(Editor’s Note: This interview was first published on October 11, 2003)
The Internet has opened up many wonderful opportunities for people to buy and sell merchandise and services online. An important Internet sales channel that any home-based entrepreneur should not miss is the online auction.
From eBay to uBid, auctions can offer you a means to promote your products to millions of buyers, increase your sales and cheaply attract traffic to your site. You could even start a lucrative business trading at auctions!
To help you get started, we interviewed Larry Jordan, former Vice President for Marketing of Vendio.com, the leading provider of software solutions that helps auction merchants efficiently market, sell and distribute their products. Vendio.com’s services are used by tens of thousands of sellers to sell $40 million worth of merchandise. Below are Larry’s insights on the importance of auctions as a sales channel for small and home-based businesses.
What benefits can auctions bring to a small and home-based entrepreneur?
For a seller just starting out, auctions give instant access to millions of buyers. Without the extensive reach provided by the Internet and auction sites like eBay, small sellers would be limited to their immediate community, local events and what ever personal network they create over time. Online auctions level the playing field for small sellers by providing equal footing to the bigger, better branded retailers. Some sellers, who simply started out selling a few items per week, have grown their business into a full time job – making more than their “day job” over time.
For those with existing e-commerce sites, how can auctions help them?
Online auctions are a terrific means of customer acquisition. By simply placing some of their items for sale on auction, the seller immediately creates a steady stream of new customers. If these new relationships are properly managed, the seller can easily redirect them to their existing e-commerce site. This practice, while frowned upon by eBay, is a cost-effective way of acquiring customers. Many Vendio sellers have opened a Vendio Store to reap the benefits of direct selling to customers they met through an auction.
Can you compare the different online auctions (Ebay, Ubid, etc)?
Clearly, eBay is the leading site in terms of traffic, volume of transactions and most importantly, selection. You can almost guarantee that you can find just about anything for sale on eBay. No matter how eclectic or rare the item, it will probably be there. uBid is more of a specialty site focusing on discontinued computer equipment and consumer electronics.
How can one start selling at auctions? Is it easy to start?
Yes, it is simple to get up and running as the mechanics of selling via online auctions are straightforward. First, you’ll need something to sell. Once you have chosen the item you want to sell a digital camera comes in handy so you can post a picture of your item that’s up for sale. Shipping supplies are important so you can send the item once it has been purchased. Lastly, you’ll need a credit card to pay for the posting fee. Spend some time looking at how others sell similar items and ask yourself – how can I stand out? Consider using a service like Vendio to help appear professional through the use of templates and automated communications.
What is the difference between a part-time amateur seller and a successful business owner?
In my experience, the most successful sellers are the most dedicated to their business. It is more than just a hobby to them, and their customers are the center of their universe. Treat your customers like gold, and they’ll continue to do business with you. Like most businesses, you tend to get out what you put in.
Not all products are suitable for auctions. What kinds of products are “hot” right now at auctions?
This is the time of year where consumer electronics and related merchandise sell like hotcakes. Everyone is looking for deals on computers, stereo equipment, video game consoles, DVDs and televisions. Buyers only tend to buy these items from established sellers with good reputations, so if you are considering selling any of these items, you’d better get cracking!
How quickly can a seller expect major success?
Again, it really depends on how dedicated you are to your online sales business. The most successful sellers use auction management tools to help automate the sales process and stay in constant contact with their buyers. Once you get a good reputation and a high feedback rating, success is limitless. Although, keep in mind that you get out what you put in. It does require some effort on the sellers part, especially at the beginning, but it gets easier as the seller gets more experienced.
What factors contribute to the success of a seller’s auctions?
It’s the simple things, really. Spending the time to copy write a good description of the item. Accepting multiple types of payments. Making the shipping terms really clear. Using well-lit photographs to show buyers exactly what they are getting. And managing it all with a sales management tool, like Vendio!
Once a seller gets going, how can they grow their auction business?
Some sellers grow their business by beginning to offer new lines of products, in addition to the products they began with originally. Vendio sellers, for example, can offer buyers related items at the point of checkout; i.e.: toner and paper with a printer purchase.
How can one avoid fraud and protect their interests in auctions? What tools are available to the seller?
The biggest issue sellers have is the deadbeat bidder. And, unfortunately, there really is not much a seller can do. There is a tool available on eBay that enable sellers to block specific buyers from bidding on your listings, but unless you are diligent in entering in their user ID, expect deadbeat bidders to occasionally win an auction. To mitigate this, some sellers simply communicate with the runner up and offer them the item at the amount of their last bid. This usually works in getting the item out the door.
Selling at auctions can be a time consuming process, especially if one is selling hundreds of items. What tools are available to help a seller manage their auctions?
Glad you asked! Vendio is a valuable service that can help you save time and money as an online seller. We have a number of powerful services and features that can benefit any size of online business. Some of these include:
- Inventory Management and Listing Creation – Simplifies the merchandising process by enabling sellers to efficiently create professional listings while leveraging an inventory management system to keep track of all their merchandise.
- Online Stores – Allows sellers to easily create a branded online store displaying fixed price and auction listings in a single location. Sellers can also up sell additional items at checkout and combine orders in their shopping cart.
- Merchandising and Listing – Helps sellers promote their merchandise to millions of buyers through their online store and the Internet’s leading marketplaces including eBay, Yahoo! Auctions and Amazon.
- Direct Marketing and Promotion – Enables sellers to cost-effectively promote their products in their stores and at auction through direct email marketing and promotions.
- Automated Check out, Tracking, and Order Fulfillment – Helps sellers reduce order fulfillment time by over 75 percent by simplifying and automating the tasks associated with invoicing, receipt of payment, printing of packing and address labels, sending of shipping notifications, order tracking, and record keeping.
What advice/tips can you give a prospective auction seller?
The best advice I can give is to remember to have fun and play nice. Online auctions are very dynamic and filled with buyers looking for bargains. Plus the bidding process adds a layer of excitement because buyers cannot be assured they will get the item. So when selling, be sure to feed the excitement – display your items as professionally as you can with lots of good photos and riveting copy. When you actually find a buyer, treat the person with the respect and professionalism you expect from the places you like to shop. And lastly, take an honest look at using an online sales management tool like Vendio – we can help you get to profitability faster than simply going it alone.
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Category: Online Auctions