A market consists of buyers and sellers.
Any price is set by an agreement between buyers and sellers. This may be tacit or negotiated.
The best market has a conversation between the buyer and the seller. Open-air markets are the best at this, since you can see both what is being offered and its quality, as well as play the horse-trading game with the seller. Both of you end up satisfied that you got the best deal for the circumstances. But the buyer who went before and the one that comes after gets a different deal - your price is custom-made for you.
Online auctions are near perfect (especially eBay) as you can see the product info. (As well, you can link product pages to your eBay item, which could contain videos and product manual PDF's, etc.) The seller has to start off the auction at an attractive point, otherwise people go to competitive sellers or suppliers. So the buyer more than likely can get that item cheaper than through brick-and-mortar sources (though in many cases, the ease of buying through eBay and home delivery is worth paying slightly more than driving and paying local sales taxes).
The 4 points of economics at play
Besides supply and demand there is also information and service. All four factors inter-relate with each other simultaneously. You are selling a widget. If you just put up, "Widget. Starting Bid $.99". Not many takers. Add pictures - you get more interest. Add an interesting headline and copy - more takers. This is information at work improving demand.
Now, if you have a poor record - lots of negative feedback - your supplier may not want to sell the product to you. I've heard of several sellers who block problem buyers from bidding on their items. One problem purchase (go ahead and be snide, rude, or nasty) and they don't want to do business with you ever again. This is information decreasing supply. Get on their bad side and now you have fewer suppliers for that product.
More information, or having multiple copies of an item might drop prices. On the other hand, I've heard a local scheme where three Angus breeders in different states are partners. Each has a major sale every year for their "particular" genetic line of beef. Each partner attends each sale and "bids" high on aution items - taking the top line item (usually a prize-winning bull) into the 10's or 100's of thousands. Of course, the bull never actually changes farms, just ownership on paper. (They ship the semen to the partner instead.) But you see, it's a paper deal - not actual. These partners are already sharing resources in this line of work - they're partners. But that top bid drives up all the lower bids into the thousands. And those bulls are delivered. Lots of supply, but the overall value is driven higher based on an inside marketing campaign. Profits are higher.
Service also figures. There is an auto-repair business locally who does nearly no advertising other than the yellow pages - so people can find their phone number. But he is flooded with business. Because he services each person as fast and professionally as he can - because he knows that all of his business is local and depends on repeat and referral business.
Another version of this is adding bonuses - providing better service with every purchase.
Inverses of these also work - like telling them that the offer expires (like auctions). You have a limited time for this offer, and it may never be repeated at this (low) price. That information increases demand and by limiting supply. But the product didn't change, just the artificial time-window. That product might exist in massive volumes at the warehouse, and many versions at the seller's website - but this exact particular offer is going to expire "if you don't act quickly..."
Similarly - "I'm only going to sell 500 of these and then destroy the mold." Disney pulls a great one with their DVD's and videos: "...for the first time this decade, and available only until sold out, we've reproduced this classic movie..." Of course, then they bring it out again in 5 years in a slightly different format - they can do this as many times as they want, since they have the masters locked up in their digital vaults.
And, finally, the common and ordinary can be arbitrarily distinguished from other (identical) products. "I've personally re-edited this from the online versions to ensure that you have complete ease of reading both online and in print." But the text was scraped or downloaded from a public domain site. It's better service, which also increased demand. It also lowers supply, since no one else has this particular version.
7 Types of Headlines - 7 Common Benefits for any product
There are at least 7 types of headlines you can use to attract interest and state/imply a benefit:
- Promise a Major Benefit
- Ask a Question
- Offer a Solution to a Problem
- Give a Warning
- Flag Your Target Customer
- Use a Testimonial
- News Announcement
But you can see that these apply to every product you've ever used or looked at. Take apples and you can think up an example of each of these.
This is an interesting list I ran across in this research and included it as it updates all I've told you (here or in the book) about headlines. Basically, you are providing beneficial information in each category, but they are also a way you can quickly re-write an eBay auction entry without having to re-write all the details and re-do your keyword research, etc.
