eBay Mistakes and Other Things Not to Do

PACKING MATERIALS: Along with boxes, packing materials used to protect your product from “box shock” can be a drain on finances if you neglect it. Loose fill, or “shipping peanuts” as they’re usually called, are the most popular kind of packing material on the market but can be expensive if purchased in small quantity. Picking up a small bag from your local UPS Store can run around $7 a bag which is usually depleted after a few shipments (sometimes on a single shipment). If you must use peanuts, purchase it in bulk from Uline for about $25. You’ll get a huge bag (20 cu. feet) which you can store in your garage if your wife let’s you. I know some folks who have attached their mammoth bag to a nozzle and strapped it their ceiling. That’ll save you room but I just pick up the bag and empty those noodles by hand. I feel like I have control over the amount and will reduce the amount of spillage. Also, if you buy your merchandise on eBay, chances are (depending on your product) you’ll get free peanuts. Recycle!

Newspaper is also a cost efficient way to reduce cost on materials but not how you think. Though I’ve used regular newspaper as filler in my shipments, the ink can rub off and cause a mess for the buyer or perhaps ruin the product. If you intend to use newspaper, see if you can wrap your item in a free USPS Priority Mail Tyrek bag. This will protect the item from ink and it looks good that you put in the extra effort. Actually just put the thing in a Tyrek as a general rule of thumb. My favorite shipping material has to be the unused newspaper rolls from local newspapers. This is the same kind of paper used for your sports section but are remnants that the outlet sells to regular schmoes like us. You can pick a large roll (make sure you have room in your Prius) for about $5 - $10.

Having an eBay business is hard enough without throwing away money on shipping supplies. If you sell multiple items every day with a low profit margin, you can’t afford to use new supplies from your local office supply store. Here are some ideas that have helped me ship items cheaply but professionally.

RECYCLED BOXES: Using old boxes can be tricky. Only use boxes that have light to no damage on them and never use a box with another company’s printing on it. Nothing says “professional” like getting your new mini-helmet in a box with a picture of bananas on the side. If you must recycle boxes, don’t go to the grocery store (or liquor store, mall, whatever) to get them. Those boxes will work great for moving day but look like garbage for your eBay business.

NEW BOXES: Don’t ever, EVER, purchase new boxes direct from a retail store (Office Depot, Staples, etc). Those prices will murder your bottom line. Instead, check out eBay or other online vendors. Their prices are half of what you’ll see in the store. eOfficesupply.com worked great for me. Buy in bulk so you can save money up front. Also, take a look around your office. Besides generating new ideas on what to sell, your office (aka “day job”), may also have a lot of boxes that were used temporarily for a cubicle move and will be thrown out that night. Take them to your car right now! Or, check with your mail-room. A lot of corporate offices will sell you boxes for personal use at an insane discount. (My office sells large boxes for $0.25!)

PRIORITY MAIL: There is no better deal than free. Oh sure, buying frugally will save you money but FREE is king. Because the USPS (United States Post Office) is losing money every year, they would love it if you shipped your merchandise Priority Mail. Hence why they provide free multi-size Priority Mail boxes and envelopes. If you’re selling DVDs, CDs, video games and so on, don’t ship Priority unless the buyer has paid for that service (or if you are doing the buyer ‘a solid’). However, with that said, PayPal will offer you free Delivery Confirmation when you use Priority Mail in conjunction with your labels so run your numbers before the switch. If you keep being Mr. Nice Guy with your shipping, you’ll be living in a van down by the river in no time.

“So how I can use Priority Mail supplies to ship First Class or Media Class mail?”

Glad you asked. Turn those bad boys inside out! Especially the tyrek envelopes that the USPS offers. They work great on DVDs and the product always arrives safely to the buyer even without the bubble mailer. (WARNING: A lot of shipping labels do not stick well to the envelope. Be sure to test your labels before you overhaul your shipping methods.)

Free supplies, Delivery Confirmation, speedy delivery, and automation of shipping are just a few of the reasons to use USPS Priority Mail with your business. The post office will also send you the supplies free of charge! Consider upgrading but only do so if the buyer is PAYING for this service and your product can support this method. (i.e. If it makes fiscal sense)

Stay tuned tomorrow for packing materials.

