Create a Bidding Frenzy and Sell More Product
Through the Giant Online Auction Sites
all the hype about online auctions? Why are we hearing so much
about them? Are they really profitable? And how can you get
have effectively created a giant virtual marketplace where people
can gather to buy, sell, trade, and check out the goods of the
day; they're enormously popular, high-traffic venues where start-ups
and auctioneers alike can begin selling product almost immediately,
- No overhead
- No sales
staff or distributors
- No web
site of your own
- No initial
investment (you'll pay between 2% and 5% of your final sale
price to the auction site)
In this massive
marketplace that will generate an estimated $48.5 billion in sales
by 2006 (Forrester Research), the auction site that rules the
game is eBay.
According to the Neilson Ratings, eBay is among the top ten
most-trafficked of all sites on the Internet -- and with three
million items listed in 3,000 categories and 1.5 billion page
views per month, this is not hard to believe.
the online auction industry with over 60% market share, while
its closest competitor, Yahoo!
Auctions, is only half its size, and Amazon.com
Auctions follows at a distant third.
of traffic that these sites attract make online auctions an ideal
place to capitalize on readily available, widespread exposure.
However, I must warn you -- the competition is fierce in popular
categories, and your product can easily get lost among the hundreds
you're selling a knick-knack or two or becoming a full-time baseball
card dealer, there are a number of things you MUST do to harness
the volumes of traffic heading your way and generate the highest
profits possible. That's why I've created an eight-step game
plan for selling products through online auctions to help you
make the most of this potentially valuable marketing medium...
#1: Select Your Site
First of all,
you have to think about which online auction site you want to
use. eBay is the obvious choice because of its reputation and
the amount of traffic it receives.
auction sites tend to cater to different markets. For example,
eBay has 25,000 laptops for sale but almost no birdfeeders, while
Amazon has 750 birdfeeders but only a handful of laptops. Amazon
has the reputation of being a bit less user-friendly, but if you're
selling a birdfeeder-related product, you may find an established
market here. On the other hand, you may have better luck selling
your item on an auction site that has less direct competition
-- your best bet is to test both.
which site is best for your product, check out the top three or
four in your field -- look at specialized auction sites as well
as the big ones. There are hundreds of specialized online auctions
that cover the spectrum from antique books to business liquidations.
item quantities and bid lists to see how much demand there is
for your product. While you're there, you might even want to try
bidding on a few items to get a feel for the process and the competition
involved. (But don't ever bid on an item that you don't plan to
#2: Pick Your Products
Are you going
to sell unique, one-of-a-kind products item by item? Or do you
have a product you can sell in quantity? Is there a demand for
your product? (This is less of an issue for one-of-a-kind items.)
What kind of profit margin do you expect to be making? (This can
determine whether or not you'll have to sell in quantity.)
In the world
of online auctions, niche markets are responsible for 43% of total
sales. Not bad, hey? But don't disregard the remaining 57% generalist
market share! Bottom line: you can make money with both.
are the best-selling items at auction sites, with computer hardware
and event tickets in second place, and toys and books hovering
around third. But while popular items may be easy for you to sell,
you could also make a killing on a unique item with a high profit
margin. People are making money hand over fist from specialty
items like cigars and lobster -- that are shipped by mail!
items" are where you can really cash in quickly. Remember
the Beanie Baby phenomenon? People went nuts and bid literally
thousands of dollars on them! It would be difficult to build a
web site and try to generate traffic around a fad item -- by the
time you were done, the fad might already be old news! But auction
sites give you an instant audience at a low cost, so if
you spot a trend, you can hop on the wagon as quickly as possible.
#3: Look at Listing Options
The next thing
you need to think about is HOW you'll sell your product. Auction
sites typically offer a variety of listing options for you to
choose from, including:
Listings: A regular listing is just that -- you pick your
category and your product gets listed in it. While this is the
most common (and really the least effective) way to list your
product, you should definitely start with this option.
You'll want to see how your product does before you decide to
spend money on featured listings.
Price Auctions: If you place a "reserved price"
on your item, it means that you have specified the amount at
which it should sell. This is done to prevent "auction
sniping," which happens when bidders lay low until the
very last moment, then grab your item without starting a bidding
competition. Reserved Price Auctions can be to your benefit,
but they may discourage bidders who are looking for the best
Auctions: Also known as "English Auctions," these
are one of the best ways for people selling in quantity to place
their products, because you can list multiple identical items
at once in each auction. However, on eBay you must have a "feedback
rating" (see Step #6) of 50+ and you must have been registered
for more than 60 days before you can choose this option.