Otherwise, what I've covered before on copywriting holds. Tell a story, engage the audience on an emotional level, be personal in your writing style, etc.
Essence of eBay marketing is learning to walk before you try to fly.
You want to
- first, sign up on ebay
- second, buy something on ebay
- third, find something to sell on ebay
- sell it
- fourth, find something profitable to sell on ebay and sell it
- find repeating, profitable items to sell on ebay
- cut your overhead
- improve your profits.
Next, go buy something - so you have the buyer's experience. Doesn't have to be something big, just get the data.
After that, look around your house and find something to sell. You have to be able to ship it (cheaply) and something you don't have to explain why it's missing...
Now - sell it. Go through posting on eBay and endure the wait. Ship it promptly, get the feedback (and payment). Review what you just learned from it. (Of course, you are doing all sorts of homework by reading all the PDF's you can find, taking courses, etc.) But get your feet wet - really wet. The more the better.
Next - find something profitable. Means you buy something and sell it for more than you paid, plus fees and shipping costs (not necessarily your time at doing it). But you get a tidy return after you've covered all your overhead (and taxes are overhead).
Here's the next step upward - find products you can buy and sell on a regular basis at a profit. Means you either make the product cheaply, or buy someone else's manufactured product cheaply - then you post it on eBay and sell it on a consistent basis for a profit. The more profits you make, the more you can invest in other products to sell - plus you can set it up to work less at your day job (or quit it entirely) if you can cover your other life-bills.
And now you can start figuring out where your costs are. If you produce the product, can you do this more cheaply? If you buy the product from someone else, would it cost less if you buy more at one time (volume discount). Can you use cheaper packaging?
A hidden cost is your own time. I've seen some people spending 60 hours a week at their auction business. Time is something you don't get back, no matter how you invest it. Being rich is great, but can you enjoy it? If you enjoy everything about auctions and it's improving your health - fine. Otherwise, look to see if having someone else drop-ship your goods will pay you back. The idea that you can leverage your time off into new business opportunities. Or you can work as long as you can everyday and peak out - you can't increase your income because you'd have to hire someone and you can't afford it. So look over your operation and look for time savings as well as money savings.
Improving your profits goes along with the savings. But if you improve your description copy and headlines, this might make more sales for you - at higher prices. Less work, more money for what you're doing. As well, look over what you're selling and see if you can find more profitable items to sell. Keep those proven items, but as you find more profitable ones, keep these relegated to your web-site and sell them for a fixed price. Same goes for loss-leaders, selling something below cost in order to get their email so you can offer them other products. Or just invite them all to your website for fixed (low-price) items they can buy direct without having to wait out an auction.
In all these, you want to offer someone something they can use to improve their lives - at the least work and cost to you, as well as the most income for each item. Play these all back and forth and you'll wind up with a great lifestyle and just as much work as you want to put into it.
Get more prospects through your auction listings
An interesting thing I ran into was the point that you can link to a "more info" page on your own site (while you can't send someone blindly to your site). Now on that page, you can (subtly) offer other offers on that page, such as sign up for special offers, etc. as well as providing links to your online catalogue of products.
To avoid violating eBay's limits - these should really be no more than links at the bottom, although it's arguable that a sign-up box on the right side would be permissable, as well as a list of product categoriess and/or PPC ads there.
But that's a hot, new cross-over business idea for your marketing. Leverage your auctions to get leads to your site - without violating eBay's silo rules.
And if you are personally shipping the product, make sure you include a flier or catalog - at least a single page with this month's offer and your website. Info products on CD - simple, give a PDF catalogue with all your links included, plus a form that sends data to you. Bonus for them, pre-sold lead for you. Don't forget offering the up-sell version to that product, while you are cross-selling them.
Now you can also harvest the emails of all bidders - offer them all a free bonus on the web site for visiting, another for signing up. And of course, there are always sending them to a thank you page with these offers on them.
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That's about all for today. Studies continue. I'm getting into the hands-on stuff tomorrow and will tell you about my test-cases as I go.