Which eBay wholesalers should I go through?

If you’ve heard of a wholesaler on eBay Radio or ads in Entrepreneur magazine and from a Google sponsored link, chances are everybody else has too. If everybody else is using it then you’re not going to find anything good, or worse, you may pay too much for your merchandise since the price is driven up by speculators. There are certainly good deals to be had if you know where to look and that place isn’t eBay and it most definitely isn’t Worldwide Brands.

Most of the sites that will be advertised to you are outlets for junk and excess inventory that merchants couldn’t sell in the first place. I call this method “Dump and rip” because they’ll dump their garbage on wholesale sites (to which you have to pay for access) and are looking to rip you off. Don’t look for things to sell on a wholesale site because you might get suckered into something you (A) have no idea what it is or (B) think because it’s loosely related to electronics, it may sell for a bit. Chinese wholesalers are notorious for this. After you search your soul and your home and decided what you are going to sell, take a good look at mom and pop operations around your town. Strike up a conversation with the owners (or managers, depending on the size) and probe them for answers for their wholesalers. You’ll be surprised how much they open up.

“But aren’t wholesalers bad?”

Not at all…if you know what you looking for. Once you find your niche, find out where you can get wholesale.

“What should I sell on eBay? What’s the most profitable item to sell on eBay that I can buy cheaply? Which wholesalers should I go through?”

These are some of the most asked question in the short history on online auctions. Here are some “real deal” answers to some of those questions.

What should I sell on eBay? If you don’t know, then chances are you shouldn’t be selling anything until you figure it out. A lot of people scour garage sales for items to “flip” while others make their own crafts and use eBay as their selling platform. Others, like myself, tried to find something that they enjoy and had extensive knowledge about. For me, it was movies. I love movies! So it seemed obvious that I would SELL movies. About a couple months into being an eBay Powerseller, I learned that it didn’t matter what I sold because it’s just moving merchandise. Anything you sell that is a high turnover for small profits item, expect that the allure of that product will be lost forever. I could have been selling rubber vomit and baby crap and it would have felt the same.

Look at your line of work. Is there anything that you can create that would benefit your job and your co-workers? Anything that can improve your entire industry? Look for a niche and exploit the heck out of it. Perhaps your company sells off old equipment that you can buy at a low, low price? Maybe you could fit that copier into your Mini-Cooper…not that I advocate it.

Look around your house. Do you have a bunch of stuff laying around that you don’t want? Random objects you purchased that were never used? Or even better, some stuff from the ‘80s like Thundercats toys, Voltron or even an old NES with games!??! (Maybe that was just me) Retro stuff is big on eBay. Kitchen equipment, car manuals, and old cell phones sell big time. Like me and most Americans, you probably have a house full of odds and ends that you could sell for months and make a nice chunk of change. View this as an opportunity to de-clutter your life.

Look at your neighborhood or region. Do you live in an area with a popular sports team? Put their schedule, game giveaway, pennant, whatever, on eBay! This only usually works when your local team is popular. Sorry Arizona.

If sports doesn’t work, then look and see what you can sell from local stores that are going out of business or Goodwill, Arc, and random thrift stores.

Do you have any tips you want to share? Heard any great stories of how people sold <random item> on eBay and  it sold for <insane dolla’, dolla’ bills>?

This is Part 4 in the series Powerseller Mistakes: Used DVDs is a Red Herring

• Part 1
• Part 2
• Part 3

In a continuation of the sourcing topic for Powerseller Mistakes: Used DVDs is a Red Herring, I wanted to point out a few extra tidbits worth noting and is BY FAR the most important aspect of sourcing. This would be applicable, not only for selling DVDs, CDs, NES games, and so on, but for anything you’re attempting to buy “wholesale” for selling on eBay.  Do not get into a bidding war. Never. Ever.

