eBay for Small Business (Part II)

By Gerry Blackwell | Posted May 28, 2003
When fraud artists contacted eBay Power Seller Janis Callahan (Lynnsemporium) of Birmingham, Ala. last year to try and sell her on a program for sure-fire online auction success, she knew it was a scam right away.

"The course they were offering was at the bargain-basement price of $20,000," Callaghan says, chuckling. "That had to be wrong because you can learn how to use eBay for nothing."

Callahan and hundreds of other self-taught eBay small business successes are proof positive of that. Callahan, who only started selling her dolls and collectibles in earnest last November, is already bringing in the equivalent of $35,000 a year on about 60 auctions a month.

"The bottom line is that if I wanted to do this full-time, it could easily go up to six figures," she says.

If you're a small business or thinking of starting a small business on eBay and you'd rather not learn the hard way, eBay "university" is an alternative to learning by doing. eBay offers one-day fast-track seminars — Beginners and Advanced — for somewhat less than $20,000. All of $25.

"It's a great way to get better at selling, a great way to learn and also a great way to meet other eBay sellers," says eBay dean of education Jim Griffith. "It really is fun."

It may not take rocket science or even a real university education to succeed on eBay, but in talking to Griffith and eBay successes like Callahan and the start-up businesses we profiled in the first in this ongoing series on eBay, it's clear there are techniques and best practices that sellers ignore at their peril.

Griffith runs down a list of basic tips and tricks covered in detail in the seminars. They may sound elementary in the extreme to experienced eBay sellers, but they can make the difference between success and failure, he says.

At the top of the list is the product picture — or, better, pictures. "Everything," Griffith says, "hinges on the pictures. They have to be clear, focused, properly exposed, properly edited — as professional as possible. This is probably the single most important [part of the listing.]"

The title, though, is what the buyer sees first, and the title can only be 45 characters. It's also what eBay searches on, so it must include all the possible keywords — the type of item, brand name, exact model name or number.

The trick, says Griffith, is not to waste characters on newspaper classified ad-style flourishes. "Nobody searches on the word 'fantastic,'" he notes.

The description, the third part of the listing, is also critical. "It's amazing how many sellers don't get it quite right," Griffith says. The most common mistake is to not be comprehensive or detailed enough.

The description needs to include everything, including any flaws in the item. And it must also include selling policies — who pays shipping, and if it's the buyer, an estimate of what shipping costs will be. "It all needs to be spelled out absolutely clearly," Griffith says.

Callahan learned the hard way when she tried to sell a 1920s set of the Chinese board game Mahjong. She neglected to describe the item in enough detail to make it clear the box it came in didn't include the original lid. Knowledgeable buyers e-mailed almost immediately to ask why she hadn't shown the lid or mentioned it in the description.

"The way we say it on eBay is that you have to describe the item as if you had no picture — and take the picture as if you don't have a description," Callahan says. "People will pass an item by if the description is only half written."

The last part of the listing is the terms of service — mainly how the buyer pays. Here Griffith gives an unashamed plug to eBay-owned PayPal, the online payment system. "It's easy and quick, and more and more buyers are searching for listings that use PayPal," he says. "Most serious sellers are using it now."

While the listing is the key to initial success and also where much of the effort goes, it's not the only thing you need to pay attention to, Griffith says. For reasons both obvious and not so obvious, customer service is absolutely vital on eBay.

At the simplest level, he says, sellers must be as responsive as possible to buyers. The best sellers e-mail responses to buyer queries within minutes of receiving them, he notes. "A delay in e-mail response is kind of like letting a customer in a bricks-and-mortar store get out the door because you were busy on the phone."

For Callahan, customer service is at the heart of her business philosophy and she believes it's the main reason for her quick success on eBay.

"I really don't look at eBay as a money business, I look at it as a personal business, a relationship business," she says. "If I can develop a relationship with the buyer, if I can build up a rapport, then I'll build a base of repeat customers who will come to me first before they even look at other auctions. That's what works for me."

The customer may not in truth always be right, Callahan says, but you basically have to operate as if he is.

A reason for the heavy emphasis on customer service that may not be so clear to non-eBay users is the whole business of feedback ratings. On every transaction, the buyer can rate the seller and the seller the buyer on how honestly, straightforwardly and promptly they deal.

Callahan, like other successful eBay sellers has a 100-percent positive feedback rating. "And that's pure gold," she says. "You should value your feedback more than money on eBay because without it you're going nowhere."

Many buyers, Callahan says, won't buy from new sellers with no feedback or from sellers with less than stellar feedback. Some sellers — she's one — even dislike selling to buyers with low ratings. This is one reason she recommends that aspiring sellers start on the other side of the counter.

"If you want to sell on eBay," she says, "first go and buy. Buy something inexpensive, even buy something you don't need — just to get that feedback."

To find out where eBay seminars are running next, check eBay's calendar of events.

Most of the other attendees will be folks like you. "The lion's share of those who show up are business oriented," Griffith says. "They either already own a small business or they're interested in becoming self-employed."

For a real baptism by fire, eBay Live 2003, the second annual eBay show and conference, runs from June 26 to 28 in Anaheim, Calif. The cost is $60. The event will include over 100 workshops covering every aspect of starting and running an eBay business. It will also include a trade show featuring vendors of eBay-related products and services.

The first eBay Live event last year attracted 5,000 people. This year eBay is expecting 10,000, Griffith says.

The bottom line? You do need to learn how to use eBay, but you do not need to spend $20,000 or anything like it.

Callahan was so incensed at the scam artists who approached her with that offer that she played along to try and catch them. She eventually extracted an e-mail address and phone number, which she passed on to eBay and the FBI. The operation was promptly shut down.

They weren't very bright fraudsters, however. A few months later, they were back under a new name, apparently having forgotten they'd already hit on Callahan. She helped shut them down again. For good this time, she hopes.

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