Henryís Random Thoughts
The ideal items to sell have a high value relative to their weight. That is because you are going to be shipping the items, and people will only pay what an item is worth to them. If something is only worth ten dollars and it will cost eight dollars to ship, you will only net two bucks, and that is before the fees ebay charges. Such an item isnít worth selling online. It is best sold by a store like Wal-Mart, which can cut the cost of shipping by bringing it to its stores on semis and making the customer take it home from there.
Ideal items are collectibles and small crafts. A baseball card in a plastic holder and a bubble mailer can weigh only two ounces or maybe three. It can cost a dollar to mail. Books and other media can also be surprisingly shippable due to favorable postal rates for such items.
However, there are a lot of shippable items nobody wants, so you need to be sure you do your homework and trade in items that are in demand.
What Profit Margin is Right?
Obviously, youíd love to buy things for a quarter and sell them for a thousand bucks. You would have to be pretty lucky for something like that to happen. More than likely, especially at the beginning, your profits will be thin to nonexistent. Just remember that ebay and Paypal charge fees to the seller. These fees take about 15% of the sale price for moderately priced items. That means if you buy something for $17 and sell it for $20 plus shipping, your profit is about zero. It is important to think about this, especially if you plan on trying to make a living at it. If you need to make $500 per week and think you can move 100 $20 items per week, you should have no more than $12 total into the item. Also, if you anticipate lost or broken items, you have to price accordingly because any refunds will come straight out of your pocket.
The main focus should be on making your auctions as customer-friendly as possible without giving the items away for too little. This means accepting as many payment methods as possible, particularly Paypal. Many people on ebay refuse to accept Paypal, ebayís in-house electronic payment system. Paypal charges a fee equal to 2.9% of the value of the transaction plus thirty cents. This cuts into profit margins. Also, Paypal payments funded with a credit card are vulnerable to chargebacks, which are refunds demanded through the buyerís credit card company. These chargebacks can result from outright buyer fraud or just from crabby buyers who are too impatient to work out disagreements. Either way, the money leaves your account and unless you can navigate the dispute process, itís gone for good. In the case of outright fraud, recovery is hopeless. But the benefits of accepting Paypal usually outweigh the drawbacks. Most importantly, other sellers will usually accept it, so unless your product is truly unique, Paypal fans will pass your listing by. Also, the chargeback risks are modest for small-time sellers. Most crooks wonít bother trying to steal a $20 item via chargeback fraud. The cranky customers will be few and far between (provided you are an honest seller), so those rare issues will be a manageable cost of business.
Paypal speeds up shipping. I was on ebay before Paypal, and the two or three weeks you waited for goods went with the territory. But now, I get my Paypal-paid goods in a week, and that same waiting period that was fine in 1999 feels like an eternity now.
If you think you will sell some valuable items from time to time, you might want to stipulate that you refuse Paypal for orders over a certain amount, such as an amount running into the hundreds of dollars. This might be the point where a chargeback will cause more than a little pain.
Money orders and cashierís checks are no-brainer payment methods to accept, since payment is guaranteed. Just remember that anything made out of paper can be counterfeited, so if you sell something expensive, deposit it right away and wait a couple days for it to clear.
Personal checks are a time-honored payment method that I have never had any trouble with. Normally, I ship even before I deposit low-dollar checks. I donít think many people would bounce a $25 check, but the risk is there. If you do want to wait for checks to clear, you only need to wait a few days. People who wait 10 to 14 days are overdoing it and causing the buyer to wait an too long for their goods. Even if you told them in your terms that they would have to wait this long, itís still an unpleasant experience.
No other methods of payment are worth bothering with besides the ones above, unless your items sell for amounts into the thousands of dollars. If you do have such listings, consider offering an escrow service. Just be clear as to who has to pay for such a thing.
People will send you cash in the mail on occasion, even if it isnít a listed payment term. This happens more frequently for items that are under ten bucks including shipping. I always loved getting cash payments, since they are the least troublesome to deal with. You just stick it in your pocket and spend it. If someone asks about sending cash in the mail, tell them you donít recommend it and it is at their risk. But donít refuse to accept it, unless the amount is large and it smells like the beginning of a scam.
Shipping options depend largely on the type of goods being sold. As a general rule, your main shipping option should get the product there in good shape and reasonable time, as cheaply as possible in a way that is convenient to you. For the most part, this is through the postal service. There are so many post offices, mailboxes and other ways to drop off mail. Also, they give you many affordable options. However, UPS and FedEx have established storefronts that make shipping convenient. You might want to consider those services, especially if your goods tend to be heavy and are not books or other media.
Ebay shoppers tend to be bargain hunters, and they consider the total cost of what they are buying, therefore you want your shipping costs to be as low as possible. This will probably be US Postal Service book rate for books, media mail rate for other media, First Class for items 13 ounces and under. For items that do not fit into those categories, offer USPS parcel post, UPS Ground or FedEx Ground. Keep it simple and uniform. This makes it easier on you. All that shipping does is get the item to the buyer. They are all of about the same quality, so stick to one way. If a customer requests special shipping, it is up to you to offer it, but be clear that the buyer will bear all additional costs.
Some bidders will request local pickup. If your lot is enormous and the shipping is very expensive, allowing this might increase interest. Sometimes, people will request it even if the shipping cost is small. Some people are just tightwads. My attitude has always been that if they will come to me and work around my schedule, I will allow it. Itís one less thing to box up, after all. Obviously, if you are afraid of creeps, you need to take the same precautions you normally would with meeting strangers. Also, donít inconvenience yourself. You are saving them money, after all.
International shipping is a complex subject. Beginners might not want to mess with it at first. You can set up your listings to forbid foreign bidders. But as a general rule, you want to offer your item to as big a market as possible. The world outside the USA is getting richer, and the weaker dollar provides foreigners with even more purchasing power. English-speaking countries share tastes similar to Americans, and to a lesser extent, Continental Europe also shares our culture. The Japanese are obsessed with certain parts of American culture. I have shipped many baseball bobblehead dolls to Japan, and have had no problems with the sales.
My advice is that if your goods are relatively cheap and/or utilitarian, skip the international part. It makes no economic sense to sell a $100 used Dell computer to Germany. If you sell something that you think foreigners might want, try to ease into it. Watch out for huge orders early on, as a mistake or a fraud might be costly. Also, learn all the rules about shipping and get actual quotes before giving someone a rate. If you guess, you will probably guess too low. There are some good options out there. If your item can fit into a Global Priority Mail flat rate envelope, it will help a lot. Paperwork will be minimal, cost is reasonable and delivery is fairly fast. If it is bulkier, options can be expensive. The old Airmail Letter Post or Surface Letter Post are cheap options, but are very slow and have no tracking. See the postal website for options.
Written by Henry Grimmelsman starting in 2007. Please do not use without citation and linking to my website.