AuctionBytes Survey Shows eBay Sellers See Little Value in Top-Rated Seller Program

The Online Seller's News, October 26, 2009, Volume 9, No. 16

Tips, Tools, News and Resources for eBay, Amazon and independent Online Sellers
by: Skip McGrath

In This Issue:

Musings from eBay and beyond

1. AuctionBytes Survey Shows eBay Sellers See Little Value in Top-Rated Seller Program
2. New eBay Dispute Resolution Going Into Effect This Week
3. eBay Reports Earning’s Gain But It All Came From PayPal and Classifieds
4. Niche of the Month: Selling Used Cell Phones
5. eBay Wholesale Sources for October 2009

"There are three ingredients in the good life: learning, earning and yearning." ~ Christopher Morley

Musings for October 2009

Consignment selling continues to be a bright spot in eBay business-land.  As more and more people fall on tough economic times they are selling their treasures to raise cash. Yesterday I was speaking with a woman at my local supermarket whose husband had his hours cut in half and she was looking for someone to sell off some of their valuable collectibles.

I am pretty busy at the moment so I steered her to a lady in our town who does consignment selling and specializes in collectibles.  The next day the seller called to thank me for the referral. I asked how business was and she said she has so much business now that she can cherry pick her consignors and is only taking really good stuff that will be easy to sell. If you are interested in learning the eBay consignment business you can read about our eBay Consignment Business Manual here.

Our third story today is about eBay earnings in the last quarter. Although eBay was down, Amazon continues to rock.  Amazon sales were up 28% for the quarter and their profits increased 62%. I don’t sell that much on Amazon but what we do is pretty easy. Although Amazon takes a little more in fees, the listing cost is zero and they do most of the work.  If you want to learn how to sell on Amazon, check out the best-selling book about Amazon, Selling on The River by Steve Lindhorst.

eBay has updated their glossary and list of acronyms. I thought I knew most of them, but I saw a few surprises when I went through them. For example do you know what Guest Buying is and how it works? Or how the private auction listing works? Or how about MONMC or LTBX?  If you are occasionally confused by terminology or abbreviations, you may want to add these two pages to your eBay favorite’s file.

I started my online marketing career on eBay and I still think eBay is the best place to start. With all of the problems eBay has had over the past couple of years, it is still the lowest cost, lowest risk way to start selling online.  But if you have figured out eBay and want to expand into other types of internet marketing, you may want to look at the Internet Marketing Center program, Insider Secrets to Marketing Your Business on The Internet.  I bought this course over 8 years ago and it gave me my start to a successful business selling online. IMC has just released their 2009 course and they are offering a special promotion and some great free bonuses for the first 250 people who sign up. They are the oldest and largest internet marketing training company and have taught thousands of successful students.

Let’s get started with this month’s issue:

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1. AuctionBytes Survey Shows eBay Sellers See Little Value in Top-Rated Seller Program

AuctionBytes released their survey of eBay sellers last week on the success of the new eBay Top Rated Seller Program. “The majority of eBay sellers surveyed believe the new Top Rated Seller (TRS) program does not meet its stated goals. And while 52% of respondents said they were qualified to be an eBay Top Rated Seller, only 34% said their listings displayed the Top Rated Seller badge.” Reported Ina Steiner in AuctionBytes.

The survey covered several topics including seller feelings over the effectiveness of the new search algorithm that favors TRS sellers in results. This is of far more importance: “Respondents were then asked what affect the TRS search filter had on them; 18% thought the search filter was good for them; 23% thought the filter was neutral for them; and 59% thought the search filter was bad for them.” Please click here to read the entire article on AuctionBytes.

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2. New eBay Dispute Resolution Going Into Effect This Week

The new eBay dispute resolution process for resolving item not received and item not as described claims will be phased in for all buyers over the next several weeks. There is a lot here to digest –and most of it is good for sellers, so please take the time to read through it carefully as it will only work for you if you know the steps to take and follow them.

Starting this week, sellers can view and manage disputes filed through the new eBay process in the updated Resolution Center available from the Account tab in My eBay. eBay sellers will be able to see all disputes—whether filed through the new eBay process or through PayPal—in the Resolution Center.  Disputes filed through PayPal must still be managed through PayPal’s resolution center. Also, be sure to keep an eye out for alert emails sent from eBay or PayPal.

Here is how the process will work once all of the updates and changes occur:

If a buyer has been unsuccessful in resolving a problem directly with you, the buyer can contact eBay via a toll-free number or a web-form. A Customer Support agent reviews the case, runs a fraud check, and confirms that the buyer has already tried to work with you. If the buyer is in good standing, the agent reviews additional transaction information such as item description, members' account details, seller location, payment, and shipping method.

