Book Review: eBay Rescue Profit Maker

eBay Rescue Profit Maker Kevin W. Boyd Alpha Books/Penguin Group 2009 233 pages; $16.95

With the economy teetering, jobs vaporizing, and a world-wide belt-tightening in progress, Kevin Boyd is again riding in to the rescue — with "eBay Rescue Profit Maker," his latest eBay how-to book aimed at helping established sellers prevail in tough times.

The cover taunts us with the challenge, "If you want a profitable business instead of a shipping hobby, this book is for you." In Chapter I "shipping hobbyists" are defined as eBay sellers who do not increase their gross sales on the site nor even know their level of profitability, yet continue selling the same products month after month, sometimes year after year. Boyd tells us the antidote for this business treadmill is deep product analysis with the goal of uncovering the increasingly elusive profitable product.

Become the Second Mouse

Eschewing the "early bird" principle, the heart of Boyd's business model is the "second mouse." Because the trap is sprung on the first mouse, the second mouse gets to eat the cheese: "The second mouse may not be the first to find the biggest hunk of cheese but it has the lowest risk." In business terms the second mouse is called a market follower. The follower avoids the risks of leading the pack, hence makes fewer product investment mistakes, selling only products proven to be profitable. Boyd tells us this is the model he uses for his personal eBay businesses and the one adhered to in this book.

The book has nothing to do with finding or marketing one-of-a-kind collectibles, rather the goal is to improve seller selection of replaceable products by showing how to avoid low profit items ("hot" or otherwise,) in favor of high-demand, low-competition products of proven eBay profitability. To put it mildly, Boyd is methodical in his search for what he terms " the golden egg."

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No One Said it Would be Easy: Doing the Research

This book is not for those averse to paperwork. Here the path to separating the wheat from the chaff in terms of product selection is strewn with worksheets and check lists, and forms in sufficient number to require a binder. Boyd provides the worksheets for free on his Web site. There readers can download the various PDF file forms required to implement this system; samples of each are also shown in the book.

The required research is formidable. Here is the detail of the first worksheet — Product Idea Worksheet #1: 1.keyword category; 2.manufacturer contact info; 3.total on eBay; 4.total sold; 5.sell-through rate; 6.average selling price; and 7."passed all tests."

Subsequent worksheets each contain at least seven columns of criteria, the last being "passed all tests," and include: Giant Competitor Worksheet; (Specific)Product Idea Worksheet; Product Idea Worksheet With Analysis Tools; Product Profitability Worksheet; Successful Product Worksheet; and Product Supplier Worksheet.

Each worksheet comes with detailed, step-by-step instructions, and there are a number of other forms to be completed within the book. But after conducting a doctoral-thesis worth of research, page 73 offers the user a dispiriting possibility: "You may be disappointed to discover that few or maybe even none of your products passed all the tests. I understand your frustration that a lot of effort did not produce any approved products."

Boyd then points out that at least we saved a lot of money buy not filling the garage with unprofitable products, and advises us to just pick ourselves up, dust ourselves off, and start all over again.

Resources for Sellers: HammerTap, Worldwide Brands

The book is succinct when it comes to recommending software market and product analysis and sourcing tools. Though he mentions freeware, Boyd claims the time spent determining if a product has a favorable combo of sales, demand and competition can be reduced from hours to "about 20 seconds each" using the following two software tools: HammerTap and Worldwide Brands' Instant Marketing Research.

Boyd likes HammerTap, a monthly subscription service. This tool helps determine if a category is worth pursuing, finds a profitable niche within the category, analyzes the top sellers and discovers their most successful products. It also allows for micro-analysis such as historical data on seasonal items (when sales on a seasonal item peaks,) and the minutia of supply, demand and sales of specific products. A 14-page appendix at the rear of the book gives detailed information on using HammerTap.

For sourcing, Boyd recommends Worldwide Brands' Instant Marketing Research (IMR), which requires a one-time, lifetime use fee. According to Boyd, the product sourcing membership provides access to databases of hundreds of reputable light bulk, standard, and large volume wholesalers, importers liquidators and drop shippers.

Finding reliable, legitimate wholesalers is critical as the market is fraught with middlemen posing as wholesalers, and this product covers the entire Internet. Appendix A gives detailed instructions on using Worldwide Brands tools. The important 16-page Chapter 6 deals with the pitfalls and red flags in "Finding Reputable Product Suppliers."

Accentuate the Positive

Acknowledging that most MBAs and CPAs don't believe a "positive attitude" affects profits, Boyd argues that the combo of positive attitude and mindset along with specific knowledge will lead to professional-sized profits.

(Continue to Page 2 for tips on pricing, listing, shipping and more.)

