4/16/2008

Learning to become an eBay Online Millionaire - the training continues

Continue the eBay Online Millionaire training - research and strategies

Today, I'm continuing the basic research, but also keeping some MP3 interviews going in the background.

Notes from these:

Mike Enos - Your profit has to be at least $10 to be worth it to you. It's not how much sales you are doing, it's how much profit your getting. You want to pay as few fees as possible - keeping your overhead low. eBay fees are like taxes - you pay as little as you legally can.

And don't trade one job for another - where you're sweating all over the place to get your shipping done, like thousands of boxes a week. Hire someone for that when it gets profitable (watch that overhead).

Sydney Johnston - eBay is the introduction, not the whole game. Upsell every sale - buys a pair of ear-rings, send them an email: "Thanks for your purchase, did you know we have a matching bracelet for those?" They buy the bracelet, "Thanks for your purchase, did you know we have a matching ring for that?" You want to have a web site and get people over to that web site and sell from there. Means you have to sell on eBay first, but that's just the start. Once you have their email, you can then move them over to the website for off-eBay sales. You want multiple profits from each customer - your first sale doesn't have to be huge, just get that customer.

You don't personally buy on emotion. That will give you losses every time. Do your homework first. Find out if what demand there is for the product first (then find your supplier). You don't personally get involved in this - it's a business, get over it.

She actually likes to stay below everyone's radar and take her sales off-eBay rather than making all her sales through eBay. Then no one is watching what you're doing and what sales you are making, what products you are selling.

Get only reputable mentors to listen to (that includes this blog - compare what you are hearing to other standard business basics.)

You want to find the system that eBay runs on and then work that system. eBay works hard to be a silo and keep their participants right inside their set-up. And so have rules like not putting your own website address on their listing (it's actually their listing, not yours - you are paying them for the privilege of using their website). But they don't control your emails to your bidders and so that is where you can shine.

What started today's post - simple math on making online money.

What got me going today was simple math. Let's start at making $250 a week, which would make you a powerseller ($1000/month). If you are making $10 per sale, then you need to have 25 successful auctions per week - meaning at 50% success rate, you have to have 50 auctions running and ensure your other factors are accurate, like headline and copy, photos, etc.

It's just that simple. If your auctions are completing successfully at 80%, then you are going to need 40 auctions going each week.

Just work it backwards from what you want or need that week. When you find items that produce more profit - or have a higher success rate, then you'll need to run less auctions. Simple.

Playing Follow the Leader Research to start off your eBay career
From Instant Auction Profits Blog:
"Now that you know a little about researching certain items, let’s discuss finding hot markets. I use a technique that I like to call “Follow The Leader”. I call it that because that’s exactly what I do. I let other eBay sellers lead me right to the hot markets!

"As you begin researching items that you are interested in on eBay, you will come across many auctions that are selling for high prices. Many times, these auctions are listed by top notch eBay sellers. When I find an auction that interests me, I like to do a little digging into the seller’s eBay business. eBay allows you to get an insider’s look at their selling activity. This simple research technique has uncovered countless profitable opportunities for me.

"Here is exactly what I do. When I find an auction that interests me, I look at the box on the right side of the auction page that is titled “Meet The Seller”. The first thing that I look at is the number of feedback that the seller has. This is the number in parentheses right next to their seller ID. If they have a large number of feedback, chances are they have found one or more profitable markets that they are selling to. But don’t be fooled by a small number. They could just be getting started in a very good market. It takes a little more digging to uncover the truth.

"The next thing that I do is look at all of the items that the seller is selling. You can do this by clicking the link titled “View Seller’s Other Items”. If the seller has an eBay store, you can also view the items in their store by clicking the link under “View Seller’s Store”. This link will be the name of the seller’s store and will have the red eBay store icon next to it. Once you do this, you will be able to see exactly what the seller is selling.

"Next, you want to look at the seller’s completed items. Once you are on the page that lists the seller’s items that are currently for sale, simply click the box next to “Completed Listings” on the left side of screen. The results will show all of the items that the seller listed over the past 30 days. Look for sold auctions with the bid amount in green. This list will give you a good idea of where this seller’s income is coming from.

"Once you take this sneak peak into other seller’s eBay business, you can see what items they are selling on a consistent basis. If they made a lot of sales over the past 30 days, chances are they are selling to a hot market. This is a market that you want to be in. Don’t worry about competing with them. eBay has over 150 million users and counting. No one can monopolize any market. I have successfully entered many markets by using this exact technique….and I continue to use it successfully."

When you follow their lead, you can then study up on what they are selling, then research those particular items to see what you can sell profitably.

HammerTap (nor does eBay) readily disclose the items that have sold well. You can go to eBay's quarterly summary that tells what the best growing categories were for that quarter. Then, you can use HammerTap to drill down into those categories and find the selling profitable products, based on keywords.

Searching for Power Sellers - not as easy as typing it into Google

That's what I tried to do - since eBay doesn't just cough up a list of these for your research.