Time after time, I would watch DVD lots in “My eBay” and in the heat of the moment, I would break my self imposed rule of not buying a DVD lot for more than $2.50 per movie. (Most  buyers who are looking to procure DVD lots –which are almost always eBay Powersellers — will not spend more than $3 per disc.) I’d use eBay snipping tools to try and land my lot at a price that kept my profits high but most of the time, I would end up using the tried and true method of real time bidding. The horror.  Most of the lots I won (and they were massive 700 movie lots) were purchased with each DVD being $3.25 or so. I thought I could make this up through my shipping but I didn’t even come close. I learned an important aspect of buying merchandise online to sell on eBay. It’s not what you BUY that’s most important, it’s what you DON’T buy. Too bad I didn’t know that going in.

This is part 3 in an ongoing series entitled Powerseller Mistakes: Used DVDs is a Red Herring.

• Part 1
• Part 2

Here’s the cold hard truth. Unless you have some sort of a connection in a particular industry and is able to acquire merchandise that is (A) in demand and (B) has a profit margin higher than the change found in your couch, there’s not much out there that you can source and make a nice profit on. Don’t count on cell phone accessories or different kinds of media (DVDs, CDs, whatever). The market is flooded with that stuff and you’ll be busting your hump for little or no profit at all.

“Where can I find DVDs to sell on eBay?”

Some people have been able to sell new DVDs on eBay and make a living. When I say “make a living”, it’s probably in conjunction with multiple revenue streams, so don’t think that some of the DVD sellers have found some magic secret that has granted them the ability to solely support themselves off auctions or an eBay Store. They probably haven’t, so lower that bar a bit if you’re setting out to emulate them.

Here’s the catch about selling new DVDs: Unless you’re Best Buy, Amazon, or Wal-Mart, you’re not going to buy enough merchandise to get discounts on mainstream titles. Sure, some sellers do get discounts on new DVD titles but take a good hard look at the listings. They’re old and have fallen out of demand. Unless they stumble upon the rare of case of finding a DVD that’s out of print, they’re not making a lot of money directly form the merchandise. Remember, they’re probably getting most of their money from shipping. Also, Ingram (the largest distributor of DVDs and books) probably doesn’t want to do a lot of business with eBay sellers. It’s nothing personal, they just won’t be making a lot of money from you.

In my case, I went with used DVDs. They were much cheaper to purchase and they seemed like they were in demand. Where’s the best place to buy used DVDs? Ailing video stores? No, it’s eBay! A lot of what you see in the used DVD business is a circular process. Most of the used DVDs purchased are from lots on eBay. Plug in the following into eBay:

• DVD lot personal collection
• DVD personal collection

You get the point. You want to look for ordinary individuals selling their movies. But beware, there are some auctions to watch out for:

1. Don’t fall for vulture traps that are trying to capitalize on your inexperience. You’ll see TONS of DVD lots selling for cheap because they’re filled with…well…”filler”. DVDs that you see for $0.50 USD at Wal-Mart. If you don’t see titles in the auction, DO NOT BID.
2. You’re not going to be the only DVD/CD seller on eBay. Far from it. A lot sellers sell their excess stock (under a different ID) as a “personal collection lot” to try and recapture some of their loses. These auctions can be tricky to navigate because it may appear that there are some great – modern – movies inside. Legitimate DVD listings will contain a list of the movies they’re selling so the first thing you’ll need to do is check the listing against Terapeak. Terapeak is a third-party tool that will tell how much certain items have sold for in the last 3-6 months for free. Enter in a movie title and see how much it sold for and make your bid accordingly.
3. A lot of times, sellers will pick up rental copies (from Blockbuster, Hollywood Video, Mom & pop, etc.) and try to flip them on eBay. If you are keen on a lot for some “personally owned” DVDs, ask the seller how many former rentals are in the lot. I wouldn’t call rentals a deal breaker but, as you can imagine, former rentals are generally more beat up and the cases are different from the regular film. Buyers care about this.

Any tips you’d like to share? What have been some of your experiences with selling DVDs or…anything! Name some things to avoid and help make sure new sellers are taken for fools.

This is part 2 in an ongoing series entitled Powerseller Mistakes: Used DVDs is a Red Herring.

Part 1

It started out simple enough. I like movies. So much in fact,  I  actually WRITE about movies so it seemed like a natural progression: Selling movies will be fun and profitable. Yeah, not so much.

