Here we go with part 2 in the series. When I last left off, I was discussing how to figure out what you want to sell on eBay. This can be quite a challenge. Brian Balfour, a fellow collegiate entrepreneur and blogger (http://www.brianbalfour.com), has given some insight to this. His suggestions- use services such as Andale and Alibaba. Both can be used as research tools and ways to find products you want to sell at wholesale prices.
I had asked Brian to contribute his thoughts and input on the subject of researching products and about his use of the above mentioned services. So, without a further a do, here is what Brian has to share.
Hey Everyone. My name is Brian Balfour and I am a young entrepreneur located in Chicago, IL. IÃ¢â‚¬â„¢d like to thank Chris for having me as a guest writer on his blog. If you would like more information about myself or my projects you can check out my blog about entrepreneurship at http://www.brianbalfour.com, or my blog about social networking at http://www.socialdegree.com. I am also working on new project that I am very excited about at http://www.Fanlete.com, so make sure to keep an eye out.
If you would like to ask me questions about the following post on using Andale.com and Alibaba.com in your Ebay selling ventures, write in the comments section of this post and I will be sure to answer.
Andale Research Tools
While Andale has a wide arrange of Ebay selling tools, their most useful one is their product research tool. At a very modest $8 a month, you are allowed to do research on an unlimited number of products. Type in the product you want to research, such as MenÃ¢â‚¬â„¢s Wallets, and Andale will spit out valuable pieces of information. The key pieces of information that you want to note are:
-Average Selling Price
-Items Listed vs. Items Sold
-Success Rate (What percent of the time did the item sell)
When looking at these numbers you want to find a product that has a high average selling price compared to your cost, a high volume in items listed, and a high success rate. Typically a success rate between 30% – 40% is pretty good and anything above 40% is very good.
Your research shouldnÃ¢â‚¬â„¢t stop here though. Sometimes a low item volume is a good sign. It could indicate that there is a niche that isnÃ¢â‚¬â„¢t being filled. The only way to find out if this is true is to test the market by listing one of your sample products.
Furthermore, make sure to research various online retailers for your product via Google. These online retailers may not be selling on Ebay, but are still going to be your competitors. If there are a lot of online retailers selling your product pay special attention to the price that you are charging. If you wonÃ¢â‚¬â„¢t be able to beat them on price, then stay away because the market is likely saturated. If you canÃ¢â‚¬â„¢t find online stores that sell your product then once again you may have found a golden niche. But before you jump in, honestly ask yourself, Ã¢â‚¬Å“Is no one selling my product online for a reason, or is it truly an overlooked niche?Ã¢â‚¬Â
Once you find a quality product, Andale can take your research even a step further. Based on the highest success rate and selling price, Andale will tell you the best day and time to list your product, category to list it under, how long to run the auction, listing price, and terms of the auction. Use these guidelines because it could be the difference that lifts you above other sellers.
Alibaba.com is basically the Google of Asian manufacturers. You can usually find multiple manufacturers for any product you are interested in. Once you find a group of manufacturers that offer your product, Alibaba has a special tool that allows you to email them all at once through their site. This saves a lot of time considering you usually will have around 10 manufacturers to email. When sending a message, list a company name (even if you have to make it up), email, phone number, and shipping address. A lot of the manufacturers wonÃ¢â‚¬â„¢t take the time to talk to someone that they donÃ¢â‚¬â„¢t think is serious.
When communicating with a manufacturer ask for their price list, minimum order quantities/policies, sample product policies, and shipping procedures. Once you find some products that you like, at a price you can afford, ask for a sample. Depending on the manufacturer the sample can be completely free or you may have to pay for shipping. Paying the shipping is worth it to check the quality of the product. In addition you should be able to recover your costs by running a test sale on Ebay.
One of the barriers in using over seas manufacturers is usually a high minimum order quantity. These will vary greatly depending on the company and could be your deciding factor. Your goal is to find one with a low minimum order quantity in order to reduce your initial up front cost. Usually these quantities are negotiable. A strategy that often works is to ask to reduce the minimum quantity by 50% on your first order as a Ã¢â‚¬Å“test run,Ã¢â‚¬Â and follow up by saying if the first order meets your expectations many more will follow. Also ask if the manufacturer is willing to accept a slightly higher per unit price on the product for a lower order quantity. Some times the higher per unit price will be worth willing to pay for a lower order quantity.
Be careful as people have been known to fall for scams on Alibaba.com. It is the risk you run by looking for an over seas manufacturer. To reduce this risk I recommend only buying from manufacturers that are listed as Ã¢â‚¬Å“Gold SuppliersÃ¢â‚¬Â, have a Ã¢â‚¬Å“Trust PassÃ¢â‚¬Â, and have been on Alibaba for more then one year. Never send personal information such as you bank account or social security number. In addition, never place an order without seeing an exact sample of the product you will be buying.