One approach - go to http://popular.ebay.com and find what is being searched for. Recall yesterday's eBay Online Millionaire lesson on the difference between trends and fads. I'm purposely not following the advice above, as I'm not going to follow my own "wants" or "what I'm interested in". I'm instead looking for what people are looking for.

Let's stay away from collectibles and one-of items, and look for stuff that is being routinely manufactured and should be a rising trend. Like satellite radio. Look this up on HammerTap (my version is Deep Analysis and not as full-featured as the latest HT version). Comes in at 63% completed auctions, with one seller doing 21 sales through Buy-It-Now (BIN) of $159. She's been selling a lot of Garmin products. Look her number up through HammerTap. She's got a 77.44% success rate. Did over $73K in sales during last 30 days. 375 items sold. She does this mostly through BIN. Ideal. Check out her sales page for the top item - she selling it way below list and says she ships immediately.

See, this is how it goes. Next, I'd check for competition for that exact item. See how many are being sold - Oh, this item has a 74% success rate and averages at $299. Now we're getting somewhere. A little more research and then I'd start looking for sources.

But you can see how it goes, eh?

Digital Products Kerfluffel - solutions you can use.

Interesting stuff here. eBay recently dropped digital downloads off their cliff. Now you can only sell CD's and DVD's right there on eBay. However, you can post classified ads for people to buy your product. Socrates Socratus, long a leader in digital downloads, is working up software which will burn and dropship your digital product to that customer. So the calvary is on the hill, ready to charge.

He gives two free reports (for your email), which give a lot of good ideas for this. He says that your classified ad last for 30 days and can have an opt-in form on it - means this ad can give you plenty of leads. Sure these are more expensive than auctions, but can potentially reach far more potential leads (buyers) than their auctions ever could.

And one of these PDF's (by John Thornhill) gives you a link to SwiftCD, who will burn your CD and drop ship it to anyone you want. Prices start at $3.69 - and drop after 2,000 (sell that many...)

Another link is Kunaki, which will manufacture and dropship - gives you a breakdown of shipping costs, as well as options - $6.75 from New York to my house in Missouri, 1.75 for that CD.

Your other option is to have these bulk produced and shipped to your house, then you can do what you want to move these items. Why this route? Your time is worth more than money. If you have several CD burners and professional labeling printer, plus printed mailers - then you're in business. But don't expect to send something out with some scribbling on it and expect to up-sell or cross-sell that customer on future products.

Kunaki looks good on this, but if you want to ship them yourself, try out Discmakers, who have a wide range of services - including automated disc burner/printers. (Plus, they routinely send you some very snazzy catalogues. You can get some great deals on bulk printing with beautiful packaging (lots of options) - but then you will have stacks of these that you need to sell on eBay.

Strategy here would then be to sell a few via Kunaki and then once you prove the market, get them produced in bulk (light bulk to start with) and start listing them regularly. (Of course your price would include their cost for shipping and your "handling cost" which would be the price Kunaki charges you for manufacturing ($1.75). What you get in the auction (minus ebay's fees) is all profit.

At this point, all your techniques for marketing (keywords, product research, etc.) come into play - since now you can create any sort of ebook from all that PLR material being given away regularly.

* Wild idea here * Create and format your book and publish it via Lulu. Set a comparative price to otehr similar books on Amazon (you can actually arrange Lulu to put it on Amazon for you as a printed book). Now, take that same digital file and create a download version - which you then offer as a CD through Kunaki. Of course, you state the price is $24.95 in print, but they can have the CD version (with all these listed bonus books) delivered right to their door.

Got another MP3 from Mike Enos

Here's the notes (I'll make the key points and then analysis in italics):
  • Basics of eBay - easiest way to get started on the Internet: limited investment, short learning curve, no worries about getting traffic
  • Advantages of eBay business - start and stop it when ever you want.
  • Grow it at your own pace.
Getting started:
  1. Learn how eBay works at eBay site - sign up and learn.
  2. Sign up for PayPal - this is 80% of your payments.
  3. Get your feedback up beyond 50. Do this by buying ebooks from different buyers until you have the feedback total you want. (this is still possible at this writing - but track your sellers as you go, to ensure you don't buy from the same guy twice. Another idea - get products with resale rights.)
    Reason for increasing your feedback is to build trust. People won't buy from you with a feedback score of 0.
Establish Your Goals (business goals):
  1. How much time dedicate to building the business?
    How much money do you need/want to make?
    What kind of lifestyle do you want?
    Do you want employees?
    Money isn't an end in itself - what are you going to do because you've earned that money - it's only a tool.
  2. Set goals - short, medium, and long-term.
  3. Figure out how much your time is worth. How much do you want to make this month - means you have to make so much per week, per day, per hour you work at it. (note: a 40-hour work-week will need $200,000 per hour, 50 weeks a year.)
  4. Start figuring your overhead - opting for high-speed over dial-up, you save time - but that investment has to pay for itself on a monthly basis.
  5. You can grow your eBay business at your own pace. Start part time while you pay your bills with day job. Little pressure on you this way.
What do you want to sell? Sources

