provide other services, from assisting you with designing your listings to item management and more. Not for the occasional seller, but worth looking at if you are planning on listing many auctions.
Shipping supplies. The basics: boxes, packing tape, bubble wrap. Some items, like books or T-shirts, are easy. Slip into envelope, apply postage and you’re done. Other things, jewelry and old toys, for example, have to be carefully packaged to prevent damage in transit. Before you actually post a listing, consider how you must ship it in order for it to arrive intact. The cost of packaging and special handling should be enumerated in your listing. Otherwise, you run the risk of cutting into your return after your sale is complete. If you ship via the US Postal Service using Priority Mail™, this service includes the cost of boxes or envelopes, available for pick-up at your local post office or online. If you use less expensive services, like Media Mail (formerly "Book Rate"), you’ll have to include the cost of supplies.
Shipping costs. When you fill out the auction sell form, eBay will ask you how much you will charge for shipping/handling. Although you are not required to include this information, providing a specific amount encourages people to buy with confidence. To help with this, eBay provides a shipping calculator. To use this calculator you must know how much your item weighs, including the weight of the packing materials, and after it has been packaged and how you want it shipped (Express, Priority Mail™, First Class Mail, Media Mail, etc.) Many sellers prefer charge a flat fee. The flat charge is convenient, in that you don't have to pack the item first and weigh it before listing it and also because the buyer can immediately see what the shipping associated with buying the item will be. This means that your potential buyer won't have to go through the trouble of consulting the eBay shipping calculator, or won’t skip your auction because they don’t want to bother.
SharpMan Tip: Remember: you are the one who is going to have to pack the item and deal with the post office, so don't be afraid to charge an extra buck or two for your time too. And remember — eBay is a global marketplace, clearly indicate that your shipping costs apply to North America, or wherever you reside, with international shipping quotes separately available.
Insurance & delivery confirmation. For higher-priced items, you might want to include the cost of insurance and delivery confirmation in your shipping/handling charge. For les expensive auctions, consider offering this as an add-on upon request.
SharpMan Tip: What’s the difference between insurance and delivery confirmation? Insurance reimburses you for the insured amount in the event your item is damaged in shipping. Delivery confirmation provides you with a tracking number to help you keep track of your package in transit. Delivery confirmation additionally protects you from having a buyer claim that the item never arrived.
In auction sales the big challenge is maximizing your return on the items you list for sale. Before diving into a discussion of pricing strategy, familiarize yourself with the following auction and eBay pricing terms:
Minimum Bid: The starting bid you set for your item.
"Buy It Now" Price: A price you set in addition to the Minimum Bid. eBay allows you to set both, making it possible to run an auction and also allow an eager buyer to buy your item straight-away for the Buy It Now price. This may also be used by a buyer who views your auction after it has ended unsuccessfully and who would like to purchase your item.
If you sell your item using the Buy It Now price:
- Your auction will not go the full duration, and
- there can be no bidding war; your item is sold.
Setting a Buy It Now price does not mean that a buyer who observes an auction with bids exceeding the Buy It Now price can undercut other bidders by choosing this option. Once the auction has a bid at the Minimum Bid price, the Buy It Now option is eliminated and the auction proceeds as usual, which means the price can go as high as buyers are willing to bid. There is an additional fee for a listing with a Buy It Now price.
Reserve: This is a price that you set that is usually hidden from buyers and higher than the Minimum Bid. The Reserve price allows you to back out of selling an item for a price lower than you find acceptable.
eBay Fees: eBay makes money by providing a system for easily conducting auctions that draw bidders and then charging Listing Fees and Final Value Fees to sellers.
- Listing Fees are the fees that you pay at the start of each and every auction, whether or not your item sells.
- Final Value Fees are fees you pay if — and only if — your item sells. Your Final Value Fee is set on a graduated scale from 5.25% for auctions under $10 to 1.50% for items over $1000.
The real art of selling on eBay lies in drawing in interested bidders who will drive up the price of the items you list. This is especially true if you list something valuable or unique — like a new video iPod or a page of original comic book art, where it isn't just a question of if you can sell it, but of how much you can get for it.
The "One Big Bid" Strategy. It’s exciting to see two people competing for your item and watching the price for your auction go up and up and up. This strategy relies on bidders getting "caught up" in the excitement of an auction, and therefore bidding more than they originally plan, or more than they believe the item is worth. This strategy is less likely to pay off in an automated auction on eBay.
Unlike live auctions — silent or with a live auctioneer — where participating bidders can get carried away by the experience, many eBay bidders rely on eBay automation to calmly bid for them. This allows them to leave their computers, because they don’t have to monitor the auction to increase their bid, but also allows them to privately set a maximum bid amount to limit how high the automated system will spend on any given item. A buyer’s maximum bid amount is never disclosed to the seller.
You, or anyone else monitoring your auction, will only see the bidding increase by the minimum bid amount, which you set when you listed the auction. This minimum bid amount can be set to any number — from fifty cents to $50 — but once set, a buyer wishing to increase a bid must commit to that jump in price. For example, if the current bid of your item is $100, and your minimum bid amount is $50, a buyer must commit to a new price of $150 in order to be in contention for your item.
