Now eBay Thinks They're Overstock.com

The eBay Seller's News, April, 2009, Volume 9, No. 6

eBay Tips, Tools, News and Resources for the Professional eBay Seller
by: Skip McGrath

In This Issue:

Musings

Is It Time for eBay CEO John Donahoe to Go?
Now eBay Thinks They're Overstock.com
Using Twitter to Increase Your Profits
Niche of The Month - Selling Used Golf Balls on eBay
Protecting Your Online Business With a Back up Payment System
New eBay Wholesale Sources for April 2009

"The easy thing and the right thing are seldom the same thing"
~Unknown

eBay gives 60 day Notice To Major Changes to the Platform - Changes to take place in June will include new item pages, new mandatory return policy enforcement and new dispute system. The announcement from Stephanie Tilenius, Senior VP & GM for eBay North America had been rumored for a while. As part of the announcement eBay stated a new policy that from here on they will give 60-day notice on all new changes before rolling them out. This was welcome by the selling community and third party service providers who must integrate with the eBay system. I haven’t had time to analyze the announcement yet and its impact on sellers, but here is the text of the announcement from eBay. I will be studying this and commenting on various parts of it over the next couple of weeks. Click here to read the announcement.

If you went to eBay Motors today and found something totally new that's because today is the first day for the new eBay Motors platform. On April 13th, all users who were using the original eBay Motors have been moved to the new eBay Motors, and will no longer have the option to search for Motors items using the original eBay Motors.

If you haven't looked at eBay Motors in a while you might be confused. If you have questions about the new eBay Motors, please visit the eBay Motors FAQ.

In the second article this month (below) we discuss the new direction for eBay to become a platform where buyers can access liquidation, surplus and overstock merchandise. If you are interested in this market, you should invest in a copy of a great training manual by Chad Maslak. Chad has been in this business for years and has written the definitive manual, The Mega Profits Guide to Wholesale Surplus and Liquidation Merchandise. Chad's sales letter is pretty aggressive but don't let that put you off. His guide is really excellent. I have personally used it to source profitable products. Most importantly -there are a lot of pitfalls and ways to get hurt buying these products and Chad shows you how to protect yourself so you always get good merchandise and pay the right price so you make a profit.

Best of all, I contacted Chad and asked if he would offer my readers a special deal and he agreed to a $20 Discount on The Mega Profits Guide to Wholesale Surplus and Liquidation Merchandise for the rest of this month. I bought Chad's original book 2 years ago at full price and thought it was a great value. The new updated version is an even better value now at this price.

Amazon announced this week that they will restrict casual sellers from listing collectible books. In a surprise announcement, Amazon said they will restrict sellers who list collectible books to sellers who meet certain requirements such as low defect rate, time on the platform and the size of your business. This may sound like a blow to the small used book seller who comes across the occasional collectible book -but in truth, I usually do better with collectible books on eBay than I do on Amazon. They seem to sell faster and at as high, if not a higher price.

An additional piece of news from Amazon is that they are banning associates (affiliates) from using keyword PPC advertising to drive traffic to their Amazon affiliate listings. eBay did the same thing last year. Of course you can still use PPC to drive traffic to your website or blog and then drive the traffic from there. In fact that is what most top affiliates do. So this is really no big deal.

A couple of months ago I told you about Mike Enos' new program, The Instant Niche Maker. This is a great little program to help you make some money with fairly little time and effort. Unlike a lot of "get-rich-quick" programs, this one is actually designed not to make you an overnight internet millionaire -but just a nice way to make some extra money. Since the launch, Mike has done a great job of creating updates and add-ons. I always hate people who sell you some kind of program and then forget you once they have your money. But Mike is doing a great job of follow up support to his buyers. Best of all he offers a 5-day trial for only $4.95. The system is so simple, you can get your very own niche website up and running in about 30 minutes.

This month's featured articles:

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1. Is It Time for eBay CEO John Donahoe to Go?

I don't know - but more and more people are asking that question. I met John Donahoe at eBay Live in Chicago. It was a pretty brief meeting, but I liked him instantly. I also attended his talk where he was introduced as the new CEO.

When John introduced himself he told us about his background and experience and talked about his Mid-Western values. He seemed to be a pretty smart and likable guy and to give him some credit, he was coming into eBay at a very tough time. Also he hasn't really been there that long. Less than one year is not really long enough for a CEO to have a major impact. But there are two things missing that make me wonder about his ability to get eBay turned around: Vision and Passion.

Vision - One of the most basic principles a leader needs is a clear vision of where the company is going and what it will look like in one, two, five or ten years. I don't get that from Donahoe or any of his key executives such as Lorrie Norrington (President, eBay Global Marketplace Operations) or Dinesh Lathi (VP, Seller Experience). Their communications with members seem to be technocratic and wonky. Every time they make a major announcement they seem to introduce more uncertainty into the marketplace. Remember eBay sells nothing -it is us sellers who do that. What sellers need is a clear direction of where we are going and how we can use eBay to grow our business.

