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by
Dennis Prince
Though
many sellers feel they are at the mercy of auction venues and
the expenses that come with doing business there, it might be
comforting to know that many auction-related costs can be
reduced and managed with a bit of foresight and careful
planning. If you feel your profits are starting to slip away,
consider these tips about the fees you pay and how to keep them
under control to the benefit of your business' bottom line.
The
Fees That You Need
Be realistic--you will pay some sort of listing fee if
you intend to sell at a decent site and with the aid of decent
tools. The free auction sites (there are few to be found these
days; even Yahoo Auctions started charging listing fees) often
don't have the necessary number of bidders that will translate
into the level of sales you likely seek. Running auctions at
sites with little traffic and few bids might save you a few
bucks in listing fees, but in the end it might cost you far more
in lost opportunity and time wasted.
And while many argue
that fee-based sites are getting rich because of their tariffs,
the money you pay provides the needed capital to fund useful
features, infrastructure, and user services and tools. As the
venues grow, they need to reinvest to ensure they can satisfy
the needs and wants of the more sophisticated online seller. The
listing and usage fees wind up being a small price to pay for
the ability to list, sell, and collect at active sites, while
advanced methods and tools will save you time, effort, and, yes,
money in the long run.
Little
Pluses = Big Minuses
But there is a lot of fluff out there and you can
cut costs by carefully selecting which features and services
you'll use in your listings. In fact, after doing some research
and investigating, you might find that although some adornments
and extras add plenty of eye-candy, they also might offer little
true return on the investment.
Cast a frugal eye on
these questionable, and often costly, listing enhancements:
Title Enhancements:
Be it bold, highlighted, or whatever, few bidders really pay
much attention to the visual style of your item's title. Save a
buck and make conservative use of capital lettering (not
exclusively, though) to highlight the key element of your title.
Make sure you use plenty of good "hit words" since
most items are found via keyword searches.
Special Icons:
Whether it's a birthday cake, a Christmas tree, or a
firecracker, when it comes to added title icons…who cares?
When did you last leap at an item because of the cutesy little
GIF that accompanied it? Again, save the buck.
Home Page Featured
Placement: This is one of the most expensive listing options
out there and, unless you've got an item that will gain you
thousands of dollars in high bids or if you're continually
selling a product in volume, it's best to bypass this one if
you're trying to cut costs. Again, it's typically the keywords
that get noticed, not the site real estate where your item is
listed. Also, some auction sites allow you to bid for featured
placement on category pages, which is a much better value.
Cross-Category
Listing: This is a newer feature you'll find, and the jury's
still out whether the double fee you'll pay ultimately will pay
off. However, didn't you do just as well listing in the category
where most similar items were to be found? If so, why change
your strategy now and why pay twice the fees?
Choosy
Sellers Choose Fees Wisely
Of course, this isn't to say that all fees are inherently
evil and detrimental to your eventual profit. Just as it makes
perfect sense to pay reasonable fees for site and service usage,
it's just as prudent to occasionally make use of features and
enhancements when the situation calls for it. For example:
Reserve Prices:
You may hate to pay the reserve surcharge, but do the math
between putting a $200 reserve price on your item versus listing
it with an opening bid of $200. At eBay, you'll find listing an
item with a $9.99 opening bid and a reserve of $200 costs $1.30.
If you opt for the opening bid of $200, sans reserve, the same
listing will cost you $3.30. But don't be penny-wise and
pound-foolish: If you need the reserve to protect you from
losing on your investment, then by all means use it.
Opening Bids: Of
course, if current demand for your item easily will gain you
your target price without the use of a reserve, then list in the
lowest fee bracket and let the bidders work their magic.
Relisting: Well,
it's typically free (at eBay, you're refunded listing fees if
you get a sale), and the benefit is that you can make changes to
the item title, description, and category to find your buyer on
the site's dime. Take advantage of that.
Online Payment:
Some sellers might not be happy that fees are levied by online
payment sites, but remember that buyers who can pay with credit
cards (via services like PayPal and Billpoint) will invariably
spend more than if they must surrender their cash on hand. If
your items sell at good prices, make it easier for your buyers
to pay by offering the online payment opportunity, then collect
their higher bids at the relatively low cost to you. (Some
sellers even go so far as to insist that if a buyer wants to pay
through an online payment service, then he or she--and the not
seller--will have to fork over the necessary fees. Obviously,
such a practice will cause some bidders to say thanks but no
thanks. It's also against eBay's rules.)
No
Sale and Additional Opportunities
Just when you thought sniping was the reigning king of online
auction controversy, along comes "fee avoidance," the
frowned-upon act of manipulating auctions and luring bidders off
the venue to make a sale without paying site fees and
commissions. But just as the venues are in the business of
making money, well, so are you. Read the site's terms of service
carefully on this issue; however, to date there's still no
infraction assessed if you're contacted by a buyer who inquires
about an item that fails to meet the reserve or possibly asks if
you have more of the same to sell. It's a fine line, though: If
the seller initiates offline transactions or additional sales, a
swift site warning could be forthcoming, as well as possible
suspension since such actions are considered acts of fee
avoidance.
But keep this in
mind: In the interest of your sales and overall
profit-to-cost ratio, be sure buyers easily can contact you
(provide an email or Web site link in your item description) to
assist them with any inquiries they may have, informational or
otherwise. If they initiate a potential transaction, then that's
just simply good for business and could save you some operating
costs in the process. And, if you're operating your business
well and faithfully serving the customers you attract, buyers
might elect to deal with you directly--and any savvy
businessperson will assert it's much cheaper to keep the
customers you already have, any day of the week.
Back to Auction tips &
tactics
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