eBay

Have you heard about the newest changes to eBay fees?  I think most people are naturally hesitant to accept change. But eBay needed to change, so I hope these changes will improve their reputation with sellers and buyers.

Amazon has been sneaking up on eBay  for years. Many buyers began to lose trust in eBay after being scammed by dishonest sellers. Sellers on the other hand tired of extra fees and eBay’s seller policies. After the change in fees were announced, many sellers are angry about the changes. Blogs outlining the changes and even eBay forums have overflowed with comments.

To me, these changes seem to be targeted at building trust with buyers and rewarding long-time and successful eBay sellers and at giving bigger discounts to higher rated sellers. But they also take part of their profit from seller shipping costs. Take a look at  the changes  for yourselves and let me know what you think.

1.Insertion fees are now free!

Making these free is a step toward simplicity that I  welcome. Just keep in mind that extras like bold and italics will still cost a bit extra.

2. The final value fee is now 9% and caps off at 100 dollars. This will benefit some sellers more than others, but is aimed at encouraging all eBay sellers to offer free shipping.

3. The buy it now feature is free for up to 50 listings. Now sellers can try it our for free and determine the value of this option. Something tells me it must be valuable if eBay will give it away for free to encourage sellers to try it. They must feel confident sellers will be hooked after 50 listings.

4. Top Rated Sellers get a 20% discount off of final value fees (on item price portion only) It makes sense to reward people who work hard to keep their customers happy.

5. Paypal can hold the profits of new and low rated sellers for longer.  Auction Bytes explained that,

“Those affected by the new Payment Holds policy will see buyer payments as pending in their PayPal account. Funds will be available 3 days after eBay receives confirmation of delivery when the seller uploads tracking information, or 7 days after the seller’s latest estimated delivery date if they don’t upload tracking but mark the item as shipped. If no shipping information is provided to eBay, funds will be available 21 days after the buyer pays.”
While it makes sense that more caution should be used with new and poorly rated sellers, I see this as being a little frustrating to new sellers since their profits depends partially on the customers speed of payment and how fast something ships. It will discourage criminals, but also people wanting to begin selling that have little or no feedback. I have  to wonder if it will encourage new sellers to start business on other selling sites. Only time will tell.

To see mathematically how the changes will affect your profits please visit Auction Byte’s breakdown article.

For more about selling online please find us on Twitter @gogodropship and visit our company blog. Thanks!

Storing Merchandise

What is drop shipping? Can it be leveraged into a successful business?

As a senior at BYU-Idaho, I first heard about drop shipping when a successful online business owner came to speak to us. She got her start selling homemade baby blankets on eBay and then over time expanded her inventory by adding furniture. When she branched out into furniture she was nervous that she didn’t have the space to store the cribs and chairs.  With a little negotiation her supplier agreed to be a drop shipper solely for her. When someone drop ships it means that the supplier or manufacturer ships the product directly to the customer.

This drop ship deal was due to the good relationship she had built with her supplier. (since the supplier didn’t drop ship with everyone) The  drop shipper saw that she worked hard and thus was willing to put in a little extra work by agreeing to drop ship. Really it was a good relationship that made the deal possible.

Most businesses will tell you that a good business is centered around a good product. But, because suppliers largely control if you sell a product or not, it is so important to develop a good relationships with them. The truth is that for most manufacturers, drop shipping only a few items can be a hassle. Most manufacturers would prefer to sell to organizations that buy a product in bulk. But many will know drop ship thanks to relationship built with a good directory or seller.

Suppliers also control when a product gets to your customers. This alone is reason enough to stay on good terms.  After all,  quick shipping generally translates into customer feedback. And any eBay seller will tell you the value of good feedback on eBay.

But besides saving you the hassle of shipping a product to a customer, it can also help you put profits back into your pocket more quickly. You see once the customer pays, you have your entire profit right up front. You don’t have to worry about the fees associated with shipping and handling.

While it’s true you can work with drop shippers without a directory, it can be extremely difficult to connect yourself to a legitimate drop ship distributor on your own. There are a lot of scams  out there but drop ship directories take the guess work out of finding trusted suppliers. They form relationships with these suppliers so that you’ll be connected to a friendly, dependable drop ship supplier. The supplier of the woman I told you about was a trusted supplier that helped the woman expand her business from a small eBay account, to an online store, and then into a successful brick and mortar store. While  this woman knows her hard work got her the trust of the supplier, she acknowledges that her dream business could never have boomed without an honest supplier that produces quality products and ships quickly to her customers.

