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"Surviving and Thriving on eBay" by Silas Hart - How to establish yourself and make money.

Discussion in 'Ebay' started by scallen37, Jan 10, 2013.

  1. scallen37

    scallen37 Junior Member

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    This is a copy and paste made by my mentor Silas Hart that he posted on WarriorForum that he posted a couple days ago that was deleted for some unknown reason, but I copied it because it was good information that I personally use on eBay. Someone here PM'ed me about it so I thought I would repost it here.

    Welcome to the next section of thisguide. I have mostly designed this entire guide around people who arecompletely new to selling on eBay or online in general. At thispoint, you should be past your 90 days and eBay called you up todiscuss your selling goals. If you have already been selling on eBaythen I recommend watching this section to learn how to make yourincome on eBay more residual and increase your relationship with eBayand get to the Top Rated Seller status if you haven't already andsecure your Top Rated Status if you have and also secure yourDetailed Seller Ratings score.



    The Pros and Cons of thismethod:

    Pros:
    Great for maintaining TRS status to save 20%on fee's.
    Very easy to do and manage.
    You are likely toincrease your Detailed Seller Ratings.
    You can calculate yourprofits ahead of time.
    You don't need much money to get startedthis way.

    Cons:
    Does require some minimalinvestment.
    Best if you already have TRS status. (Not a dealbreaker if you don't.)
    Isn't going to make you filthy rich withinmonths.

    First of all... WHY USE THIS METHOD?

    Ebay is ata point where it no longer caters to small sellers. You can debatethis, but the fact is that eBay is moving towards being more likeAmazon and less like an international flea market. Ebay does cater tosellers who have a large amount of inventory and process severaltransactions a day as opposed to the average-Joe seller who mightsell 10 or maybe even 20 things a month. If you are one of these?Average Joe? sellers, which Most of eBay Sellers are, then youmight notice that you are subject to being penalized by the eBay DSRsystem and you lose out on money by not having the 20% off feediscount that Top Rated Sellers receive. Also, eBay puts a largeamount of emphasis on the eBay Feedback System and they use all threeof these things to determine the position of your eBay Listings inthe ?Best Match? rankings and which items are being promotedthrough the Cassini Search Algorithm that was set up a couple monthsago. If you have 50 positive feedback at 100%, you are treated verydifferently than someone who has 49 positive feedback at 98% eventhough the difference might only be 1 negative feedback that may ormay not have been deserved by a disgruntled buyer ? who might havegot angry because she thought the Ed Hardy shirt you sold her was aLarge although you clearly stated it was ?SMALL? 4 differenttimes in the listing (True story). The way you can counteract thesethings is by simply increasing your volume. This helps shield you inalmost every way as an eBay Seller unless you totally drop the balland decide to ship packages out to your customers 3 weeks after theypurchase them which is something you do Not want to do.

    Keepin mind, this is not something that is going to make you wealthy on a?per item? basis. Many people look at the profit of individualitems and say ?eh, that's not enough profit for me? and theymight be correct. On an individual item basis, the profit IS small.However, the ways in which you can benefit from doing things this waywill bring your eBay business to the next level and prolong yourexistence on eBay.

    Before I dive in and start showing youthings you can sell in volume, I want really emphasize that 80% ofyour eBay inventory SHOULD consist of these items. I use the 80-20rule a lot and it really prevails on eBay on all of my accounts. Thisis called the Pareto Principle. The minimal amount of profit derivedfrom the 80% of your inventory of items will allow you to cover youroverhead on eBay and will allow you to carry on with positive growthof your online business to allow you to make the real money from theother 20% of your inventory which will be much more profitable on anindividual item basis.


    To re-word this, if you sell 100 itemsa month, 80 of them are going to be small items that you might onlymake a .50 cent profit on. The other 20 items are going to be thingswith high profit margins but simply do not sell all of the time butwhen you do, you earn a bigger profit.

    A student once comparedthis to fast food (she was a McDonalds Assistant Manager looking tostart her own business) The profit from all of the items on theDollar Menu is small but many sell a day compared to the higherpriced meals which sell fewer a day. Even though the profit on a $1Cheeseburger might be small, there is still enough profit to carrythe business through it's daily operations while a bulk of the profitis actually made from the more expensive meals.


    What you can try to do with this methodis try to make it eas easy for yourself as possible. I wouldn't buysomething I could sell 500 of in a month for a 10 cent profit peritem, because I would either be paying more in labor or I would bespending more time packaging and shipping items and answeringquestions when you could have chose to make a .25 cent profit fromsomething you call sell 120 of each month.

    How this works.How this works is relatively simple and straightforward. You aregoing to go on eBay and look for sellers from Hong Kong, China,Singapore, Taiwan, you get the picture. A place where it is verylikely inexpensive goods are going to come from. Then you buy them inbulk from the cheapest seller and have them sent to you and then soldto your local customers.

