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FREE Wholesale Product Sourcing MagazineThe eBay Seller's News, May, 2009, Volume 9, No. 7 eBay Tips, Tools, News and Resources for the
Professional eBay Seller
When you read the above quote by Thomas Jefferson you may think I have taken a political turn in my newsletter, but have no fear. My readers come from all sides and corners of the political spectrum and I respect that. But seeing my quote you could be forgiven if you thought I was taking a political position. Actually I was only referring to the subject of my second article: Will eBay Sellers Soon Pay Out-of-State Sales Tax? As you will see when you get into the details, this is a potentially frightening development for small eBay and online sellers. It could be especially devastating to online sellers who make their money with affiliate marketing as that seems to be one of the government's targets. So I am not moving right or left -just staying in the sensible center where most small and home business owners find themselves and keeping a healthy skepticism when it comes to government trying to solve my problems. The sales tax issue is just one of the challenges facing small online sellers. Congress is working on all sorts of ways to get their hands into the pockets of online merchants. And even the United Nations is now on the field. They want the United States to turn over control of the internet to a group of 12 large nations who would oversee it for "the benefit of all mankind." We normally publish two newsletters per month, but earlier this month we had an illness in the family to attend to (all is well now), so I am a little late with the early-May issue. I have decided to just publish this one issue in May and then we will be back to twice a month in June. It seems I owe you, my readers, an apology. Last week I sent out a special issue about Drop Ship Focus. In my email I used the word "directory" to describe what the free offer for Drop Ship Focus was. That was in error. There was a little miscommunication between myself and Worldwide Brands about the content of the product. I assure you it was unintentional. The product did indeed previously sell for $97 but the drop ship sources were not included in that. Also the landing page for the free product was a little confusing. (So, if you did sign up to receive Drop Ship Focus, click on the red link under the sign up box that reads 'Already Signed Up? Login Here) But all is well now and the free offer is still available. Although it does not contain the actual drop ship directory -it does contain essential information you need to know if you are going to drop ship products or work with drop shipping companies and I strongly recommend the information to my readers. Here's a list of what Drop Ship Focus Members Get ($97+ value for $0): * 5 Educational Video's about Drop Shipping & other key wholesale methods Content includes topics such as: * Click on the 'TRY IT NOW' link under the Supplier tab and get access to snoop around the Member center as a guest. Here is the link to get your free Drop Ship Focus Membership. You won't be able to access supplier information, but you'll be able to give
the Product Sourcing Tool a full test to see how it works, and you'll also get
to check out all the functionalities of 'The Whole $ale'. The purpose of this free promotion is to introduce you to the WorldWide Brands education and sourcing product. Because of the confusion, I spoke with my friends at WorldWide Brands and they have decided to offer a temporary coupon to any of you who would like to purchase the full service. If you use this link, you can save $30 off of the full membership cost for the next 30-days. eBay has reached out to new and small sellers with a new fee promotion. Starting June 16, 2009, Sellers will get 5 free Insertion Fees every 30 days for Auction-style listings I have been fairly critical of eBay lately as they seem to be ignoring new and small sellers. But here is a great promotion that will benefit this group. Here's how it works: Regardless of your start price, your first 5 Auction-style listings will have NO Insertion Fees when you list with eBay's Sell Your Item form or Simple listing form. Note: This means that if you now use a third party service such as Auctiva, Vendio or InkFrog, you will not get the discount unless you log into eBay and use their form. The Final Value Fee for these 5 listings with $0.00 Insertion Fees will be 8.75% of the sales price or $20, whichever is lower. Any additional items sold during the same 30-day period will have the same Insertion Fees and Final Value Fees as they do today. The 5 listings with $0.00 Insertion Fees are especially helpful to sellers who don't sell in high volumes, but offer the kind of unique and hard-to-find inventory buyers expect to find on eBay. This is exactly the type of seller eBay needs to attract and keep. Be sure and use your 5 listings strategically. Don't waste them on items with a 99-cent starting price. Use them on items with a higher starting price. The