Tag Archives: John Morgan

About 2426 days ago E-Commerce

Using a Drop Shipper

Imagine selling on eBay without the headaches of storing all that inventory, standing in line at the post office five times a week or calculating shipping costs to Guam. The answer could be as simple as two words: drop shipping. Drop shipping, simply put, means not being involved with the product itself. As a retailer, you can avoid ever putting your fingerprints on the inventory. Here’s how it works. A buyer submits payment information. The order goes not only to your business, but also to the wholesaler who ships the order directly from the warehouse to the customer. The wholesaler, offering drop-shipping services, handles shipments, returns, and maintains your inventory. “If my business location is virtual, why can’t my inventory be virtual too?” points out Jeremy Hanks, author of Drop Shipping for Dummies and eBay Inventory The Smart Way.  Hanks, whose company, Doba, is also a certified eBay developer, helps eBay businesses get off the ground. The trickiest part about using drop shipping is finding a trustworthy drop shipper. Companies, like Doba, can help you find a reputable drop shipper to trust with your business. If you can’t afford to go that route, Hanks offers the following tips: Search for wholesalers offering drop shipping services on Thomas Net, an online resource for industrial information, products, and services. Research the wholesaler’s website. Is the company a member of the Better Business Bureau? A professional-looking site doesn’t guarantee reputation, but an amateurish site is a red flag that you’re taking a big risk. Call them. Don’t just communicate by e-mail. Make sure that the 1-800 number actually works and get a feel for the company by who answers the phone. Drop shipping has allowed many entrepreneurs to streamline their businesses, so they can expand beyond the mom-and-pop level. “There’s been a professionalization of selling on eBay,” observes John Morgan, an economics professor who studies e-commerce at the Haas School of Business at the University of California, Berkeley. Is it right for my eBay business? There can be somewhat of a stigma attached to companies that drop ship. The bigger companies on eBay will sometimes criticize the smaller ones who drop ship, insinuating on message boards and blogs that drop shipping is for the less serious business owner.  “Proponents for and against drop shipping are as vocal in their beliefs as are Republicans and Democrats. Go carefully here. Very carefully,” says Brad Schepp, author of the upcoming book How eBay Really Works. Jim “Griff” Griffith, Dean of eBay University, the online auction’s sanctioned school for newcomers, and author of The Official eBay Bible recommends drop shipping, but quickly adds that it’s not for everyone, particularly new sellers. A drop-shipping arrangement can be complicated to set up. A business has to be wary because there are some fly-by-night drop operations offering drop shipping. And if the drop shipper doesn’t ship promptly, mishandles a return, or sends a lower quality product than what was marked for sale, it’s the eBay seller that gets blasted in the customer feedback. “I’m always hesitant to recommend drop shipping to a new seller,” Griffith says. “You want to get comfortable with selling first.”   Griffith does offer a piece of advice to those who do choose to drop ship. “Have a small stash of inventory around in case something goes wrong,” he says. “If the drop shipper is out of stock or fails in some way, you don’t have to fail your customers. Remember, it’s your reputation, not his, on the line.” Looking beyond eBay, tell that to Costco, a business known for its warehouse approach in retail. According to Hanks, seventy percent of what it sells online is drop shipped.

About 2426 days ago E-Commerce

Setting Up a Business on eBay

There are now 1.3 million people worldwide who have made a business out of selling on eBay, claiming eBay as their primary or secondary source of income, according to AC Nielson International, the New York-based market research firm. So as entrepreneurs consider launching a business on eBay, their first concern should be to figure out how to avoid getting lost in the crowd. eBay has been going strong since the online auction site was founded in 1995. That means others in the global online marketplace have already had 10 years to figure out how to make a business out of selling on eBay. “It’s definitely a challenge to start an eBay business right now,” says Sucharita Mulpuru, a senior analyst at Forrester Research, of Cambridge, Mass., “because you are coming late to the game.” The key, says Elizabeth Gaudio, senior executive counsel at the National Federation of Independent Business, is “research, research, research.” One way to do that, she adds, is to just start selling. There are several ways to sell on eBay. Once you register your business with the site and open a seller’s account, you may want to try some of the following methods. List an item for auction. Adam Galinsky, a professor of economics at The Kellogg School at the University of Pennsylvania, makes a case for setting your opening bid on the low end. Galinsky’s research shows that it entices more people to enter the auction. “Once  they’re in,” he says, “they’re trapped and emotionally invested into checking back and escalating their commitment.” Set a fixed price. The “buy it now” feature on eBay can be used as the sole method of pricing, or as an added option to an auction. Not everyone wants to keep checking back over a period of days to compete over the sale of a pair of socks. Open an eBay Store. You can sell in the auction format or fixed price method. Either way, having your own storefront will help you brand yourself with customers, and hopefully make them repeat customers. Some of the benefits of opening an eBay Store include that you can showcase your listings in a customizable Web format, boost sales with marketing tools and list for longer durations through your store inventory. The store costs $15.95 per month for a basic store, and $49.95 per month to be a featured store. eBay Express. This is relatively new. It’s a special area of eBay’s site that functions more like a traditional ecommerce site, without the auction format. Sellers have to meet certain criteria, like a high positive customer feedback score, before they can participate. It’s like selling on eBay.com but the exception is that payments are made at the point of purchase so sellers don’t have unpaid items while waiting for bidders to forward payments. There is no additional charge to sell on eBay Express for established sellers. Given that eBay has been around for 10 years, there have already been studies about what sells and how to increase sales. In addition, the folks who have been successful running businesses on eBay have honed the art of making a profit this way and have some good advice. Here are some dos and don’ts to consider when setting up a business on eBay: Dos: Do include gallery pictures. These are the pictures that pop up by the listing in search results. For 35 cents, it’s money well spent because studies show that buyers are more likely to bid on purchases they can see. As for the other listing enhancements — everything from featuring your listing at the top of a search request to promotion boxes — they all come with a fee. “In most instances, they don’t improve your sales,” says Michael Miller, author of Making a Living with Your eBay Business. Do experiment. So says John Morgan, a professor of economics at the Haas Business School at University of California at Berkeley, who researches online auctioning. “Try selling your products in different categories,” Morgan says. “Alter the closing time and date for your auctions. Track what happens. You will see patterns emerge and can learn a lot from that.” Do treat it like a business. The most important piece of advice comes from Miller, who says that it’s important to remember that eBay isn’t just another weekend activity. “If you’re going to run a business on eBay, then treat it like a business — not a hobby,” he says. Don’ts: Don’t buy too much inventory. You can avoid this by using a drop shipper, which is a wholesaler that will ship and manage orders directly from their warehouse, even handling returns. Don’t play the trends. The eBay market is too volatile and changes too quickly. Those “Elmo TMX” dolls may be a hot item right now, but you don’t want to have to rework your business plan the day after Christmas. It’s better to find a line of products that work for you and stick with them. The experts at setting up businesses on eBay say that if you take the right steps and avoid the pitfalls, you’re business is not likely to get lost in that crowd of 1.3 million people who now make a living off of eBay.