In the early days of my burgeoning eBay business, I read countless books about the subject and dug around online trying to find a winning formula for success. There isn’t one. I went with used DVDs (and later used CDs) because it looked like others were pretty successful at it. Scroll through eBay and take a look. You’ll see a multitude of used DVDs sold as “1 Cent” movies which leads people to believe that it, “Looks like there’s more than enough money to go around! YeeeeeHAW!”

“How can I sell DVDs for a penny and still make a profit?” The answer is shipping. Pure and simple. It doesn’t matter if it’s movies, comic books, Nintendo games, or CDs, sellers make their money on shipping. If they make a tidy profit on the actual item, then that’s just gravy. Take a look at the below item that’s currently for sale on eBay:

Item number: 200251482502

sammy61y (whom I don’t know)  is selling a used copy of Three to Tango on DVD. Bidding is currently at $0.01 USD with no bidders. Honestly, I’d be surprised if it went over a penny. Three to Tango isn’t exactly a hot commodity but there’s a buyer out there for everything*. Here are some other fun facts about this auction:

• Shipping: $4.99 USD – USPS First Class (US), $5.99 USD – USPS International (Canada)

•  

• $1.25 off for each additional DVD.

Actual shipping usually runs about $2+ for USPS First Class mail with a #6 bubble mailer when shipping to the US. Canada isn’t that much more expensive! It’s only about $0.20 to $0.30 more yet the seller is making they buyer pay a dollar more. Why? Though it’s more profitable to ship to foreign countries, it’s a huge pain in the ass. At the time of this posting, PayPal hasn’t automated the label printing for customs labeling. It takes a few minutes longer for each item which adds up because you have to do them manually.

When I sold DVDs, I put the starting price at $0.01 like everyone else but with a shipping price of $3.95 (First Class) to try and be a bit competitive. Most of my DVDs sold for only a dollar which put my earnings about $0.25 a sale after eBay/PayPal fees and supplies. Sadly, A LOT of my discs sold for a $0.01! Ironically, these buyers were the most troublesome (I’ll go more into that in later posts). This put my revenue upside down thanks to buying my DVDs with all the gusto of a drunken sailor (complete with cursing).

If you were to sell your DVDs with FREE SHIPPING, buyers will flock to your listings. DVD prices go MUCH higher when buyers see that they can save on shipping and will create bidding wars for your merchandise. I never felt comfortable doing that because the shipping price was a safety net. Even if one of my DVDs sold for a dime, I’d still make over a dollar. In the end, this really compromised my listings because my competition went “balls out” with their movies by promoting the fact that they had FREE SHIPPING.

The next installment will go into how I sourced my product and what you can do to find a winning deal.

Is there a winning strategy that you have implemented? Are you a Three to Tango fan? Who doesn’t love Neve Campbell?

This is part 1 in an ongoing series entitled Powerseller Mistakes: Used DVDs is a Red Herring.

• Part 2
• Part 3

For those future Powersellers looking to find an item to sell and embark on a journey to a self-sufficient home business, for the love of Pete, don’t choose used DVDs. And while we’re at it, don’t choose new DVDs either. Take it from me, that’s an avenue that’s harder than you think and with an ROI (return on investment) that may leave you thousands of dollars in the hole. When it’s all said and done, you’ll be groveling at the feet of the crack rock known as “working for somebody else so you have health insurance for your kids.” I’ve been there and here’s some lessons that may prove beneficial if not educational. This week I will be starting a series called “Powerseller Mistakes: Used DVDs is a Red Herring”

 In this series, I’ll go over where I bought my DVDs, what business practices I used to sell them, shipping, supplies (for both shipping and office) and mammoth mistakes I made along the way and what you can do to correct them. I’ll also provide some spotlights on some people that have made a “living” selling media such as DVDs, CDs, and other mass consumed items. Though I’ve sold DVDs and CDs, you can apply any of these lessons to just about anything.

We’ll also be going over legalities too. Don’t run a business without formally declaring yourself as a business. That will come later in the week along with business features that are peddled to eBay Powersellers daily.

Continue on to Part 2

This isn’t only for Powersellers or those looking to become Powersellers (which is becoming more commonplace), this for any buyers or sellers on eBay, Amazon, Half.com, or any other venue that may prove useful for everyday people. If you have any stories or best practices learned from your past experiences (or questions), enter them below.