Living while leaving eBay, Part two: Strategies to gain new customers - Archive March 2009

Every eBay seller who leaves for a new platform has the same problem raised: Where did my customers go?

I covered this in the article below, but the real question still lies, "Where did they actually go?" It can't be this hard to find new customers on my own website, or a lower volume auction venue, can it?

I'll take this bet with any eBay seller: Regardless of all the time and effort you have put into your websites and venues outside eBay, unless you have chosen a very high traffic competitor like Amazon (the only one that can match eBay's sales) you will lose more than 75% of your sales the first week of leaving eBay completely. Another bet I will make with nearly any eBay seller, you will only take 10% of your eBay customers to your new platform for a single order, and many won't return for a second order.

We have already established the reasons for this. These customers are truly eBay customers. If eBay kicked all the sellers off their site and setup an affiliate site, those same folks would keep shopping there for quite a while, not caring if they were buying from eBay or someone else like Buy, New Egg, or Overstock through an affiliate link on eBay. Think of it like this... each year, eBay sales fall 5-10%. Those are the only eBay customers that were not truly eBay's customers, but the customers of the sellers.

With this simple fact established with most businesses, the question now changes from "Where are they?" to "How do I get them?"
I discussed ways to market yourself to customers once they have made it to your site, but never did talk about how they got there in the first place.

1. Free feed submissions.
This can include highly popular sites such as StumbleUpon and Google Base, and go as far down the traffic scope as a small blog feed exchange. There are rarely bad submissions to feed engines and shopping directories. I had a question on a site I took down a year ago. This question came from a man who found it on a niche shopping directory I placed it on 3 years ago, and he found the contact email address I left on the index page. I had the message "If you are interested in seeing this site return, email me."

2. Link exchanges
Link exchanges can be tricky, but valuable to a website administrator to build traffic. One particular site I have has over 300 backlinks from link exchanges with other sites. Do not confuse a link exchange with a traffic exchange though.
Traffic exchanges can vary from "placement for clicks" or click swapping, to prizes for large numbers of clicks, or even as far as auto-click exchanges generated by hacker scripts.
A true link exchange will involve you finding a number of complimentary sites that offer a "partner" or "friend" page and adding them to yours as well. If you offer an affiliate commission, this makes it even easier to draw customers from these exchanges.
Always be sure to follow the other site's policies with exchanges, and you usually can't go wrong. If you have any reason to think a site may not be reliable, check the IP address here: http://www.mxtoolbox.com/blacklists.aspx

3. Paid advertisements
Let me first state that no startup site should ever, ever begin with a Pay per click ad program as it's marketing system unless you offer a unique product or service.
The best paid ads don't charge by click. The top ads are monthly or weekly rates, and can be bought on many blogs, forums, shopping sites, and even many high traffic social network users offer placement on their pages to advertise to all their friends for a set amount of cash. For some, this is the primary form of revenue for the site and they are more than happy to negotiate a long term price.

4. Affiliate programs
Imagine how foolish the Amazon critics were in the 90's when Amazon offered a $5 commission for every new customer signup, or how much the critics wished they signed up on eBay's affiliate program when eBay started offering $12 for each new user who made a purchase. Maybe the detractors were wrong?
Affiliate programs can be the #1 revenue booster for any website. Remember how many salespersons Avon and Mary Kay had in the 80's and 90's? That was a face to face affiliate program, where each seller made a commission each month on their sales. This has been adapted online to help a business by offering either a price per sale commission, price per user, or percent commission.
There are many affiliate ad companies that will help you setup your accounts, but you will pay anywhere from 10-50% of the commission back to them. A couple are Clickbank and Shareasale. They have a strong service, very well managed, but are also very costly.
Today, many free open source shopping carts offer an affiliate program system, including OSCommerce and Zen-Cart. Channel Advisor, Volusion, and ProStores have a affiliate program built into some of their carts. It depends on how much time and effort you have to spend on building your program.

5. This will be the last traffic generation method I discuss, and it is a tried and tested way to draw traffic. If you are following this blog, or visiting regularly, you have likely clicked on at least one of these links to the right. Most of these are sites I operate or am affiliated. Everytime I write anything, there is a way to draw traffic to at least one of my sites. I post on many movie forums and always place a link to my sites. I write here, and several other places, where I can freely post any link to any site I want within the content, or near the articles. Why doesn't every site administrator do this? The only negative is perhaps a little finger cramping, and that goes away with a few knuckle cracks. You don't even have to be a fantastic author to do this, because even I can. I have read eBay Titanium Powerseller blogs that look like a 7 year old child typed it, and they actually gained sales. It just takes time, and time management, to make it happen.