In some cases, eBay will tell the buyer to wait a little longer—if, for example, they haven't allowed enough time for an item to arrive—or that their claim doesn't qualify. If the buyer's claim warrants further investigation, eBay will contact the seller.

For item not received claims, sellers have seven days to arrange one of the following:

• Appeal the claim by providing proof of delivery. For items valued over $250, eBay  requires signature confirmation.
• Come to an agreement with the buyer to return the item or send a replacement item
• Or, refund the buyer

For item not as described claims, sellers have seven days to arrange one of the following:

• Contest the claim by providing proof to eBay that the item was described properly (for example, the buyer is claiming that the item is used rather than new, and the listing clearly describes the item as used)
• Send a replacement item, if this is what the buyer would prefer. Buyers are required to return the original item first.
• Or, refund the buyer. Buyers are required to return the original item first, except that buyers who make a counterfeit claim and obtain a manufacturer's or law enforcement certification that the item is in fact not authentic will not be required to return the item to the seller.

At the end of the seven-day period, eBay will check with the buyer to see if they are satisfied. If the buyer is satisfied, the case is closed. If eBay doesn’t hear back from the buyer, they won't refund them or hold sellers accountable for the transaction. If the buyer is still working with you, eBay will check back again in another week.

If the buyer is not satisfied, eBay will review the case. If they resolve the claim in favor of the buyer, eBay will refund the cost of the item and shipping to the buyer. If the original transaction was paid via PayPal, the refund will come from the seller’s PayPal account in a way similar to how PayPal currently reverses transactions. If the original transaction was paid through another method (credit card, for example), the refund will come from your payment method on file with eBay. (In item not as described cases, the buyer must send the item back to you in order to qualify for a refund.)

Streamlined unpaid item process

The first improvements to the process for unpaid item claims are now launched, including a faster process with fewer steps to resolution and buyer communications coming from eBay instead of the seller. Please note the window of time for sellers to open a claim is now 32 days instead of 45. The option to have claims opened automatically (Unpaid Item Assistant) is targeted to launch later this fall.

When a buyer wins an auction or uses Buy it Now, but does not pay for the item within the amount of time allowed, this is an unpaid item. If contacting the buyer doesn't resolve the situation, you can open an unpaid item case in the eBay Resolution Center. If the buyer still doesn't pay for the item after the case is open, you will get a Final Value Fee credit. Your Insertion Fees may also be refunded if you relist the item and it sells the second time.

How do sellers start the unpaid item process?

What’s different now?

• The process is faster: eBay has reduced the maximum time it takes to resolve a case to approximately 30 days (it used to take up to 60). There are fewer forms to fill out, and no more mandatory back and forth between the buyer and seller - sellers determine whether and how much to communicate with buyers directly and communication should take place in My Messages only.
• Communications are more neutral in tone: Emails about the dispute will come from eBay rather than from buyers and sellers. Also, unpaid item-related language is being softened throughout the site (the term "unpaid item strike" will no longer be used in communications, for example, even though unpaid items will still have the same negative impact on buyers' accounts).
• eBay is  introducing more automation into the process (this always worries me…): Unpaid Item Assistant lets eBay open and close cases for sellers automatically. Unpaid Item Assistant will be rolled out to sellers gradually to make sure the new process is working properly. The rollout began at the end of September 2009 and eBay hopes to make it available to all sellers by the holiday season, so you may not see the new automated process until later in the fall.

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3. eBay Reports Revenue Gain But Most Came From PayPal and Classifieds

eBay’s revenues were up but the core marketplaces sector dropped about 1% in third quarter year-over-year. eBay reported financial results for the third quarter ended September 30, 2009. The company posted third-quarter revenue of $2.2 billion, up $120.3 million from the same period last year. The company said that year-over-year revenue growth came mostly from the continued growth in PayPal, Skype and classifieds. On eBay itself most gains came from the fixed-price format. However earnings disappointed. EBay Inc. said its turnaround efforts propelled third-quarter results above Wall Street forecasts, but the online marketplace disappointed. Net income (profits) fell 29 percent to $350 million. So all in all, not a great quarter. eBay’s stock fell 5% in after hours trading and is off 4.4% the day after earnings came out.

PayPal continues to be the star player in the company's lineup and was responsible for most of the growth and profits. In the third quarter, the payments business recorded $688.1 million in revenue, up 15 percent from a year ago; as the number of active registered users jumped almost 20 percent.

