eBay Small Business Startup

If you or someone you know is thinking about a small business startup to sell on eBay don’t be defeated by all the imagined anticipated factors that eBay members or competitors might have. The advantage in any small eBay business is the willingness to work hard and keep trying to succeed. Here are some case study examples from real-life small eBay based businesses whose complexities and challenges derailed them form the inside.

1. Manufacturing to Your Personal Taste

In any business market, the eBay customer is the customer. The manufacturer is not the customer. The eBay vending manufacturer needs to identify their best business market. That is, the eBay demand should determine products and pricing, not the company market’s wants and desires and sensibilities. Confirm any assumptions with research instead of personal assumptions. eBay data and the buying practices of members are available online.

It is best when the eBay demographic buying online and their researched product demand decides the product line. The product being sold is to the market’s taste, not the designer’s. If you or representative of this “ghost demographic” are not out buying these goods or products, then you are doubly not the market and should not be producing to your own taste. Listing eBay items costs money and it’s best to skip all learning curve costs at the outset.

What customers spend their money on and their taste is what the designer should be looking to produce and what the seasonal merchandise will be complementary of. Lone eBay items tend to not do so well. Items that look out of touch and not in keeping with the general rules look awkward no matter how well made. Manufacturing for eBay sales to personal taste yields a warehouse of personal taste shopping. Manufacturing to eBay market taste yields a product catalog and backlog of goods for seasonal eBay discounted listings and promotion.

2. Pricing Without Reason/Rationale

One man I worked with had a different pricing philosophy for many of his items. One was due to a price he had seen years ago, another was a nostalgic item he clearly didn’t want to part with, another was an algebraic function of materials applied nowhere else in his business. A survey of pricing by his customers had no rhyme or reason. The prices were too high, and sales remained flat. The customers would browse their eBay store and be put off by no loss leaders or affordable stuff. eBay shoppers are as price sensitive as any other shoppers.

Pricing is supposed to be market sensitive and time sensitive, unless you plan to pay storage costs and hire staff to manage high priced inventories, sensible competitive pricing needs to be present. Without affordability, only luxury items can be sold. Luxury items on eBay demand high priced marketing or promotion. Affordable eBay pricing in the startup gets the product into the public eye in a trial stages and allows for critical consumer feedback. Chokehold pricing holds the entire venture back.

3. Failing to Offer trial/marketing starts

eBay is an excellent way to trial market goods. eBay assists their business sellers by orchestrating selling mechanisms that helps narrow potential buyer groups. eBay members can locate user groups and match their purchases of like items with marketing emails and offerings geared to come up in their searches. eBay furnishes a like items survey when logging in, eBay items and listings will appear in front of your customers then. If you don’t start listing eBay items, nothing can appear.

One businesswoman I knew insisted her work would travel by word of mouth and no eBay promotion or advertising was necessary. eBay success didn’t require any effort, right? She had “heard of” these things happening and pinned the entire weight of her convictions on this fantastic supposition. By authority of having sold no units she proclaimed her expert opinion. Trial versions offered at cost on eBay could have generated feedback signaling market disinterest and saved labor, time, goods and money.

4. Labor Management Gaps

One of the biggest fallacies in the modern world is that if you build it someone on eBay will buy it. Manufacturing 100,000 unwanted widgets in blue does nothing to alleviate eBay demand for out-of-stock pink widgets. A laborer who insists on meticulously raking the left side of the front yard but hems and haws when it is time to get the right side done is still only doing half the job. With sales flat, production runs should exercise the production possibilities frontier.

eBay works to furnish sellers with an efficient platform to sell their goods as listed. All responsibility for production runs and costs incurred is paid and assumed by the eBay manufacturer and eBay member seller. Nobody on eBay is going to hold your hand and tell you how to price things or how to handle shipping problems and responses to potential eBay customers. On eBay you cannot “wait for the phone to ring”. Sales happen one way on eBay: a member lists goods for sale item by item.

Providing a decent back supply of materials and finished products is a rational way to operate. Try to avoid listing items not produced or not sourced as to materials before you can verify you can make them. Research prices and compare listing detail from competitors on eBay. Make sure materials origin, return policy, and substitution policy is states in each eBay listing. Refunds and undependable sales can result in negative feedback.