    I start out at random. I justthought up of something I thought might be selling from China to U.S.Customers (U.S. Being where I am located for this)


    I went ahead and typed in ?PokemonHat? - The results will show ?Best Match? which is common, butwe want to see who is selling this for the cheapest price which ishow most people buy things on eBay. But Note: The highest result for?Best Match? for the keywords ?Pokemon Hat? show someone whohas sold 120 in the past month as a U.S. Seller. Obviously thesesells, and he might not even be the cheapest.

    78662316.jpg

    Change that from ?Best Match? to ?Price + Shipping:Lowest Price? and 9 times out of 10, it will be someone from Chinaor Hong Kong selling this item for the over all cheapest price oneBay.

    I scrolled down a bit to find the one I wanted whichwas the basic red and white Pokemon Hat.

    The next 10 sellerswere of course, from China.

    55467406.jpg

    Example 1 isthe Cheapest.

    Example 2 is the 2[SUP]nd[/SUP] Most Cheapestseller for this item.

    Most of the time, you will just buyfrom the cheapest seller. Such as Example 1. You can actually make alist of 3 or 4 sellers and have them do some light haggling todetermine who will actually be the cheapest seller. Once we figureout how many we want to buy based on how many sell locally, you willsend an offer to purchase X amount from that seller. Sometimes,Seller 2 or 3, or ever Seller 4 might be the one willing to negotiatea lower price if you buy a large amount from them which I will touchon more in a little bit.

    As you can see, the lost price forExample 1 is $4.35 USD Here is the actual listing:http://www.ebay.com/itm/POKEMON-ASH-KETCHUM-CAP-EMBROIDERED-Hat-NEW-/121010133995


    Now you need to figure out 4 moreimportant things. What this sells for Locally ? which means, howmuch this will sell for being sold by someone within your owncountry. (The U.S. for example.) - Your actual profit after fees at anon-negotiated price (which means you haven't haggled with theChinese Seller yet), if it is an ePacket Item which means it issmall, weighs less than 16oz, and roughly how many will sell in a 1month time frame from a Local Seller.

    Go into anotherwindow/tab and go back to eBay and click on ?Advanced? in theupper right hand corner.
    http://www.ebay.com/sch/ebayadvsearch/?rt=nc


    Type in ?Pokemon Hat?

    Scrolldown and click on ?Buy it Now? and then go down a little furtherand click on ?Only Show Items: Located in: United States?

    38651266.jpg

    This will only show the item(s) that match thesekeywords that are currently being sold as a ?Buy it Now? fromU.S. Sellers.

    I had to scroll past a bunch of items that werenot the same and I finally came to the same item being sold by theU.S. Seller that showed up as Best Match previously.

    The pricehe is selling this for is $8.59 + $2.30 ? but his actual totalprice is $10.89. If I can make a profit from this if I sell it for 1cent cheaper, I'll continue on with my research of this product tofigure out how many to buy.


    As it stands right now, I can buy thisfrom China for $4.35 USD and sell it for $10.89. There is an obviousdifference there, so now I have to calculate fees for this item, andalso domestic shipping in the U.S. Which is a bit tricky. Becausethis is an ePacket from the China Seller, I know it doesn't weighmuch so I am going to assume it weighs about 5oz, which is about$2.10 by First Class Mail when I print my own shipping labels outthrough PayPal.

    If you head on over to a eBay/PayPal Fee'sCalculator Tool: http://www.rolbecalc.com/We can figure out how much we might make in profit so go ahead andenter the details, and for me because I am a TRS, this is going tomake $2.35 in profit. This is a simple Fixed Price listing which isthe lazy method of selling high quantities of an item as opposed toselling in small batches of 3 Day Fixed Price Listings, Auctionsstarting at
    $10.87 with Free Shipping which will result in aslightly higher profit. Although $2.35 in profit is actually reallygood for a high volume item, I am going to try to get it a littlehigher because I'm buying in bulk. But first I need to figure out howmany I can sell in a 1 month time frame.


    If you go back to eBay Advancedhttp://www.ebay.com/sch/ebayadvsearch/?rt=nc

    Donot enter ?Buy it Now?
    Click on ?Only Show Items: Locatedin: United States?
    Show Completed Listings

    Which broughtmehere:
    http://www.ebay.com/sch/i.html?_sad...&_fsct=&_nkw=Pokemon+Hat&LH_LocatedIn=1&rt=nc

    Youcan either manually count which ones of the same exact item has soldsince 30 days ago, or you can use something like Terapeak. I wentahead and counted it and seen that 149 of these sold last month.