final value fee can be a bit higher on lower priced items. So this may not be good for everyone. Here is a link to a free eBay fee calculator if you want to check your listing before you list. With the economy slowing down and people losing their job or thinking they may lose their job, interest in learning to sell on eBay and selling from your own website is increasing. Lots of folks do just fine with my books, but others need more help. I have had a personal one-on-one training program available for the past two years. If you would like to learn more about it, click here to read about a special offer for the first 20 people who sign up for a personal interview. This month's featured articles: [top] 1. FREE Wholesale Product Sourcing Magazine I have a great Free item for my readers this month. My readers can get a free copy of a Wholesale Product Sourcing Magazine from Global Sources. Actually you have your choice of several magazines -just select your product category. They include:
Each magazine is loaded with advertisements from wholesale sources who are looking for buyers like you. These magazines are meant for importers, but they are really valuable for any seller. Most of the sources sell in large quantities, but many of them import directly and will sell direct from their US warehouses. Also if you ever thought you may want to try importing, there is a ton of useful information in each issue. These sourcing magazines normally charge over $20 per issue, but you can get a sample issue now for free. Click Here to get your Free Product Sourcing Guide. [top] 2. Will eBay Seller's Soon Collect & Pay Out-of-State Sales Tax? Before I get into this, let me take a moment to explain the issue for those sellers who may not understand sales tax numbers. If you are the occasional seller who dabbles in eBay and only sells the occasional item then you don't need to worry about this. But if you regularly sell on eBay or other online venues then you need to understand how sales tax works. Each state, with the exception of a couple states who do not charge sales tax, requires sellers to collect and pay sales tax on sales that are made within your state. For example: If you are in Ohio and you sell a product to someone else in Ohio, then you need to collect and pay sales tax on that sale. But if you are in Ohio and you sell something to someone in Montana -or any other state, then you can ignore the sales tax. That has been the rule for several years. However, if you have operations in another state, such as a warehouse, then you would have to pay tax in that state as well. Here is an example of that. You are in Ohio but you use Amazon to fulfill your orders. If Amazon uses their warehouse in Kansas then you would also have to pay sales tax if you shipped something to Kansas. So far this isn't a big problem for online sellers. At worst you only have to worry about one or two states. But since the economy has been in the toilet, the states are seeing less revenue from sales tax and property taxes. Instead of cutting budgets like private industry does, the states just look for ways to make more money. It seems that government always wants everyone else to sacrifice but they never want to sacrifice themselves. So now several states have seized on the fact that companies like eBay, Amazon and Overstock have affiliate programs. You know - these are the programs that pay you a commission if you refer a sale from your website or blog. So now the states say "Hey, if you Amazon (or eBay) have an affiliate in New York who refers business, then you have to collect and pay sales tax on all sales in New York." Next they will be using this same logic to tell you the eBay seller, that since eBay has affiliates in all 50 states, then you have to collect and pay sales tax in all those states. We haven't arrived at this position yet, but the states are looking at the hundreds of thousands of eBay sellers who sell over $40 billion worth of merchandise a year and trying to figure out a way to get their piece of the pie. They already did this to Overstock.com, and Overstock decided to kill their affiliate program rather than collect and pay the tax. It makes you wonder: If this passes will Amazon and eBay also kill their affiliate programs? Lest you think this is not a big deal, let me tell you about our experience here in Washington State. So far we only have to collect and pay taxes on our in-state sales. (We also have something called a Business & Occupation tax which I won't cover here.) Since Washington has a fairly small population compared to other states that doesn't sound like a big deal. As it turned out, last quarter we only had 23 sales. In the past we could do our quarterly sales tax in a few minutes. We calculated our sales, figured out the sales tax, B & O tax, filled out a simple form and mailed it off to the state. The whole process took about 20 minutes. But then Washington changed the deal. Washington has a state sales tax, but all of the counties and cities also have their own tax they add on top of that. In