5. Shared Risk

Whether the venture is a million dollar underwriting or a five dollar packet of stationery envelopes, the degree of risk for a company can be the same. The exposure, or the degree to which the risked resources will damage the entity, is another kettle of fish. Exposure can result in bad publicity, canceled orders, and plant closure. A decision made to save seventy cents over margin profit or refusal to take an order with stated prices as published could spell the end of an eBay business. A successful online business gets a shot in the arm from every eBay sale.

6. Abuse Your Partners

After one brutally hot day purchasing business materials from various industrial sources, my eBay business partner watched me fish out my last bill to pay a vendor who would only accept cash. I had no more money, only a credit card. My eBay business partner briskly drove all the materials to her home, stopping after the freeway portion of the ride to some hole in the wall taco stand she said she stopped at once a year. A sign said, cash only. As I stood there, she ordered and paid for her meal. After she sat down, some minutes passed. Then she asked if I wanted to borrow some money.

This scenario is an example of some of the ways people intent on success in a eBay business venture lose track of how they treat people and how important those relationships are. People doing business on eBay think that because there is money at stake but there is not tangible system to enforce them to do things the right way, they can make their own road.

7. Unauthorized Publicity

On a buying trip with a client, in many instances we ran into contacts of the man’s business partner. Many of these contacts seemed very knowledgeable indeed about the costs and materials origins and sales plan. Evidently as an ego trip the business partner had shot his mouth off playing poker about the business plans. Impressed by the company he was keeping, the man had spilled highly confidential and strategic business venture details.

8. Southern Discomfort

Playing fast and loose with business suppliers on eBay can get you burned. eBay members have inter relationships you may not be aware of. Making excuses to one eBay customer or online buyer should never become an eBay policy for doing business. Keep a record for every time your business or company tells an eBay buyer their order will not be met or that shipping problems will delay mailing. Find a way to communicate with buyers that spares your eBay member rating abuses. The chance that they could be your best customer is Murphy’s Law.

9. Build a Positive Member Rating

The eBay system is worked upon an honor system with rankings. Certain classes of eBay sellers are Power Sellers, and some eBay members are just starting out. Changes in the way eBay does business and conditions within the company have initiated changes in the way eBay Buyers and Sellers can return feedback on each other’s experience vending and selling to each other. These policies have changed. Make sure you know your rights before you start selling on eBay.

Many eBay sellers have earned their ratings and selling feedback under a different eBay system. Check eBay policies and forums to be sure you are operating in accordance with intended eBay practices and standards. A few bad business moves that seem like common sense and your beginner eBay seller’s rating could be ruined forever. Be aware that buyers from your eBay store or listings from sellers with few to no ratings may be “returning” Buyers with a list of bad habits. Tread carefully.

Use a genuine eBay rating for your business under your business name and build its integrity by purchasing materials for your business whenever possible. Be sure to state all your mailing and return policies every time you list an eBay item for sale. The shipping cost may do some damage to your bottom line but if there is no other way to establish at least ten positive ratings, you will probably not achieve any worthwhile eBay selling volume. People looking for gifts or other items will not purchase from new sellers unless they feel they can return the item.

Save on gas and start buying everything for your eBay business you can online. Buy small piece goods like beads or electronic fittings, really anything you can. Try to find other people doing the same thing, establishing a business rating by selling on eBay small pieces of ribbon or things you find on sale. Try to take advantage of free eBay listing times to dedicate to prepared sets of items you can afford to let go of and mail cheaply. Try to find a group of people who want to support your eBay business sales effort and let them know there is way they can help you get started.

10. Know When To Start Over

The learning curve for eBay is steep and does not forgive new business sellers who make consistent mistakes. If you have bumbled some eBay listings, priced things too low, or had problems getting the hang of mailing eBay items, it may be time to close your account and start anew. If the eBay business sales effort is not looking cost sensitive and does not pencil out, close your eBay account and try to market your goods at a local swap meet or store. Take a tax donation by contributing the items to a local thrift shop or charity.

Tags:   business · customer service · ebay · internet · market · marketing · online · pricing · product · startup