The "One Big Bid" Strategy suggests that setting your minimum bid amount higher can actually bring you a bigger fee.
It works like this: You list an item worth $60 for auction. In order to attract as many buyers as possible, you set minimum bid amount of only $1.
Buyer One joins the auction and privately sets a maximum bid amount of $40. The auction selling price will show someone has bid $1, as this is the minimum bid amount. Buyer Two now joins the auction and privately sets a maximum bid amount of $60, because he’s savvy and knows that this is the value of your item. This instantly raises the auction selling price to $41, one minimum bid increment over the maximum Buyer One was willing to pay. If there are no more bidders, Buyer Two will win the auction with a bid of only $41 — even though he was willing to pay much more.
To get the highest price for your item, consider setting your Minimum Bid as high as possible. The idea is to attract that One Big Bid by pricing the item for the informed buyer. In the above example, setting a minimum bid amount of $60 might mean the first buyer wouldn’t bid at all, but the second buyer will still bid and end up pay more. A higher minimum bid will attract the informed buyer who understands that your item is worth $60. Read on for how to identify what your item is worth.
Research. Before you list your item, check out similar listings and see how they are priced and what they actually sell for. To do this, sign onto your eBay account and use the search function to identify the item you intend to list for sale. Got something unique? Search for an item similar to it. What the search will reveal is a list of current items for sale on eBay. Because many people wait until the last minute to bid (a practice called "poaching"), these bids might not reflect the final price for these auctions.
To find the final auction price of a given item, look on the left-hand column for Completed Listings. Tick that box and search again. Your results will include completed auctions and prices for similar items in the last week. This should give you a good indication of what price range you can expect. Like any auction process, eBay results can in result in variation in price — even between two identical items. For example, you may see two identical items, like two listings for the Sex & the City Series Gift Set, to sell for radically different prices. In a quick eBay search conducted for this example, this item sold for $80 and $132 in the same week.
Why the variation? Because people are insane. Okay, maybe not totally insane. Variation in auction results can be explained by a difference in shipping prices or the item’s condition, or it could just be because of the way the item was listed on the sell form. Simply having a clear listing — with your terms of sale clearly spelled out and a good, large picture of you item can make all the difference. Consider taking the extra few minutes to properly describe, identify and showcase your item.
Another thing to notice in the completed search results is the number of items that are not selling — this information should give you an idea of the demand for your item. If every item is getting bid on (or even better, is getting multiple bids) then you know your item is hot and you can set a higher Minimum Bid. If more than two thirds of items go unsold, then the demand is low. That does not necessarily mean you must take a lower sales price. Consider listing your item for the informed buyer, and if it doesn’t sell, re-listing it several times — it may just take that long for your buyer to come along.
Forget TRW, It’s All About Your eBay "Credit Score"
The basics. To allow buyers and sellers to anonymously transact with confidence, eBay uses a feedback system where buyers and sellers provide a positive, neutral or negative mark at the end of a transaction. Sellers with higher feedback ratings inspire more trust. Bidders may actually pass up a listing by lower-rated seller in favor of a higher-rated seller, even if the higher-rated seller’s auction is more expensive. In other words, people take your eBay credit score really seriously. If you are just starting on eBay, your feedback rating will be zero. Anticipate that buyers may require additional assurances in order to bid (and pay) with confidence.
SharpMan Tip: A low or zero rating may prevent you from attracting the highest possible bid from an informed buyer, so set your Minimum Bid accordingly.
The muscle. After eBay informs you that your item has sold and you have sent the buyer an invoice, the waiting game commences.
Most buyers pay within 48 hours using PayPal. Transactions with a check or money order will take longer; customers who live overseas can take longer still. How long should you wait? Is there any recourse for sellers in the event a winning buyer pays late, or not at all?
For these situations, eBay provides a non-payment redress system to assist sellers. Absent notice from the buyer advising of a payment delay, sellers typically wait 7 — 10 days for payment and then file an Unpaid Item Dispute with eBay. eBay will then contact the buyer via e-mail with an Unpaid Item Reminder encouraging the buyer to send the payment. If the buyer doesn’t respond, sellers often wait another 7 — 10 days before reporting an Uncompleted Transaction. eBay will then credit the seller with the Final Value Fee and offer a free re-list of the item. An Uncompleted Transaction can be applied to auctions where the buyer fails to pay for the item or, in the case of a buyer and seller mutually agreeing not to complete the transaction, as in the case of a returned item.
In addition to receiving credit for the Final Value Fee, sellers will often report a negative ‘non-payment’ comment on the buyer’s eBay score. For serious eBay deadbeats, sellers put out Non-Bidder Alerts as a warning to other sellers not to do business with them.
Buyers can have questions too. It's a good idea to keep all your post office receipts and keep track of when packages where shipped. That way if one is slow in arriving, you have that information on hand to give to the buyers. Delivery Confirmation will make that easier.
The best advice is to start slow. Putting up a few small items will only cost you a buck or two. But once those sales hit, eBay cash feels like found money.This article last updated on Friday 15th October 2010