Items: In most of the larger auction sites, you can get
your item rotated through the site's homepage as well as listed
in the "featured items" section for about $20. For
about $15, you can have your item appear in your category's
"featured items" section, or simply at the top of
the list. You can also have your photos displayed in a gallery
for only about 25 cents, or featured as a large photo at the
top of a gallery for about $20.
You also have
the choice of listing for 3, 5, 7, or 10 days -- and, of course,
you always have the option to re-list at the end of this time.
The standard option is a 7-day listing with an automatic re-listing
for a specified period of time.
#4: Choose Your Category
product categories on the various auction sites to broaden your
perspective of what goes where -- you definitely want to be specific,
but you don't want to limit yourself. While you are doing this,
check out the competition in different categories and have a look
at how much bidding is going on.
The very best
way to decide which category your product should be listed under
is to do a search on similar and related products, determine which
ones sell best, and see which categories they are in. You will
usually be able to pick one main category and one sub-category
-- use this method for both. Check to see how easily your product
can be found using the site's search tools before you settle on
do, do NOT try to gain more exposure by placing your product in
unrelated categories. Your online auction site will probably close
your account if you do.
#5: Create Your Ad
decided how and where to list your product, you need to turn your
attention toward selling it... And that means you need excellent
your target market -- who's going to buy your product, and, perhaps
more importantly, why. You need to grab their attention
and motivate them to buy from you.
first you need a very good title. It's really important that you're
specific: instead of saying "Doll" in your title, say
"Two-foot-tall dancing Elvis doll." Don't assume that
your bidders will understand you -- make everything as clear as
possible for them.
And make it
as exciting as possible. You'll probably have to pay a bit more
for special formatting like bolding or highlighting (one to two
dollars), but these can be a good way to grab the attention of
potential buyers. Use exciting and convincing words that draw
the buyer to your item: "Unique two-foot-tall dancing Elvis
doll -- Collector's Edition."
The same techniques
apply to your product description. Expand as much as possible
on your product -- obviously, there's only so much you can say
about a baseball bat, but what if it's an original 1915 Louisville
Slugger used by Babe Ruth himself in warm up? Try to create a
story around your product, even if it's just how amazing you personally
think it is (in which case you will have to come across as likeable
and convincing yourself!). Include specific motivations for buying
your product: "Be like Babe Ruth!" or "Impress
your friends with your dancing Elvis!"
other ways you can motivate your bidders -- can you provide
money-back guarantees, free shipping, or bonus products? Tell
them what you have to offer!
forget about photos! People don't want to buy what they can't
see... and on average, they'll pay at least 10% more for an item
that is accompanied by a photo.
Note: Make certain that you are NEVER dishonest in your
product descriptions, because you'll never have any repeat
buyers... and you'll get kicked off the auction site!
#6: Establish Trust
The best way
to establish yourself as a trustworthy, reliable seller in an
online auction is by having a good feedback rating. A feedback
rating is a listing of customer comments, rated as positive (+1),
neutral (0), or negative (-1).
If you are
not trustworthy, your feedback rating will warn other buyers to
stay away from you. If you have a positive rating, you can increase
your sales by as much as 7-9% (and this number will steadily increase
as the feedback rating system catches on).
Ask for feedback
from your buyers whenever possible -- most auction sites make
it easy for buyers to rate and offer comments on your service.
Not only do you want to build a positive rating; you also want
to show a large number of responses in order to establish yourself
as an experienced seller. Don't worry, though -- people don't
usually shy away from newbies.
that you get a good feedback rating, make sure you always:
- List shipping
costs (or additional costs) up front
your product right away
EXACTLY what you've advertised
buyers' questions immediately
... And always,
always follow up with great customer service.
#7: Get Exposure
all this time and effort into creating a great ad for the auction
site, so use it to your advantage! Draw more traffic to your own
web site by posting banners or links to your site on your ad.