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4. Niche of the Month: Selling Used Cell Phones

Used Cell phones are easy to buy and easy to sell.  If you do a Completed Items search for Used Cell Phones on eBay you will see that the sell-through-rate for used phones is very high. The average American replaces their cell phone about every two years.  This means that there are millions of cell phones sitting around gathering dust.  You can find them at thrift shops and garage sales, but by far the best way to find cell phones is to advertise.  A small classified ad in your local newspaper, craigslist or throwaway papers like the Little Nickel will get responses.  Here is an ad you can use:

Cash paid for Used Cell Phones in Good Condition.
Call Fred 360-555-1515

Below are some screen shots of recent used cell phones sold on eBay.  This is not a small niche. When I did a completed item search for used cell phone priced between $50 and $500, I got over 2900 results.  But the good news was that the sell-through-rate was well over 65%.  Obviously Blackberry’s were the best selling model, but really, phones of all types sold from very cheap ones up to units sell over $400.  When you get a call from someone with a phone to sell, just type the name and model number with the word “used” and you can see how much they are selling for. Be sure and look at completed auctions –not ongoing auctions. You want to know what the units sold for –not what the current bids are.  In general, once you see what a phone is selling for, you should offer no more than 25% of that price.  This gives you a 75% margin which gives nice profits after eBay and PayPal fees.

If you have teenagers or neighbors who have kids in high school, be sure and network with them as kids are big users of cell phones and are always upgrading.  If you live near a college or university be sure and advertise in flyers or the student paper.

Be careful of buying just a phone. When someone brings me a phone with nothing attached, I am suspicious that it could be stolen. Besides, phones with the box, charger and instruction manual always sell for a much higher price.

dozen times” look, won’t sell very well, if at all.  Lastly be sure and include a good photo of the front and back and any accessories.  If you get a phone and want the specs, simply Google the phone name and model number and you will find plenty of results that give the features and specifications of the phone. Be sure and include these in your listings.

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5. eBay Wholesale Sources for October 2009

I continue to get a lot of questions about the major dropshipping companies that advertise all over the web. My standard answer is that I do not endorse any of the large general dropshippers.  If you want to make money dropshipping (as we do), the single best source of locating small manufacturers and master distributors who will drop ship is WorldWide Brands. They are the only company of that type that I endorse. WorldWide Brands has recently announced a price cut in their service. This is a temporary promotion, so if you have been thinking about taking up their service, now is a good time to do so.

It’s getting pretty late to order goods to sell during the holiday season, but here are a few sources where you can still get orders in time if you act quickly:

Nashville Wraps is a Gift Packaging and Gourmet Gift Basket Supplies Wholesale Resource Nashville Wraps has a wide selection of gift packaging supplies.

Koehler Home Decor  sells Wholesale home decor accessories and unique gifts wholesale direct. Home accents, furnishings, bath & body, candles, garden decor. No minimum order. 

Esco Imports  Wholesale Toys, Novelties, Summer Toys, Military Toys, Aqua Sock, and much more!

Nature Craft Inc. is one of the largest Home Décor wholesale company in the United States. All products are manufacturer direct. 

Adams Wholesale is a small family owned and operated company. They supply high gift, collectible and home decor products at low prices.

Good Time Candle Co.  is a source for Candles, Candle Holders, Incense, Potpourri, Bath Sponges, Loofah Products, Vases, Lite-Up Pens, Gift Sets, Decorative Tins and Seasonal Merchandise.

Rico Inc. sells 100 different products for every major sports league: the NFL, MLB, NBA, NHL, NASCAR and NCAA. Products range from pennants, stickers and signs, to high quality leather goods and banner flags.

Entertainment Earth is a major retail and wholesale seller of Action Figures, Toys, Replicas, Collectibles, Gifts, and More! From Star Wars and GI Joe, to The Simpsons and Anime. Manufacturers such as McFarlane, Sideshow, Dragon, Mattel and many more! 

Closeout Place has enormous buying power. This allows them to sell brand names such as Nike, Adidas, Reebok, Fila, Converse, Puma, Skechers, Asics, Starter, Doc Martens and more at approximately 50% off regular wholesale prices. They also have an enormous selection of NFL, NBA, MLB, and NHL licensed team apparel. They have a 200,000 sq.ft. warehouse in Chicago. So if you live in the upper Midwest you can visit them in person.  They sell their items in case packs and the minimum order is $300.

That’s all for now. See you 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.

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