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Friday, May 27, 2005

Going, Going, Gone: Selling at Online Auctions

If you are looking for an inexpensive way to start a business or a means to
boost sales of your existing business, try online auctions! Many small
business owners and home-based entrepreneurs have discovered online
marketplaces as their primary or alternate sales channel.

Internet auctions like eBay, Yahoo! Auctions, and Amazon.com Auctions,
can bring substantial benefits to your business. Attracting tens of
thousands of buyers, auctions can help you increase sales, liquidate excess
inventory, and acquire new customers cost-effectively. With basic listings
as low as $0.10 to $0.90 for more bells and whistles, auctions are a cheap
way to get new customers and increase your website's visibility.

Success Factors

Selling at auctions, however, is a different ball game compared with the
traditional techniques of selling. To get the sales, you must employ the
following factors:

1. Suitability
of product for auction
.
Some items seem to inexplicably sell better or worse than others. Those that
sell well include collectibles, electronics, and items with narrow but
intensive appeal. As auctions attract more buyers and sellers, even
commonplace items such as used clothes; vacuum and cookware are finding
audiences in auctions. Bulk items (referred to as "lots") of
books, clothes, scrapbooking materials, and software also generate active
biddings.



2. Presentation
of the Item.
The success
of your auction will greatly hinge on how well you present your product,
particularly your title, description and page layout. With thousands of
items listed in most categories, a good title with searchable keywords
ensures that your item can generate the eyeballs that it needs. To get the
sales, however, you must have an easily read description of your product.
The more comprehensive and descriptive, the better. The advanced
technological capabilities available to us have given rise to a more
demanding consumer who now expects sellers to present all information
available. Buyers at auctions put a premium on the accuracy of your
description, so mention any cracks or discoloration in your product, lest
you be accused of misrepresenting the item.

A good quality (and original) picture is also a factor in increasing your
chances of selling your item. The study "What Factors Drive Final Price
in Internet Auctions? An Empirical Assessment of Coin Transactions on eBay"
by Charles A. Wood, Assistant Professor of Management at the University of
Notre Dame found that items for sale with accompanying descriptive
photographs tend to sell at a price that is 11.3 percent higher than similar
items without pictures.



3. Seller
Experience and Reputation.

The researchers further identified what they call a reputation score effect,
where sellers with higher reputation scores, derived from previous buyer
feedback, sell items at a price premium 6.8 percent higher than sellers with
lower reputation scores.

New sellers with zero feedback oftentimes find it hard to move their
products, even at very attractive prices (think $0.01 as starting bid!).
Experts suggest that new sellers should first get their feet wet at auction
trading, by buying items from experienced sellers to learn the selling
process involved, particularly fulfillment and delivery. By buying items,
new sellers can accumulate feedback and begin establishing their credibility
in the online marketplace.

4. Clear Terms
of Sale
. Auction buyers
expect to see all terms of sale, including the total shipping cost, method
of shipping, all payments accepted listed, how soon you expect bidder to
contact you & when payment is expected. Clearly indicate in your listing
when you ship your items (next business day after payment is received or
until after the check clears). The more detailed your terms of sale, the
greater the chances of moving your products.

5. Length of
the bidding.
Auctions that
last longer tend to attract more bidders. EBay currently offers auctions
from 3-7 days for free, and charges an additional $0.10 for a 10-day
listing. Experiment how your product performs, and how quickly (or slow) it
attracts bidders. Unique, one-of-a-kind products may benefit more from
longer listings, while common products with established auction buyers may
be able to attract bidders even for a short listing period.

About the Author:

George Rodriguez is a writer for Power Homebiz Guides. For a step-by-step
guide to starting a business, order the CD-Rom "Power Home Business
Ideas" from PowerHomeBiz.com at http://www.powerhomebiz.com/Index/powercd.htm

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