Every great organization has a clear vision of where they are going and how they will get there. In the corporate world that vision is shared with employees, vendors, customers, investors and most of all, their sales force. Since we are eBay's sales force they need to share it with us. But first -they need a vision to share. The vision should be clear, ambitious and achievable.

Passion - The other attribute all great leaders have is passion. They are passionate about their mission and their vision and they do a good job of sharing that passion with employees, contractors, vendors, the sales force and their customers.

When Meg Whitman was heading eBay she certainly came in for her fair share of criticism -but Meg had passion and she communicated her passion enthusiastically every time she spoke to the community.

I don't expect John Donahoe to have the passion and vision of Steve Jobs (Apple) or Jack Welch (former head of GE before the current clown) or Lou Gerstner (who rebuilt IBM)-but right now he isn't even close. Worse, it looks like he's not even trying. As someone who depends on eBay for most of my earnings, that troubles me greatly.

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2. Now eBay Thinks They're Overstock.com

It wasn't that long ago I was accusing eBay of trying to be Amazon.com. I wasn't the only one - that was the consensus of a lot of eBay sellers --and many buyers too. Then a few weeks ago eBay threw us a curve when they made an announcement at their analyst's day that they would start to focus their efforts on attracting large liquidation sellers.

This is the market that has been targeted by Overstock.com for several years so it looks like eBay wants to go head-to-head with them. The problem is that eBay has never demonstrated any knowledge of merchandising. eBay may have the money, the traffic and the depth of technology resources far beyond what Overstock.com has, but they lack one important thing. The folks at Overstock are real entrepreneurs with skin in the game and this is something that has been missing at eBay for the past few years.

The people at Overstock know what sells and what doesn't and they carefully select their merchandise and the goods they feature. I don't think anyone at eBay has the consumer merchandising background to pull this off. They could of course hire someone, but then they have to give that person their head which is something eBay can't seem to do culturally. eBay's approach to liquidation goods seems to be: Find the large liquidation sellers, offer them cheap (or no) listing fees and just get them to stick everything they have up on the site. Great! Now there will be millions more listings - a high percentage of which will be unsalable junk making it harder for buyers to find what they are looking for and they will be dealing with giant sellers who just want to move stuff out regardless of the price.

Don't get me wrong -there is money to be made selling surplus, overstock and liquidation goods - I just don't think it will be done by the large mega sellers eBay wants to attract. eBay already has a cadre of experienced sellers and entrepreneurs -it's us, or as a slogan from past eBay commercials stated, it's all of us. We know how to merchandise and sell. Some of us are new to it and some of us are better than others -but collectively the thousands of existing sellers have the ability to increase listings and sales (and eBay profits) if eBay would just reach out to us.

Remember, if the liquidation market appeals to you, you can get a discount on the best training manual from Chad Maslak for the rest of the month of April by CLICKING HERE.

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3. Using Twitter to Increase Your Profits

My good friend Steve Lindhorst has done it again. First he wrote Selling on The River -still the best book about learning to sell on Amazon. Now he has come out with a great little low-cost report on using Twitter to increase your profits: The Twitter Trick, List Building Using The Power of Twitter. Don't let the title throw you -the book is about much more than building lists. You can use these methods to send traffic to your eBay listings (Steve has already made some sales this way), get traffic to you blog or your website or building a mailing list.

There are several cool things about The Twitter Trick. First of all it is low-tech and easy to do. Really anyone can do this (I just got started and am rolling it out in my blog this weekend). Next it's very simple and only takes a few minutes to implement. Now for the best part: Unlike so many expensive reports and programs, The Twitter Trick only costs five bucks --$5 and it comes with a money back guarantee.

Steve's instructions are literally step by step that anyone can follow. Don't worry if you don't understand Twitter or social networking (I am a very late adopter too), it's not scary at all. I started last Friday and even tried the trick -and it worked. I started picking up followers instantly. Here is my twitter profile page if you want to follow me: http://twitter.com/Skip_McGrath

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4. Niche of The Month - Selling Used Golf Balls on eBay

Shaun Shienfield's eBay ID is knetgolf. Knetgolf specializes in selling recycled golf balls retrieved from over 2000 golf courses in the South Western United States. His folks collect the balls and resells them on eBay at a large discount vs. what a new ball costs . Shaun's success on eBay illustrates how you can have a positive environmental impact with a product that is great for the planet and your own bottom line. This happens when you identify the right niche and nurture your business with care. In these challenging recessionary times Knetgolf on eBay and www.knetgolf.com have grown more than 20% annually year over year. Today, at least 40% of knetgolf sales come from eBay. That's many millions of golf balls sold on eBay alone!