There is nothing complicated about building traffic. It can be done spending hours every day, or maybe just a few minutes a day. Would you see an ad for your car repair site on a jewelery store website? Probably not. But a handyman blog would be an outstanding outlet for your ads. Focus on where you would expect to find your own site, and you will see your traffic, and sales, grow.

Leaving eBay successfully... Is it possible? - Archive March 2009

It was October, 2006, and I was preparing to leave eBay. Paypal's "random" screening freeze on my account had practically ruined my feedback in less than 2 weeks, and there was no way to recover on a new ID or one of my old ID's in time to salvage my repuation. Preparations were in order. I had contacted my sales rep with my supplier to let him know I would be ordering far less, contacted my past customers to tell them about my new venue, and setup an account with a couple other payment processors. By January, my $30,000 online monthly sales fell to less than $300, and my offline sales slumped after Christmas. I was frazzled, fried, and fed up in less than 3 months.
Where did I go wrong?

There's a big hurdle that a former eBay seller must prepare to jump before leaving eBay. The world of online business is in reality nothing like eBay.

There are customer loyalties that don't match eBay shoppers. For instance, a customer on eBay may buy the same types of products from a different seller each time, while they will only buy that product from one or two independent merchant sites. The reason is, that these shoppers ARE loyal, but loyal to eBay - not to the seller. Have you ever had anyone tell you, "I bought this from eforcecity (or other major eBay seller) on eBay? No, likely they just "bought it on eBay." A customer may be a loyal shopper of Overstock.com, NewEgg.com, and eBay.com. But that shopper may not really care if they buy from these companies or a private seller on their sites.

Before the loyalties even start, a departing seller must be able to prove himself as reliable and trustworthy. I know very few sellers who started right away on eBay selling a high volume of Plasma TV's, but they may have been able to start selling HDMI cables to build their reputation and feedback first, moving on later to the high end products. The same is true with an independent website. A merchant must be able to prove that he is reliable, which can be accomplished in a few simple ways. Remember the HDMI example, and follow this story:
I begin selling handmade leather jackets on a website, but my prices are over $200 each and I haven't been live long enough to build a reputation. Here are 3 options to build trust before being able to sell my jackets.
1. I can run giveaway freebie contests and run keyword ads to promote them. This can work, but even a minimal advertising campaign will reap few immediate rewards.
2. I can give rewards to customers I carry from eBay when they refer new customers. This may work, but would they really put much effort in if they still have to get their reward by spending more money? I could possibly do better by adapting this into an affiliate program paying $5 for each new customer they refer.
3. I can start by selling belts and custom patches for about $25-30, and build my reputation on shopping sites with my merchant reviews. I could even offer free shipping on a future order for each customer that reviews my site, good or bad. Advertising budgets would be kept to a low rate, and I could get to know my customers early through post sale surveys. Who knows, I may even open up a whole new market in leather for myself.

Many leave eBay and think that their regular customers will loyally follow to their new sites. I have yet to witness more than a handful of examples, such as eMovieposter and Bargainland, who were able to pull this off successfully. When I shop on eBay, I don't care about anything but price and feedback. If I bought from that seller before, great, if not, I will hope it goes well.

Last is maintenance. Not maintaining your descriptions and products, but your customer accounts. All a customer expects is for you to deliver their order on time and offer an easy return policy if things go wrong. That's it. It's not complex, but many businesses make it more complicated than it should be.
1. "Sorry, the supplier is out of stock." This doesn't cut it with a customer waiting on their sister's birthday present. The real heroes of ecommerce will fill any backorder from a competitor, even if it means losing a few bucks. That customer receives the email stating, "Do not be concerned if your package arrives in a New Egg box. We made a mistake on our inventory count and are out of this product. We have ordered from a different merchant to ensure timely delivery of your order ot no extra charge to you." Most times, that customer comes back, because it is pretty unlikely that New Egg would do the same to serve them. Even if they start shopping with New Egg, they probably weren't coming back if you didn't fill their order elsewhere. It's a calculated gamble that works most of the time.
2. "Our business hours are 8-5, Monday-Friday." Well, I hate to tell these businesses, but I won't shop there. I don't shop at those times because I work too. If I have a problem, I want to talk to someone quickly, and since I work during their business hours I am out of luck. Honestly, who only reads email 5 days a week in any business, other than sites that outsource all labor from communication to fulfilment.
3. "The product must be returned in new condition, and a 20% restocking fee will apply. Shipping is non-refundable, and you must pay return shipping." They just lost me. If I get something and change my mind within a couple weeks, I want a refund. Their price of return is nearly not worth the effort to return it. Unfortunately, this is normal with thousands of merchants, and they strictly follow their policies.

eBay is a business opportunity, not a way of doing business. Needless to say, it is far easier to build business off eBay while still operating an eBay selling account, but it is possible that after the fact you can start fresh, leaving eBay behind. Just as with all that has been said about leaving eBay, if Foot Locker decided to leave a shopping mall, would the entire foot locker customer base travel somewhere else to shop with them? Probably not, and the shoe stores that are still in the mall would take the extra business gladly. But you can take on a whole new world of online shoppers who never shop eBay, but still don't have loyalties to any particular merchants and businesses. Attract and cater to them, and you can build a long road of success without eBay.