Do you want more tips on how to jump start your online business?

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First and foremost, when you think of eBay, the savvy customers out there think feedback. We had talked about feedback before, but I wanted to go into a bit more detail on Feedback, and its significance to us as new eBay users.

eBay, as we know, is a behemoth on the internet these days. There are literally tens of thousands of transactions going on hourly, and eBay quickly came to realize that it was fast growing infeasible to try and track all this information on a case by case basis, if not outright impossible. In this position, you typically have one of two options available to you: let chaos reign, or try to keep some semblance of order. eBay opted for the latter.

The concept of Feedback is simple: you have a “pass/fail” metric by which you rank a transaction, and the buyer and the seller involved both get to have their say. By keeping things strictly as Positive or Negative, there is no guessing. There is the eBay DSR rankings that allow us to get more in-depth, but as far as the transaction itself goes, you either did your job, or you didn’t.

It was a great way to keep the buyers and sellers on eBay in line; you were at the mercy of whomever it was you were directly working with as far as Feedback was concerned. Your reputation itself was at stake with each and every transaction, so it was very important to uphold your end of the bargain, and ship promptly and as outlined, or pay promptly as promised. It helped impose some order onto an otherwise unwieldy environment, and it took off well.

Reputation is well and good, but what practical effect does that have on us as eBay sellers? Find out in our next article!

When sourcing from Chinese suppliers, there are a few things that we need to be aware of. First and foremost, the copyright laws that we’re accustomed to in the United States do not apply to Chinese suppliers. They can market an in-house product as a name brand if they so desire, and there is nothing by their laws that has them at fault. This is what is called the “Grey Market”. It is not necessarily illegal in China, for instance, to market a non-name brand as a name brand, or to replicate an item exactly. However, we are still bound by the laws of our land, so if we’re unknowingly marketing the Chinese iPad as an iPod, it is we who will be in trouble for it. We will be flooded with returns almost immediately from our dropship website, but if we’re trying to source these counterfeit items on eBay, then we’re going to quickly find our accounts banned for it.

A second issue we run into is that the product that we’re purchasing may be coming from black market sources. Black market sales are strictly speaking illegal, and as such it will exist as an ephemeral thing. Since we are not receiving from our supplier a consistent source, when their stock is gone, it is gone, and even if we’ve placed the order, we have no assurance we’ll ever receive the order, or see the money again once its been sent.

Now, taking a huge leap of faith, if we find that the items we are receiving from our Chinese-based supplier are the real deal, we now have the logistic problem of getting it halfway across the world in a reasonable amount of time… and while still being able to maintain a profit. In recent years, tracking technology has made leaps and bounds when it comes to international orders, and we’re going to need to take full advantage of that. We will want to know where our item is exactly… because its going to be spending a fair span of time getting from the supplier to the customer. The shipping cost to allow for a more reasonable amount of time will typically be much higher than a buyer is willing to pay, and the increased cost of having to go overseas is going to eat into our profit.

The biggest thing to remember when sourcing from Chinese suppliers is that these problems lie directly on our shoulders; any instances that come up are our responsibility. eBay does not accept “I thought it was legitimate” as an acceptable excuse if we try and source counterfeit products from a Chinese supplier, and our buyers on our website also tend to be less than forgiving when their $300 iPad arrives at their door. It is our responsibility to ensure that our supplier is legitimate, but how will we do this?

It is important to realize that even as we work to begin getting things set up with our dropship website and the business opportunities that presents, we can work with most of our suppliers on eBay. This is going to help eliminate ‘down time’ as we wait for things to get approved, and it also a great way to get a good insight into pricing and our market, as well as into the inner workings of our supplier. Not only that, by having a supplier to work with, we’re eliminating the dreaded post office line and shipping conundrum that scares so many people away initially. We get money rolling in, we get some hands-on experience with our supplier, and all from the convenience of our own home. A classic multiple birds, one-stone scenario if ever there was one.

But of course, as with all things it is not so simple a matter as to take no forethought. First and foremost, we have an exercise is proper dealer-supplier communication. We do not want to get our approval and account authorization completed only to jump right onto eBay and start selling; while many suppliers are glad to work with you on eBay, some have had bad experiences to sour them to the idea, and we want to find out quickly which camp our supplier lands in.