With over 26 million golfers in the United States, it's no wonder that more than a billion golf balls are lost every year on courses around the country. If you're a regular golfer, the cost of all those lost balls can add up. Using recycled golf balls saves golfers a lot of money every year - making the business of recycling golf balls a very lucrative business model. Shaun says that knetgolf's mint-quality balls can help the average golfer save 50% to 60% on the cost of new balls.

If you want to do this, you do have to contact the golf courses first. Knetgolf has contracts with more than 2000 golf courses around the United States for the rights to retrieve lost golf balls from water hazards and the desert. Shaun says "People need 100% permission from the golf courses as this is private property even on public courses. One cannot arbitrarily dive. This is the recovery aspect of the business and it is a supply driven business where demand is quite strong."

Don't think this business is all locked up. I called the manager of our local course and asked if he had any contracts with someone to retrieve balls and he said no. He thinks there are hundreds if not thousands of golf courses in the country that are approachable.

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5. Protecting Your Online Business with a Back up Payment System

I have been a long time fan and user of PayPal. PayPal is by far the largest and most successful online payment system. Yes it has it faults, but all in all it works very well, costs less than processing credit cards and has evolved into a sophisticated system with some incredible tools. But as good as PayPal is you still do not want to put all your eggs in one basket.

Because PayPal is the largest payment system it also attracts the most fraud. I must say that PayPal's fraud department is excellent -but it is this aggressiveness that can end up hurting your business. PayPal's approach to fraud is to fire a shotgun with both barrels when they detect it. Unfortunately innocent sellers can sometimes get in the way of the blast.

I was recently a victim of the latest fraud. Fortunately it was not on my main account - it was on a small account that I use to raise money for a charity I support. One day we were sitting here and we got three $10 donations within about ten minutes. I hadn't been promoting my charity lately so I thought that was really strange. When Karen when into PayPal to look at the transactions to see where they came from so we could send out a thank you email, she discovered that the names and address of the people who sent the $10 were completely nonsense addresses - just a jumble of letters. But the payments were sent from Jamaica and Algeria.

We realized this was some sort of fraudulent activity, so we refunded the payments and called PayPal to report it. After being transferred several times PayPal didn't know what was going on, so they just froze our account. Fortunately I only had a few hundred dollars in that account - but it has now been over two months and our account is still frozen. I asked PayPal to just close the account and send us our money and they said they would do that. But we are still waiting. The account is still open -but suspended and so far we have not received any money.

This taught me a big lesson. What if that had happened to my two other accounts that we use for eBay and to process credit cards from several websites we own? Our business would be dead in the water.

So the first thing I did was set up an account with Google Checkout which is a competitive payment system to PayPal. I am going to put that on all of our websites. And I am now considering the alternative payment systems that eBay allows such as ProPay. I don't really like ProPay that much but I am going to open a ProPay account so I have it ready in case PayPal shuts me down.

The other step I am taking is to constantly remove money from my PayPal account. Normally I leave a lot of money there because PayPal's money-market fund pays a really great interest rate. But the risk of having several thousand dollars tied up for months is too great. So now I move my money out as fast as it comes in.

You are probably wondering what type of fraud was going on where people send you money. It seems what is happening is that people with stolen credit cards are testing them. They make a small transaction on PayPal. If they see it go through then they know the credit card is good and they start using it right away before the owner finds out.

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6. New eBay Wholesale Sources for April 2009

If you live in or near Chicago, you should visit the Transworld Merchandise Center where you will find over 150 wholesale showrooms featuring closeout and liquidation merchandise and factory re-manufactured and refurbished goods. If you want to just fly in and out, the center is located just one mile from O'Hare Airport.

United Auction is another liquidator of new merchandise (no returns or seconds). They are now featuring liquidated merchandise from Habana. This is not an auction. You look at the inventory and photos online and then call and make an offer.

Discount Wholesalers, Inc. specializes in overstock, customer returns, liquidation merchandise and closeouts (pallets to truckloads). Discount Wholesalers, carries general merchandise, domestics, food, electronics, apparel and tools including major Name Brands. If you see something on their website that interests you, call their sales reps at 610-458-1131 to get details and pricing. (Note - don't buy customer returns - these are usually damaged goods. The best merchandise is what's called shelf pulls).

DP & Company of Florida sells a wide line of wholesale and liquidation toys, games and Airsoft products.

I have written about Western Express before. Western apparel and accessories are always good sellers. This company is a real wholesaler and offers a wide line of Western goods.

With the recession, Do-it-yourself (DIY) is hot. More people are fixing up, remodeling and painting. Mercantile Buyers is a large supplier of DIY products.

Hartmann Variety sells closeout & surplus DeWalt Tools, Bosch Tools, Irwin Industrial Tools and other power tools at wholesale prices.

Tool Logic is a great gadget tool site. This website is the retail one, but there is a link to become a dealer. Once you register they will send you the wholesale prices.

That's it for now. Stay tuned for our next newsletter in a couple of weeks.

Skip McGrath
The eBay Seller's News

P.S. If you missed the last issue, click here to read it.