Boyd's advice in terms of more pragmatic aspects of running an eBay business also includes:

• Avoid low-priced, low-quality items. It takes as long to pack a $5 item as a $50 item. (exception is a 'bait product' used with a link to an eBay Store.) Cheap quality means returns and negative feedback.

• Minimum sell-price barriers. Boyd sets up the following for beginners ($10-$50,) advanced sellers ($50-$200) and Professionals($100 and up to individuals $500-$10,000 to businesses.) In fact, Boyd feels that no one should sell anything with less than a 25-percent profit margin or $10 profit. (This flies in the face of many successful low-profit, high-volume eBay sellers who follow that model, but so be it.)

• Avoid hot-selling consumer electronics. While it may be cool to deal in the latest gadget, it is the most fiercely competitive, hence lowest profit market on or off eBay. (Witness the demise of CompUSA and Circuit City.)

• "Spy" on your most successful competition and mimic their methods before listing. We're not sure why Boyd uses the word "spy" which is strewn throughout the book. Common sense dictates that we monitor the most successful sellers of target products and copy what looks good before attempting to sell. Not surprisingly, there is a "Top Seller Analysis Form" with about 50 possible options on it both shown and downloadable.

• If you drop-ship, do it prudently.There is an entire chapter devoted to drop shipping which Boyd terms "eBay in Overdrive" On the surface, it's the lazy man's heaven: the seller lists an item on eBay, when an order is placed the seller contacts the distributor or wholesaler who ships the item charging the seller the wholesale price and shipping charge, leaving the seller to collect the profit without having touched the product.

  The problem is your eBay reputation is in the hands of the drop shipper; if they are not reliable you can kiss your good feedback rating goodbye. Further, you are not on top of your distributor's inventory, if they are back-ordered, your buyer will have to wait. For this reason Boyd recommends keeping at least a week's worth of inventory on hand. And naturally, the topic comes with its own form — the "Drop Shipper Inventory Check List."

• Pay attention to customer service.Customer Service, including shipping, is covered in detail with sound, solid advice. Boyd asks, "Have you ever had a (professional) who was competent but rude, condescending or discourteous? Were the person's abilities overshadowed by his or her behavior? Did you end up finding another professional?"

  Many eBay sellers seem to forget the common courtesies they require from others when dealing with their buyers. ( I personally have received so many appreciative feedbacks for simply packing an item properly, including a "thank-you receipt" and shipping quickly that I have to believe that many, many eBay sellers neglect this critical area of the transaction.)

  Regarding international shipping, Boyd points out that a 4-pound package via FedEx or DHL costs $100 while through the U.S. Post Office the same package costs $30. In my experience, the USPS is superior in domestic delivery as well as international, both in terms of cost and getting the package to its destination. Delivery Confirmation slips are a requisite on all USPS domestic packages both to reassure antsy buyers that their item is on the way and by warning off the would-be-larcenous against filing false claims.

• Avoid the youth market. To avoid deadbeats, Boyd advises us against marketing to teenagers and college students as he says they are often negligent in terms of paying for what they purchase. He also recommends not selling anything for under $20 and particularly for under $10 as these items generate the greatest number of "whiners, complainers, unpaid items and threats of negative feedback…" Boyd's a bit harsh on the young and bottom-feeding buyers, but unfortunately, in my experience, he's right.

• Use Proven Listing Strategies. Under "Listing Techniques and Strategies" Boyd crams nearly an entire book's worth of advice into a single chapter. There is a page or more on photography, shipping rates, choosing the best starting time and price, etc., salient tips on when to use a reserve price (don't), when to overcharge for shipping (never) and the importance of keywords (80 percent of buyers find items via keyword searches).

  Plus, there's this little gem on misspelling: it's smart to correctly and incorrectly spell difficult keywords within the header and description since searchers may either spell the word correctly or incorrectly thus you can double your potential buyer pool by appearing ignorant, (thus proving at least ignorance can lead to sales, if not bliss.)

The Bottom Line: If You're Up for the Effort, It Will Pay Off

They say economics is the "dismal science" because one has to look at everything. For those adverse to paperwork-heavy research, or short of spare time, Boyd's meticulous regimen may seem dismal indeed, particularly since it must be combined with iron will: if you really want to sell widgets and the research tells you widgets are not profitable enough, you do not sell widgets.

On the other hand, those who can stomach being super methodical will appreciate Boyd's system. For those desperate sellers who have hit a dead end with their eBay products but have a few ideas for new items, Boyd's system may well be worth the effort. In fact, even for those contemplating selling on eBay, Boyd's book is comprehensive enough to be worth a read.

Frank Fortunato is a seasoned online book seller and frequent contributor to ECommerce-Guide.com.

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