(Be careful, however, that you aren't using the ad primarily as
a means of redirecting traffic -- this is called a "signpost"
and will get you kicked off the auction site.)
while eBay will allow you to link directly from your ad
to other items that you are selling on eBay, you can no longer
links to your homepage on your ad. However, you can still link
to your site from your eBay "About Me" page -- so be
sure to take advantage of this option!
And get that
ad out there! There's no reason why you can't use the same ad
to promote your product elsewhere, via e-mail or by posting it
on someone else's site or in their newsletter -- you can include
a link to the URL that your auction site will create for you.
The more exposure you get, the better.
is that you keep a list of all your buyers and e-mail them "thanks
for purchasing" messages, new offers, complementary product
information, or newsletters on a regular basis. Your best customers
are your repeat customers -- they will be responsible for 80%
of your sales! Once you get your name out there, you'll do nothing
but profit by keeping it out there.
Note: Some sites will let you link to a shopping cart
or order form on your own web site to complete the transaction,
but eBay will not. If you have this option, it is a great
way to steer buyers toward other products on your site once
they've completed the initial transaction.
always be testing and tweaking your auction listings -- even if
they're really good, you may discover that one or two simple changes
dramatically increase your sales! Start by doing regular listings
on two or three different auction sites, and, changing only one
element at a time, test the following:
- Ad copy
& photos: Tweak your copy continually until it is the
most compelling, most descriptive it can be. Test the ad a few
times with changes and track the responses you get.
If you're not on eBay, try raising your reserved price or
initial bidding price just a little. You can get away with this
on other sites because there will be less bidding competition
driving up your final price. You will almost always get a higher
price by staying in until the very end, allowing the last-minute
bidders to fight it out, so you should never pull out of your
auction early. You could also try N/R listings (No Reserved
Price), which may attract enough interest to start a bidding
You'll have to get a feel for what prices will attract the most
bidders to your products. Sometimes starting high can increase
the perceived value of your product; other times starting low
will attract more bidders and drive up the final price as a
result. It really depends on your product, your market, and
your understanding of both. Remember that buyers in online auctions
are generally looking for low prices and good deals.
Your ad will get the most attention the first day it is posted
and a few hours before the auction ends; weekend afternoons
are the busiest overall. But think about your target market
-- if you are marketing to housewives, you'll get the best response
on weekday mornings; working families will respond in the evenings.
Experiment to see which times work best for your product.
products: Once you've got the system down, you might as
well branch out! Try different products and don't be afraid
to get creative -- whatever you come up with, there is bound
to be something more bizarre that is selling in large quantities
settled on the combination that works best, try out different
auctioning options (Featured if your sales warrant it; Dutch if
you have multiple products) to see which will sell more product
at higher winning bids.
that as many as 70% of the items listed for auction on their site
result in winning bids (i.e., sales), so if you are below or close
to this percentage, keep working on it -- with these tips under
your belt, you can do much better!
is a directory of online auction sites and an auction meta search
provides software for businesses in online marketplaces, including
inventory management, listing services, automated checkout,
offers a variety of resources for sellers in online auctions,
including price guides and an appraisal service (you pay $19.95
and an appraiser will look at photos of your antiques and heirlooms).
are examples of business-to-business style marketplaces.
to set prices that attract bidders, write compelling ads, choose
the best categories that draw the most potential bidders, and
ensure that your auction closes with the highest profit margin
will have a dramatic impact on your success in the competitive
arena of online auctions. Whether you're looking to:
- Cash in
on a fad
- Start an
Internet business without a web site
the traffic these sites get as another profit channel for your
existing web site, or
- Get rid
of some extra stock quickly
... you need
to pay careful attention to the strategies I've highlighted in
this article if you want to guarantee that your listing doesn't
get lost in the crowd.
If you don't
have a product to sell, but have specialized knowledge of a particular
market or industry, then you may even want to consider becoming
an auction regular who monitors products in your field, looking
for exceptional deals that give you opportunities to buy low and
resell at higher prices. Of course, there are risks involved in
doing this sort of thing, so it's not recommended unless you have
an excellent command of both your industry AND Internet marketing.
matter WHAT you're selling, and despite all the "hype"
you've probably seen about how easy it is to "cash in"
with Internet auctions, the fact is, this is a business like any
other! You need to educate yourself and test the waters carefully
before diving in if you plan to be successful. People DO make
millions through online auctions... so it's not unreasonable to
think you can profit, too. Just proceed with caution! And market