Book Review: eBay Performance!The authors of this eBay selling primer are experts in their fields: Robin Cowie is president of WorldWidebrands, for years an eBay licensed provider of wholesale merchandise contacts for eBay sellers, as well a being a regular speaker at Ebay Live! and eBay University. Jen Cano is vice president for HammerTap market research specializing in online businesses and their patterns what makes some succeed, other fail and is a contributing editor for eBay Radio. Credentials in place, they have collectively produced a clear, readable, almost fool-proof guide to discovering what sells on eBay, obtaining viable product and selling it in an effective way. Rather than the collectibles or one-of-a kind entrepreneur, the book is aimed at those seeking to find and market renewable goods itself no mean task in today's crowded and competitive eBay selling market. In terms of clarity, little is left to chance here, beginning with the unusual device of placing each co-authors picture by their contributions in the text. The book is well-illustrated with graphs, charts and slides of actual research as well as highlighted sidebars summarizing each chapter's salient points. The book begins with what they term the Turnover Principle, using the apt analogy of a juggler's three-part process of release, anticipate and catch, with the juggler continually adding new items to hold the audiences interest. Segueing from entertainment to eBay selling, this translates to Research, Source, Sell. With the emphasis on research. Research
Selling Success With Market Research & Product Sourcing
By Robin Cowie and Jen Cano
HammerTap LLC & Worldwide Brands, 2007 168 pages.
eBay sellers waste enormous amounts of time and money jumping into the breech with products that nobody wants. The antidote is research. Cowie tells us research must reveal what customers want to buy right now, how much they are willing to pay for it, whether it's profitable to market, the size of the market, and last but not least, whether the market for an item is rising or falling. In online selling we're advised, there is a danger in relying on "hot lists" since today's hot items may be peaking on the market and fizzling in the near term. Further into the text, Cano warns against using hot lists without an alternate plan a means to either increase profit margins or bail out of a weak-performing item by liquidating stock and breaking even. Using the 'hot list' example of jeans, Cano emphasizes the need to research in depth. It's important to run a report on each style, model and size for overall LSR (listing success rate,) and ASP (average selling price,) for potential sale items, including profit margins verses other brands. For instance, the top-selling jean may cost too much at the wholesale level to make a viable profit relative to what the competition sells it for, but the second- or third-best selling jean might be available at a price so much better than the top seller that it will yield better profits despite a lower conversion rate.
Further, don't try to compete with the big boys: A corporation or seller with great buying power may be able to get a lower wholesale price and undercut your selling price from black to red ink.
Cano offers common sense suggestions such as bundling complementary products when profit margins on a single item are too narrow. Using the real-world example of a Nintendo game console sold on its own verses bundled with games and controllers, we're shown that the sell-through rate jumps 15 percent in the bundled package as does profit, since the profit margin on the accessories are better than the console.
Bundling complementary items into fewer listings also helps keep fees down. Conversely, we're advised to break-up and sell sets in their individual components if that nets more revenue, as it often does with TV and movie DVDs. Combined shipping on items can create a sense of buying urgency, and undercutting your competitors shipping charges never hurts. At the very least, your shipping charges should be competitive as all online buyers resent gouging on shipping or "handling" charges it can make the difference between a conversion or failure.
Finding what to sell is just the first leg of the three-part challenge of successful eBay selling; tracking down the supplier is, if anything, more complex. Here Cowie the CEO of WorldwideBrands, a company that specializes in finding wholesalers, has particular expertise. First, he tells us what to avoid: search engines 98 percent of legitimate wholesalers simply do not advertise on search engines according to Cowie, in part because they attract small retailers rather than the Sears and Wal-Mart-sized companies they seek as customers.
However, product sourcing middlemen posing as wholesalers do advertise online under keywords such as "wholesale," "drop-shipping" and the like, promising amazing systems that do not work, or selling useless or false information that Cowie claims has duped thousands of inexperienced people out of millions of dollars. The book offers much useful information on identifying and avoiding middle men posing as legitimate wholesalers.As far as finding stuff to buy, Cowie recommends these methods of locating product sources:
- Going directly to the source: Most manufacturers will not sell directly to a retailer, but they will supply you with a list of their legitimate wholesalers. Finding the manufacturer often involves legwork such as locating the product in a store. Usually, checking the box, manual, serial number or UPC code on the product will uncover its maker. (Wikipedia.com has good resources to trace bar codes to the manufacturer.) Once you've obtained a phone number, it's important to fight your way through the automated phone prompts to a real, live, sales rep. He or she will supply you with a list of the companies wholesalers. Cowie advises caution with small or start-up manufacturers as you run the risk of unreliable delivery or the company going out of business.
