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More
money: good. Less money: bad. It's pretty simple, right? Well,
easier said than done. When it comes to improving the
profitability of any business--whether it's an online auction
enterprise, a comic book store, or a car dealership--we could
all use advice and ideas on how to reap more profits and cut
back on losses. Read on for information on how to save money and
improve the profitability of your online auction business.
Step
Back
First, step back and take a hard look at your online auction
activities. How much are you spending each month? How much are
you making each month? How successful are your sales? What are
your best sources of inventory? Which auction sites work the
best for you? When you relist, do you get bids or not? Do your
auctions generate more bidding when they close in the evening or
morning?
Before trying to improve your
profitability, you'll need to fully access your methods and
mechanisms. Of course, it's good to do this periodically anyway,
but an in-depth re-evaluation and reckoning is especially
beneficial if you're looking for ways to reduce your costs and
boost your profits. Have a grounded sense of what you've been
doing in the past so you can improve in the future.
Time
Is Money
It's easy to let time slip away and not keep track of how many
hours you devote to your online auction sales, especially if
you're working at home and selling online full time. After all,
there's no boss and no time clock to punch. So who's keeping
track? Well, you should, that's who. If you're not
diligent about maintaining tabs on the hours that go into your
selling, you very easily can find yourself floundering and
spending too much time being unproductive when you should focus
on being productive. It might help to devise a daily schedule,
in which you designate specific tasks for specific times. (Write
descriptions from 10 a.m. to 11 a.m.; leave feedback from 11
a.m. to 12:30 p.m.; and so on.)
Here's a great piece of advice from AW
member stockticker: "One of my best tips: Put a value on
your time and remember that the amount of time you have to spend
on auction activities is finite." So ask yourself: What are
the activities that earn you the most profit (listing items,
seeking out new sources for inventory), and what are the
activities that earn you little or no profit (repeated trips to
the post office, retyping auction descriptions or end-of-auction
emails)? Try to eliminate the big time wasters that cut into
your time--and thus your money. Besides the reducing the
aforementioned multiple trips to the post office, you also
should consider using some kind of auction software, which will
help you track, better organize, and more efficiently manage
your auction activities. For more information, see our Timesaving
Strategies tip.
Create
Your Own Walden Pond
Online sellers should take heed of Henry David Thoreau's
timeless advice: simplify. And simplifying your methods will
lead to increased efficiency. Here are a few strategies to
consider:
Rely on one universal username and one
universal password whenever you register on a site (there's
nothing worse than hunting around for passwords).
-
Standardize shipping as best you
can.
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Designate certain days and times
for certain tasks (see above).
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Computerize your records (although
you still should keep hard copies of some of your records,
avoid the paper avalanche).
-
Use templates (for end-of-auction
emails, auction descriptions, etc.), so you don't have to
repeatedly type new documents.
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Put up an About Me-style page
(many sellers say this little personal touch helps elicit
more bids, particularly from hesitant or newbie buyers).
Listing
Advice
Some sellers say it's simple: In order to be more profitable,
you'll need to list more merchandise. And they're right: More
listings potentially can equal more sales. But that's just one
approach. Alternately, you also might consider cutting back your
listings and being more selective with your merchandise,
targeting specific buyers and exploring different categories.
Remember, if you list and list and list, those listing fees can
add up. Also, don't repeatedly (and blindly) relist. If your
initial auction doesn't sell, it's OK to relist again (also, you
might want to try a different category, a new title, a new
description, and so on); however, if an item doesn't sell the
second or third time around, it's probably best to call it a day
and wait a while until the market is more receptive.
Free
Ride
Remember when your parents told you there was no such thing as a
free lunch? Well, that might be true for the most part, but
there are few things that are free and that will help you reduce
your online auction expenses:
USPS Priority Mail Boxes: The
good old United States Post Office will provide you with free
Priority Mail boxes, as well as tape and preprinted labels. It's
a great deal that should be taken advantage of. But make sure a
Priority Mail box is the right box for the job. "Free"
doesn't necessarily mean "appropriate." Don't use the
boxes for items that are too small or too big.
Sites: You'll have to pay to
use the majority of online auction sites. However, some online
auction venues, such as Auctions.com, edeal, boxLot, and some
FairMarket-affiliated sites, do not charge listing fees. Yahoo
Auctions, on the other hand, is completely free: It does not
charge listing or commission fees.
ISPs: In addition to free
auction sites, there are several free Internet Service Providers
out there, such as NetZero, FreeWorld, WorldSpy, and others. The
downside: You'll have to content with an influx of advertising
(targeted banners, ad windows, scrolling messages, and so on)
while online. Plus, some users complain that the connect speeds
of free ISPs aren't always, well, up to speed. But hey--free is
free.
Shop
Around
If you're not interested in taking a chance on a free Internet
Service Provider, you still might consider looking for a
lower-priced ISP. Also of note, if you're in the market for a
new computer: Some computer manufacturers, such as Gateway and
Dell, also include a year's worth of free Internet service when
you purchase a computer.
Moreover, do some comparison shopping
for your other online auction needs, such as office equipment,
shipping supplies, labels, and so on. You might find that you
could be getting better deals, and thus save some cash.
Bulk
Buying
Buy wholesale and in large quantities if you can. This goes for
your inventory, as well as for your online auction-related
supplies such as labels, envelopes, tape, etc.
Encourage
Repeat Business
A happy, satisfied customer is a customer who likely will place
a bid on one of your items again. You greatly improve your
chances for future profits by taking care of your current
customer. Offer repeat customers incentives such as free
shipping, or include an extra treat with the purchased item.
It's those kinds of things that will endear you to buyers and
make them seek out your auctions the next time they're browsing
on their favorite auction site.
Write
It Off
Last but not least, if you're selling online full time, there
are certain things you can write off as deductions, such as
final value fees, postage, shipping materials, and perhaps even
your monthly ISP charge. For more information, see our Reporting
Auction Income tip
Back to Auction tips &
tactics
by Vendio Services
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