When is the last time you took inventory? - Archive March 2009

I really wish I knew why this came to me today, but it may be because I haven't taken a thorough inventory in months.
I was at a regional eBay seller convention in Atlanta a few years back. At the time, the biggest concern was eBay hiking the store fees a few months before Christmas. While there, I was talking to a bookseller about a particular graphic novel my wife wanted. He told me that he really didn't have a clue how many books he had, much less what titles he had. I thought, "How can you run a business like this?" Then again, I have done the same thing, on a much smaller scale, since November. The reality is, he told me later he had over 500,000 books. There was almost no possible way for him and his 2 employees to look at every single one. But there was a way for me to count mine.
At the time I was a Gold Powerseller, and had a 12x15 office with two walls completely covered with bookshelves that were slam full of movies and games. There were over 6,000 at the peak of my business, and each bookshelf held 300.
I took my first inventory when there was just one bookshelf with about 150 movies, and found that every one of the movies I had was listed on eBay. Once I reached that 6,000 mark though, it became somewhat more challenging to ensure they were all listed for sale. Using Turbo Lister, I had everything set to just punch in the UPC, add a line to the title of each, and upload. But, sometimes the UPC wouldn't work, and I didn't catch it. Or maybe the Good til cancelled would cancel. Possibly a non-payment that I just forgot to relist. In any event, I always had at least a few each time that weren't listed.
My strategy:
There were really more movies than I could count at the time, so I devised my own strategy. My wife, or the employee I had hired, would call off the names and the number on hand. I would search my eBay store for them. If they weren't in the store, they would go onto their own little shelf to be listed. That took care of any strays that got lost from eBay, but it didn't help me see if I had any listed that weren't actually in stock.
The easiest way for me was by just matching up total counts. I took a total title count and matched with my store, and if I was within 10 of what I had listed on eBay it was going to be a pretty good month. The entire process took about 4 hours a month.
I would count like this once monthly, and do just a total title count mid month, and it worked.

I have known sellers who take elaborate means to calculate, file, and stock their inventory who couldn't keep up as closely as I did, and take twice as long or longer to count. The truth is, when dealing with inventory I have to treat it like cash.
Rule 1: The less I handle it, the better off I am. I can't mess it up if I leave it alone, right? This goes for any product, in any quantity. If I am selling glass products, I am probably going to mishandle them if I touch them enough. If I am selling clothing, I will possibly stain a piece by moving it back and forth, or get so dust on it requiring me to wash it, costing money. The same with movies. I didn't open cases more than necessary, wouldn't move them around too much except to make room for new inventory, and I certainly wouldn't use them!
Rule 2: The simplest method is usually the most effective. I always shifted the movies and condensed them as far as possible, that way my newest stock would always be on certain shelves. I could have setup a spreadsheet with all the UPC's from a Turbo Lister import CSV file, sorted by date uploaded, and walked each shelf to match up all the UPC's or titles. Just setting up this spreadsheet would have been a couple hours, then setting the counting would have been an all day affair. Then, I am stuck counting them all again later! Sure, I would have been 100% accurate, but I would have missed about 20 questions leading to possible sales that day. So I may have missed $50 in inventory, but I would have lost $150 in sales.
Rule 3: Strive for thoroughness, not necessarily 100% accuracy. I never missed much counting with my methods. When I did, I would catch it the following month. The most thorough methods of counting inventory are the most simple, and I lived by that rule.
Rule 4: If it isn't making you money, it isn't always costing you money either. I would keep thousands of movies in stock for a couple months at a time, with sale prices averaging $7 each. My cost was usually 50%, and eBay fees were a nickel for each month. My newest inventory would always be what sold, but when I ran a special for free shipping over $50, my sales of the long term store inventory would skyrocket. In turn, I made much more this way than selling them at cost to re-invest the cashflow. While this doesn't necessarily work for high ticket products, most that cost less than $10 deserve a couple months to sell at full price.
Rule 5: The final rule... Don't take it too seriously. I could not forget I had a strong personal inventory as well to keep in check. I couldn't spend all day counting and barely see my wife, so she would help if possible, then I'd take her to lunch. It was a very simple way of making sure my inventory, while it controlled our finances, did not control our lives.

I still take inventory, although not for a couple months, but I must when dealing with suppliers at least keep an online inventory working. Keep working to perfect your process, and by all means, keep it simple!

Now if you will excuse me, I am about to start counting.