Many eBay buyers simply don’t trust eBay sellers

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Every now and again one of my staff tells me of a customer that has either emailed, called or written to us demanding their product be sent to them because we have ‘taken their money’ and not delivered a product to us.

Or, maybe more correctly, they don’t trust eBay themselves?

Today my customer service supervisor showed me a letter that a first time eBayer had written to us. They were typical of the user I will describe below :

This person will usually be a new eBay user, it may be their first eBay purchase with anyone. They have won an auction, or bought an item from our webstore and for some reason they either haven’t received their item yet, or we haven’t processed their payment yet. Most of the time they hint at the fact that you have ripped them off, or flat out accuse us of taking their money to dishonestly run off with it.

They may not be aware of the effort that we expend to ensure we have superior customer service to our competitors; we email customers updates at every step of the way, we email the customer atfer auction with all payment options and expected processing and delivery times, we put in thankyou letters, we automatically email tracking numbers for shipments, and we generally deliver products next day.

That customers accuse us of robbing them somewhat astounds me!

My two larger accounts have received 35,000 positive feedbacks in the last 12 months. I find it firstly amazing that these buyers actually think a business of our size would intenionally take their money for a sale and never deliver a product.

The truth of the matter is that:

1. We all know most customers don’t pay nearly enough attention to what is happening around them (they just don’t READ!)
2. eBay is not a ’simple’ marketplace to transact on (many different sellers, different terms, different standards of supply etc) – tough work for some non-comptuer savvy buyers
3. eBay is a marketplace that is very hard to police when it comes to fraud

So what does this mean for eBay sellers? I think it is indicative of the sort of issues that have plagued eBay from day one, and the biggest one is lack buyer trust due to fraud opportunities in the marketplace.

I see a good mix of positive AND negative press about eBay in Australia. The negative press is usually stories about people getting ripped off on eBay when they buy cheap PCs from Botswana or something similar.

What can sellers do about it? Educate users. Highlight your business positives. This might include your ABN, a registered business address, contact phone number, the number of sales you have had on eBay, the fact you are a powerseller etc.

We do all of these things, but you still get the odd paranoid customer that thinks we are going to take their $30 from a fishing reel sale, rub our hands together with glee and hop on a plane to Bali with the proceeds

View the biggest/top sellers on eBay

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View the biggest/top sellers on eBay.

Here are 2 free sites that list (most of) the top eBay sellers. I say most because I am not sure how all the data is collected and I hear some sites are missing. But if you like looking at this sort of data, you will enjoy them anyway.

http://www.sellathon.com/sellathon10k/

http://www.nortica.com/userarea/

PESA – The Professional eBay Sellers Alliance

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Looking for more help and other like minded sellers when you are beyond that of a small stay at home seller?

Check out pesa at www.gopesa.org. We are members of this group which contains about 400 large eBay sellers. The requirements to join are quite a bit more than the minimum eBay powerseller requirements but if you qualify there are some interesting sellers and some good discounts and programs available to members. It is mostly of benefit to US based sellers but it has just been announced that PESA Australia is launching soon.

Some of the benefits include being part of PESA’s own online mall, discounts on Fedex shipping, pre-approval for Amazon selling and more.

My eBay Business Part 1 – How it all started

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I have decided to post ‘our story’. This story is all about our eBay business. Our business now sells two main product groups, fishing products and musical instruments.

To give you a rough idea of our size at the moment, we lease warehouse space, we order goods in 40′ containers and we employ full time staff. Each day our products (which we pick and pack into cubic metre air freight cages) are picked up by truck and fork-lifted on.

We use some 3rd party software to help us manage our inventory, listings on eBay (in Australia and North America), our webstore, and some CPC sales channels. We also have software designed and developed in-house to manage and create SKUs that we sell, process shipments for picking and packing, and other things.

We sell many thousands of items per month. So we are not the largest, but on busy days it feels like we are up there

How did it all start?

Our business started the way most start. With an idea. And a need to develop another source of income. In 2005 we realised that we should find some more sources of income to grow our business interests, grow our own incomes, and add some stability (more eggs in more baskets).

So our investigation into eBay began. Of course we knew of eBay quite well. We had been operating a web publishing business since 1996 (and still do) so we know the online marketplace in Australia pretty well. We had retailed online and still were at that stage with our online automotive performance parts store but it was low margin stuff at the end of the day and not making a huge amount of profit.

In looking at Ebay we discovered just how large their marketplace was, even in Australia alone. We had the IT skills to sell online, we had the staff to do it as they worked for us with the automotive retail store already. We just had to find product.

So how do you make the most margin possible when selling an item? The answer is usually to either make it yourself, or at least buy it direct from the manufacturer.

Sourcing Products

Immediately we thought of China. My business partners and I had been reading about China’s manufacturing industry, it seemed like 95% of all products in local Kmarts and Target stores were Chinese made so we thought we would look for suppliers over there.

Enter www.alibaba.com. The website that helped us find our first sample products, our first suppliers, and our start on eBay.

I can remember us somehow deciding to send off some email enquiries on a few different product groups. My partner sent some emails off to fishing manufacturers (well, they ALL say they are manufacturers even if they aren’t) and got some responses pretty quickly. When we looked at the prices we honestly thought they had made a mistake with the decimal point.