a. Drop Shipping - Don't get the most-used drop-shipper with the most demanded product. (See comments about trends vs. fads.) You don't want competition - if you can find it at Wal-Mart of a big-box store, don't list it. Don't copycat or sell what everyone else is selling - sell less competitive items. (But you might have to start by mimicking high sellers - great training.) Drop shippers might have backlogs when they run out.
b. Wholesale - Make sure they aren't selling on eBay themselves. Buy and stock the minimal possible. Don't use the largest wholesaler in the nation, use a smaller wholesaler and get as close to the manufacturer as possible.
c. Importing - low, low price. expensive to ship, language barrier, money tied up for months (containers at a time is thousand$).
globalsources.com
alibaba.com - PLR manufacturers
d. Refurbished goods - low competition, awesome margins; go to manufacturer's website and type "refurbished" in the website, then look if resell on ebay
e. Liquidated goods - surplus or auctioned off; no competition. search for "liquidated goods" liquidation.com (check your prices) ubid.com
f. Local auctions - have someone check these items on the computer
g. Knowledge product (information product) - limits competition if you develop it yourself. (Nowadays has to have a CD or book - see drop-shipping solutions above, unless you sell it as a classified ad.) Make sure it's a quality product and deliver more than expected.
h. Consignment selling - selling other people's products. Concentrate on higher-priced items.
i. One-off's (one-sies) - only if high priced (high margin)
j. No low-cost items unless you can make it up in volume (or are using this as a loss-leader to get qualified leads/mail-list subcriptions)

How to get more bids and higher closing prices -
  • Get your feed back up.
  • Add testimonials.
  • Compress your pictures.
  • Add audio - brief.
  • Add video to show people what to do.
  • Make your ad attractive and easy to read.
  • Use high-quality templates.
You see that Mike covers some new stuff I'd not told you about before, but the essentials are the same. Mike got into this because he was earlier a computer consultant - and was spending 12-hour days away from his new son. Discovering eBay helped him get his life back.

Another key point is the section on business goals. He emphasized - as do every mentor I find in this research - that you need to apply real-life business basics to this and run it as a business. This includes setting and achieving goals. If you run this as a hobby, you wind up with the results of a hobby - just a drain on your bank account and time.

Getting your high feedback scores

Just as a note here - something that I've been doing as I listened to that MP3 above. For right now, there are still a few of these informational products left on eBay. They are mostly .99 each, with no shipping. So getting your feedback score up past 50 will cost you just under than. My idea is to ensure that your products also have resale rights and are worth reselling. (If you're worried about your wife or some family member discovering that you're selling "Karma-Sutra Sex: How to Make Incredible Love", then stick to eBay How To guides. (And you can bundle all these eBay how-to guides under a single package and re-sell them for a lot more over and over and over - because you have resell rights...)

At I write this, there are even .01 auctions still going on. I did buy at some stores, where I don't know that I'll get feedback, but that's 3 cents before I discovered that fluke. Just re-did the search to have auction only, with BIN and free shipping.

(An interesting one was that one seller gave me the option of paying for "insurance" for that digital download... made her look shifty, didn't it?)

Another interesting point is that I signed up for a mail list in order to get one mega offer (200-some ebooks).

Five Minute Research Recipe

(From HammerTap's forum:)

"Now, you can see that in five minutes, I could look through the Findings window and cook up answers to the following questions:

  • What are my chances of selling? (LSR)
  • How much can I expect to make? (ASP)
  • Which Listing Type will increase my ASP and LSR?
  • Which Start Day and End Day will increase my ASP and LSR?
  • Which End Hour will increase my ASP and LSR?
  • Which Listing Duration will increase my ASP and LSR?
  • What Start Price will increase my ASP and LSR?
  • What key Title Words will increase my ASP and LSR?
  • What Listing Features will increase my ASP and LSR?
"Now the recipe is this—create a smooth combination of these options and your success will be higher than the average and your sales price will also be higher than average."
- - - -

Well, run out of steam for this evening. Still have about 15 more cheap items to buy in order to have my 50 feedback above. Already getting some of this feedback in, but these guys don't agree on how to ship products or deliver feedback at all - so it's all over the place. And some of their emails don't say what their ebay user name is, so leaving feedback could be problematic if not for the records I'm keeping.

But I'm certainly getting an idea of what good sales pages look like. And why you should spend just so much time on them... Buyers are already pre-sold, you are just pushing them over the edge - so your copy should reflect that. Have to remind myself to tell you about this beautiful sales page which must have taken days to build - and only got some 19 sales out. Good money, but not efficient (as far as that $200,000 per hour above).

Tomorrow will show more product research, as I check out those links we got from the MP3 above. See you then...
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