one county the tax could be 8% and in another county it might be 8.35%. So now, we have to figure out all of our taxes by street address, zip code & county and send each county their individual amount. For example, last month we had a $19 sale to King County. The city & county tax is 2.3% in addition to the state tax of 6.5%. So we had to look it up on the web, calculate the amount and send King County a check for .44 cents. And when they received that check some government employee had to log it in and deposit it. Boy that was really profitable for them. So this quarter Karen spent over three hours to report and pay taxes on a total of 23 sales we had in the state for a total of $26.10 that was sent to 11 different counties. [top] 3. Are Huge Sellers Crowding The eBay Marketplace with Unsalable Goods? eBay has a new strategy. They have decided that their salvation will come from contracting with huge sellers and give them free, or ridiculously low listing fees, to get them to list millions of items on eBay. I don't want to get sued, so I am not going to mention the sellers, but they are some of the largest on eBay. I am not talking about just "large" sellers -the guys who have 50,000 listings -those sellers pay the same listing fees you and I do. I am talking about mega-sellers who have hundreds of thousands of listings. These are the guys who get the deals. You might think it's great for the market to have more inventory? It would be if the inventory was good stuff that actually sold and it was offered by sellers who provide a high level of customer experience -but I am not seeing that. I am seeing sellers who have 500,000 items for sale, but only 50,000 of those items are selling. And a lot of the stock is unsalable junk just parked on eBay in case someone wants it. Yes, the 50,000 or so good items are selling. eBay earns fees and the sellers make money. But the problem is with the other 450,000 items of essentially unsalable inventory the seller has parked on eBay for free. It is these listings that crowd out the other sellers. I seem to remember a few years ago when eBay had very low fees for eBay store listings and sellers where parking tons of inventory in their stores. eBay raised the fees to drive the unsalable merchandise out of the stores. eBay said their future was in auctions and they wanted better, faster-moving merchandise on the platform. They seem to be going back to a sales strategy that didn't work. [top] 4. Three Ways to Cut eBay Listing Costs It doesn't really matter what business you are in -when business slows down, you have to cut costs. eBay is no exception. There are many ways to cut costs, but I decided to focus on three areas where you can realize the greatest savings:
[top] 5. Do I Really Need an eBay Store? Most full time sellers, including myself have an eBay store. But I am starting to question the value. Ever since eBay changed the Fixed Price listing format, I have been selling more of my fixed price items with that format than from my stores. eBay's new policy regarding fixed price listings allows you to list an unlimited number of identical items in one listing for 30 days at a time for one low fee regardless of how many items you offer. Let's compare the fees:
I have a featured store that costs me $49 a month. It costs me $0.35 to list an item in the fixed price format. So I can list 140 items ($49 ÷0.35 = 140) all month long in the fixed price format for what I am now paying to list about 30 different items in my eBay Store. I looked at my eBay sales report for the past three months and the picture for my eBay stores was not pretty. For example, in April I had 37 items sell at Fixed Price for a total of $4888. In the same month I sold 6 items from my eBay store for a sales total of $979. The biggest factor when you compare stores versus fixed price is the fact that fixed price listings come up in the eBay search engine, but store items generally do not. To see store items, buyers have to click on the link to your store or go to eBay Stores to perform a search. So I am really beginning to question if I need an eBay store. Obviously there are some advantages to an eBay store: With an eBay Store, you can display all your listings-regardless of format-in one location. Sellers can create and personalize your own eBay storefront with a unique website address. An eBay Store comes with tools that you can use to build, manage, promote, and track your business. And you can create a unique brand on eBay. The advantages tend to accrue to large volume sellers with lots of identical merchandise. But if you are always selling different items or are a low volume seller, you may do much better with eBay Fixed Price listing format. [top] 6. Niche of The Month - Broken Appliances & Parts A few years ago I was puttering around in the garage and I came across an old espresso maker that we hadn't used in years. So like any good eBay seller does, I cleaned it up, took a few photos and put it on eBay. My wife saw the listing and turned around and said to me: "does that thing still