It would be very bad for us to start stepping on toes on our very first day with the supplier! We’ll need only communicate with them, be it with our account representative over the phone, or however our supplier likes us to reach them, and find out for certain. If we get the green light, excellent! If we’re told to put on the brakes, best we’re doing it now, rather than down the road and get in trouble.

As we do not carry the products we’re selling on eBay, we have to exercise an extra level of caution when utilizing a supplier for our eBay endeavors. We want to communicate with our supplier as much as possible, so we know where inventory levels stand, and if there are going to be any foreseeable delays. For instance, if the supplier says We’ll be down for two days for maintenance, we want to be aware of that, and plan our auction accordingly. Every bit of information we can get in regards to inventory, shipping times, and all of that fun stuff is going to be crucial in our success: remember, it is we who are responsible for the listing, good or bad, not the supplier.

The worst thing we can do is forget that simple fact, and start holding the supplier at fault for any snags that we run into with the listing on eBay; if we didn’t watch the inventory level, if we didn’t make sure that the lines of communication are open, it is we who are at fault, and it is we who will have to eat the negative feedback. However, with a little bit of planning, and a handy email plugged into our system or telephone number in our phone, we can avoid many of these problems, and reap the full rewards of eBay and dropshipping.

In order to prevent such failure, always contact the dropship companies you intend to work with before assuming that they dropship the particular product you want to sell. When you contact wholesale dropship companies, make sure that you also ask about any fees associated with drop shipping with that supplier before you get in too deep.

Some of the fees associated with dropship companies are price mark-up, same price, and monthly fee. A price mark-up occurs when the wholesaler marks up the product after getting it from the manufacturer. A second way to charge a fee is by selling the product for the price they were able to get it from the wholesaler but then charging a fee for each time a product is drop shipped. A third way is to be charged a monthly fee and then you can sell the product as often as you wish that month at the price of the wholesaler, without any extra fee associated with it. The dropship companies you’re working with may use all or none of these fees. If they use all of them, the chances of making a profit off the products are very low.

I cannot stress enough, the importance of contacting the dropship companies in advance. You would never want to post something on eBay, for example, and make a sale only to find out that the dropship companies you are dealing with plan to charge you extra fees. For more information please visit GoGo Dropship.

Let’s say you want to start an online business selling flat screen TV’s. You found a company that does wholesale electronics, now what do you do? It’s very important to establish effective communication patterns with your wholesale electronics supplier. You can do this by going to the contact page or the wholesale electronics page, if one exists. Some sites require the reseller to fill out an online form located on the contact page. It is suggested that you make contact with the wholesale electronics supplier before taking action. Ask them about their program. If you want to drop ship, you better ask them about that as well; do they allow drop shipping on eBay? It may help to write down some questions before contacting the supplier so you know exactly what you need to ask them.

Also, make sure that you understand what the wholesale electronics supplier is saying. It may be fun for my little nieces to communicate in secret languages that neither of them really understand but that is simply not the kind of connection that a person wants to have with their supplier. To be honest, a little bit of communication will go a long way in business so long as both sides are willing to give it a try.

I’m going to guess that a lot of people who are reading this post right now are in the “box”. Meaning you’ve been drop shipping for quite some time now but you’ve never used a drop ship directory to sell on eBay. Maybe you’re afraid and have reservations about drop shipping on eBay. I hope to relieve you of some of those reservations and convince you that being in the box is really no fun at all.

Step one: Realize you are in the box

Many eBay sellers are content to sell junk they find around their house, using the mantra one mans junk is another mans treasure. The question I would like to ask them is why on Earth are you content to sell used merchandise when you could be making an even bigger profit using a drop ship directory to find low cost, high profit merchandise to sell?

Step two: Get out of the box

You may argue that it’s too hard to find a product with a high enough return to make using a drop ship directory worth it. The truth is that you don’t have to do the work if you don’t want to. GoGo Dropship now has what is called the eBay Weekly Sellers Report. This report, available with the premium package, outlines products that are currently making a substantial profit on eBay. This report is designed to make the process much easier on our customers and help them get out of the box.

Step three: Stay out of the box

Now that you’re out of the box and realize that a plethora of products are available to you in a drop ship directory, start selling on eBay. Many find drop shipping on eBay a great way to make money to pay the start up costs of their business whether it be online or brick and mortar. Give it a shot; I think you may be pleasantly surprised with the result.

Give it a shot; I think you may be pleasantly surprised with the result. You can’t loose any money drop shipping on eBay. Step outside the box, find a product niche, and start selling.