- Trade shows: These offer the advantage of meeting face-to-face with the manufacturers and the possibility of seeing new products before they come out. Tradeshows.com is a good source for locating trade shows.
- Directories: Another resource can be reliable directories that list manufacturers and trade shows, as well as trade publications. The book goes into considerable detail on all aspects of sourcing, including dealing with wholesalers, setting up vendor accounts, trade and bank references, liquidations, overstocks and importing etc., that should prove of value for any novice to the wholesale buying process.
Here again we're advised to look dubiously on fads and hot items and do more research. Cano reminds us that every product has a life cycle: it's introduced, it grows, it matures and it begins to decline. Often, by the time it makes a hot list or is recognized as a fad, the market is saturated with sellers. The trick, Cowie tells us, is finding and identifying emerging markets. On eBay that means finding items with bid rates growing faster than listing rates. The authors offer several suggestions for sleuthing out coming trends:
- Most major search engines offer keyword tracking tools that will show the number of people searching for a given item. Software that provides product sourcing and in-depth market research tools (such as that offered by the author's companies.) that can indicate how well a product will sell online.
- Print media such as newspapers who publish numbers and demographics for shifting trends, and consumer magazines that are designed around niche products, hobbies and markets are a good reference resource for building niche product lines.
- Talk to salespeople at malls and brick and mortar stores to find out what is selling.
- Movies and TV drive product trends. If you know a blockbuster film is going to be released you can begin stocking relevant products such as Spiderman, Curious George and so on, before the items become pricey on the wholesale level, and before the selling stampede is in full force.
- There are trend spotting Web sites such as Trendwatching.com, ifluxinsights.com and Trendhunter.com that can provide useful clues.
The "convenience" of drop-shipping receives a lot of attention in the book. On one hand, drop-shipping looks like entrepreneurial heaven. It offers the advantage of ordering as you sell not needing to tie up money or space by stocking product, as well as avoiding the time-consuming process of packing and shipping orders. It may be particularly useful for those starting out or trying a new product line who do not want to expend their own money on a new product without a proven sales record, the authors advise.
The downside is you must relinquish control and some profit. If your wholesaler or manufacturer is tardy in shipping or is back ordered on an item that you have sold you'll have disgruntled buyers who may turn to negative feedback or at least be hesitant to buy from you again. Further, when you order items piecemeal, you will pay the highest wholesale price and a premium over actual shipping cost passed along for handling by the supplier. Those considering drop shipping are advised to strongly establish the reliability of their source before committing to this business model.Cowie and Cano tell us selling factors that maximize success rates again involve research, such as determining the best listing type (fixed or auction,) category, the best starting and ending day, time of day and duration for a sale, the most effective title words, starting price and listing features. While research can answer some of these questions, experienced eBay sellers know that experimentation, better known as trial and error, are needed for others. Both authors communicate well, and while the liberal use of exclamations might annoy the curmudgeons among, the book is an honest effort, well-thought-out and presented, with remarkably few sales pitches for the writer's respective companies. (Though Cowie does mention he was a producer of The Blair Witch Project and manages to weave the story of that indy-film success into the text.) In all, veteran eBay sellers may find much of what is offered here elementary, but for those considering entering the eBay market or who are at a dead-end with their product line and at a loss for finding fresh, viable product and wholesale sourcing, the book is a resource, crammed with solid, in-depth advise delivered in an easy-to-understand style. Frank Fortunato is a regular contributor to ECommerce-Guide.com.
|Do you have a comment or question about this article or other e-commerce topics in general? Speak out in the SmallBusinessComputing.com E-Commerce Forum. Join the discussion today!|
4 Ways DNS Can Accelerate Business Growth This DNS eBook describes how DNS has developed over the years to support business growth as new needs have emerged, for example, advanced traffic...
Unshackling Online Meetings for Business Users More collaboration leads to better achievement of business goals. But getting there requires tools that business users can and want to use, without...
Windows Least Privilege Management and Beyond Devising an enterprise-wide privilege access scheme for Windows systems can be complex. For example, each Window system object has its own access...
Evaluating File Sync and Share Solutions: 12 Questions to Ask about Security File sync and share can increase productivity, but how do you pick a solution that works for you? There will likely be a number of factors guiding...