work?" "Hmmmm," I thought, "It was working the last time we used it a few months ago." So she went down to the kitchen and tried to make a cup of espresso. When she turned it on it shot coffee and steam all over the place. Turns out all the seals had dried out. So I pulled the listing from eBay and renamed it "Broken Espresso Machine for Parts Only." Whereas before I was thinking I could get about $100 for the machine, now I figured out I might still get $10. Boy was I surprised when the auction ended and the machine sold for $78 with three bidders fighting it out at the last minute. It turned out all three of them had the same old model. They loved it, but needed a spare part they couldn't get anymore. Lest you think this is an unusual event, take a look at eBay. If you look at almost any small appliance category you will see lots of listings for items that are being sold for parts or sold AS IS. This is being done with everything from computers to coffee makers, cameras to iPods. When I searched the term "as is" in the eBay search engine, I got over 12,000 results. Here is a screenshot of just a few items for sale:
Those are items now selling. Here are some items from the completed listing search so you can see what they sold for:
As you can see there is everything from a wrist watch to a camera to a mobile phone. I even saw a broken cuckoo clock that sold for $125.00. Oh yes, there was also a listing for a Saeco Vienna Espresso Machine "as is" for parts that sold for $123.95. I spoke to one seller who sells a lot of broken items and he told me he finds most of his merchandise at thrift shops. A lot of the items actually work, but he doesn't bother with that. He just sells everything AS IS. If it works too, then the buyer is really happy, but if it doesn't then the buyer is still satisfied. [top] 7. New eBay Wholesale Sources for May 2009 This month I am featuring mostly sources for things around the home and garden as those product categories are doing very well on eBay now and seem to be somewhat recession proof. Please Note: Many of these websites do not reveal their wholesale info on the website. In some, you have to register online and for others you have to email or call. This is actually a good thing as it discourages casual buyers. Always be polite and professional when contacting them and you will get the best results. Baroque Home & Garden features a great line of garden sculptures and fixtures. You will have to fill out the form on this page to see the products and get pricing. Deakins Studio is a family-owned manufacturer of high-end cast-stone garden statuary and art pieces. Each piece is created and cast by hand, and all of the colors are hand-applied. Their designs include classical old-world reproductions, one-of-a-kind garden sculpture, and contemporary art pieces. The Fly-Your-Faith Gallery sells a line of Christian flags, banners, magnets and other merchandise. You can see the products on the website, but you will have to call them at 770-347-7848 to get wholesale pricing. Grainware offers art-quality acrylic products for fine home living. These pieces have beauty of cut crystal and the durability and practicality of acrylic. The flexibility of Grainware products is evident in its ability to go from the formal dining table to the outdoor patio. I have seen these products in person and they are very high quality. The website does not give much information. You will have to call or email them for wholesale pricing and availability. Tel: 800-473-0504, 310-375-0505 Email: support@wmbondsltd.com. When you contact them, give them your location (nearest large city) and ask for the name of your local rep. Szco is an importer of a large line of knives, scissors and tweezers. Some of their products are licensed including Harley Davidson, Colt and others. You will have to register first to see the prices (this is normal for most legitimate wholesale sites). The Flipo Group sells a really unique line of solar power garden lights and home décor LED light powered items. They also have some wonderful pet products including leash lights and pet blinkers. I haven't tried this, but I was told this company will give better pricing than they list on their website if you contact them for a quantity purchase. Kenetic (a division of Pathway Corp.) is a manufacturer and distributor of a high quality line of steel cookware. Habana Co. Nautical Resort Clothing to take from the Dock to the Dining Room. Specializing in Designer & Vintage T-Shirts, Polos, Shorts & Fishing Clothing. As with many specialty suppliers, you will have to contact them through the website to get wholesale information. Toys Dropshipper sells a large line of model cars and toys. I am often hesitant to recommend dropshippers I don't know anything about. They may be fine -I just don't know. But they do have a great product line. See you in June Skip McGrath P.S. If you missed the last issue, click here to read it.  Click Here. Double your traffic. Get Vendio Gallery - Now FREE! |
 
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