Seed Capital

With a plan to buy a few sample items from our chosen manufacturer we decided to put some money up and give things a go. We needed to set up an eBay account, sell some items, develop a listing page and strategy and after we had a few feedbacks, start an eBay store. First things first we needed to get some products over and actually sell them to see what sort of price we would get.

At the time there were really no ‘generic’ brand reels being sold on eBay in Australia so we were treading on virginal ground.

And the amount of capital we used to start our business? $7000 AUD.

How hard was the road that followed? Well, stay tuned for part 2…

How to start an eBay business

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Recently I got asked this question again. Usually when I talk to a group of people that I haven’t met, discussions move on to what you do for a living. I tell them about the companies that I am involved in and often I get called an entrepreneur (something I am still uncomfortable about).

When I mention my eBay businesses I sometimes get quizzed quite a bit.

The other day I was caught in a corner of a room by someone who was very keen to start an eBay business. As we got talking it got me thinking more about how we started our businesses and how they grew.

So I thought I would start with the basics in this post and I will start to write some entries about my own businesses, how and why they were started, how they grew, how eBay has changed over the last few years, what we do now that is different, and what we will do in the future.

Firstly you may know that there are heaps of websites out there about starting your own eBay businesses and making a amazing wage working from home. As always if it sounds too good to be true, it definitely is. So what you will get from me is the no bullshit opinion from moi.

Enjoy it

When looking for a product or service to sell, choose something that you know and like. If you like fishing, by all means open a fishing store and compete with me. If you like golf, don’t decide you want to sell gold fish supplies. You might make the same margin but you will get sick of fish tanks and plastic coral when your interests lie elsewhere

Do the groundwork

Don’t jump in headfirst. Look at the market online. Check out the relevant eBay categories.

• Are there many sellers in the category?
• Is the category dominated by brand name products?
• Is there a lot of bidding activity?
• Are there many small sellers, or a just a few big sellers?

These a similar questions should be asked to do some analysis. Are you likely to make a profit? Are you going to source your product from overseas, from China for example? or locally?

Brand and positioning

Where will your products sit in the market? Will they be high quality and high priced compared to your competitors? If there are many people selling cheap versions of your products you might be better to source better quality items and aim for the consumer who wants to pay more. I wouldn’t have thought it possible to build your own premium brand using only eBay, but we have done it and so can you.

Stay tuned, I will add some more information soon, and get into some more detail about the best ways to source products, and how to make sure you are even making enough money!

View an eBay sellers’ monthly turnover

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I suppose I had better give up one of my favourite eBay tools… it allows you to enter a eBay seller’s ID and then browse their months sales and total it up. You can even dump the info into a spreadsheet and analyse the item breakdown if you like.

I use it as a quick guide to see how much someone is selling into a category, what their turnover is like etc. If you know they sort of product buy prices they are getting (in your own category you should have a good idea) it can help you identify

1. how well your competitors are doing
2. what your competitors are selling most of
3. what sort of profit they might be making compared to you

As you can see i use this tool for competitor and market analysis (hey, I am not just doing this for fun you know!)

The tool is from a website called ‘Goofbay’.

You can see it here in this link. Have a play, you might learn something.

The eBay marketplace in Australia

** My blog has now moved – please go to www.nathanhuppatz.com/ebay-powerseller-blog and read/subscribe there. This blog will NOT be updated any more. Thanks. **

Thought I would kick off with a few thoughts about the eBay marketplace in Australia. Recently news that a number of powersellers with revenues of $50,000 AUD per annum had some of their details passed on to the Australian Tax Office. There are some interesting comments in this article :

“It is understood, however, that up to half the local eBay sellers registered for GST have claimed input credits from the ATO, believing invoices from eBay had included GST. “

One of my accounts received the same email stating that account details and sales revenues had been passed on as well. It is interesting because there will be a number of eBayers that will face some difficult times ahead should the ATO decide to do some audits.

I already know one seller who has been audited but I believe this was because of some previous GST ‘flags’ that had been raised. My business was contacted around the same time but we seemed to have gotten through unscathed. Which is good. We do everything by the book.

What will be the effect of these sellers being audited though? ebay.com.au will still continue to mature as a marketplace, there will still be the same influx of new sellers, and eventually I think it will end up in a similar situation to the grand-dad of all the ebay sites.

I know from experience (50,000 eBay sales and growing fast) that it can be hard to make a dollar on eBay, and cheating the system would only increase your odds. Whether that be cheating the buy by overcharging shipping, marketing a crap product as a brilliant one, or by maybe by avoiding taxes.

It is all too easy to start selling on eBay, and with eBay receiving a fair amount of promotion over the past year or two as a great way to make income there has been a lot of sellers enter the marketplace, saturating some categories. (hey, it even worked for me!)

I may have only been around for a few years on eBay, but I (and my partners) have built some solid accounts with some impressive sales numbers, and seen pretty much every type of seller out there. Maybe the attention from the ATO will clean up some of these categories and force sellers to do things right. Might make it a better place for everyone…