    Because I plan on being the absolutecheapest seller for this item, I know I'm going to make at least 70%of the same amount of sales (sometimes, I make between 95% and 99%)and because I'm looking at selling more than one type of item so thatmy items are diversified and I don't invest my money into 1 type ofitem, I am only going to buy a 1 month supply of inventory for thisitem. If you make a purchase of these items a 2[SUP]nd[/SUP] time, Iwould recommend purchasing a 2 month or 3 month supply so that as yousell your items, you can order more and simply adjust your listings'item quantity. Because 149 of these sold last month, I'm going to buy70% of that to resell which means I am going to purchase 104 ofthese.

    As it stands right now (non-TRSdiscount):

    Investment: $452.4
    Return: $1131.52
    ProfitAfter Fees: $244.40
    ---------------------------------

    So,that's not a bad profit. However, because you ARE buying 104 you canprobably get a good profit.

    Contact the list of ChineseSellers.

    Your first message should be something along thelines of:

    Hello, Iwant to buy 104 (Copy and Paste Title of eBay Listing)

    Waitto see if they confirm that they can buy that many. If they say?Yes?

    Offer the seller 66% of the total price. Becausethey are paying about 20% in Fees. In this case, I would offer them$298.32. I don't expect them to say yes, but they will probably starthaggling.

    My 2[SUP]nd[/SUP] Response should look likethis:

    Will you send me 104 Hats for $298.32 I will pay youdirectly so you do not have to pay fees.


    You want to make it a point that theywon't have to pay eBay fees if you send them I direct PayPal payment.They will most likely say no because you are asking for something for2/3rds of its original price. If they counter or say no, really tryto get the items for 80% of the total cost. If they say no again, say?You are paying 25% in fees for this item, you are making moremoney by shipping to me? - which they are, especially because theyare shipping to you in bulk. Say you are a business and want toresell their products locally and plan on doing business long termwith them. I usually get things in bulk for 70% to 80% of the price.After you make the purchase, ask if they can send each item in itsown bag, envelope, or mailer. They can still send in bulk this wayand saves you a lot of time and effort from having to individuallypackage these items for shipment when they sell.

    Lets assumethe seller gave me 80% off, lets readjust the pricing to determineour profit as a non-TRS.

    Individual item cost:$3.48
    Investment: $361.92
    Return: $1131.52
    Profit AfterFees: $309.92

    Again, this is pretty good. You'll have all ofthese items sold within 3-5 weeks, you'll have an extra 60-100positive feedback if you ship out quickly. This Investment/Profitratio isn't always good, sometimes its more, sometimes it's less.


    Now what you can do is also do this onAmazon where prices are much differently and where you might profiton each item on eBay you might actually lose money on Amazon.




    Most of my eBay accounts hold about$10,000 each in funds invested in rotating inventory that is boughtand sold in this exact same way. Most we're built up from a $1,000investment I made per account and simply kept reinvesting. With eachaccount that has this amount invested in rotating ?Low Profit/HighVolume? items, brings me about $7500 a month in profit notincluding other things I sell on eBay as High Profit/Low Volume (suchas things I buy for $10 and sell for $60 in profit 3 or 4 times amonth per item). At such a high volume, I can pay my employees thatreceive and send out packages, and also another employee whose soleresponsibility is to find these items and analyze data and buyitems.
     
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  2. snorlax

    snorlax Newbie

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    I'm pretty sure that this is not true. This forum as loads of examples of people claiming they're cheaper, yet their competitors are higher up the ranking.
     
  3. scallen37

    scallen37 Junior Member

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    What you quoted wasn't explained enough by the guy who wrote it. Because I implement his methods, I have a bit more information on what wasn't explained more clearly.

    When you are selling an item on eBay and you are selling an item on a local market, which means you are only selling to people within your own country as you will only ship to others in your own country... if you sell an item at the cheapest price which means your item shows up at the top of "Price + Shipping: Lowest First" - you will capture 70% of the sales of users who are looking to buy locally and not from China/Hong Kong. 79% of sales for Fixed Price Listings on eBay are purchased from sellers who are selling the item for the cheapest price. On Amazon this is 96%

    So, lets say someone in China is selling a Superman Coffee Mug for the absolutely lowest shipping price + shipping - and they are shipping worldwide. They might have 1000 sales.

    Someone in the U.S. has the same exact mugs, and his price is slightly higher than the Chinese seller, but as far as being cheap goes... no other person in the U.S. that only ships to buyers in the U.S. sells the same Superman Mug cheaper than he does. Out of the group of people only looking to buy a Superman Mug from a seller in the U.S., he will make 70% of the sales among this group of potential buyers. If you find out 100 Superman Mugs have been bought/sold from a U.S. Seller to a U.S. Buyer, it is very likely that at least 70 of those 100 sales have been by said U.S. Seller.
     
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    Last edited: Jan 14, 2013
  4. Cfuturistic

    Cfuturistic Registered Member

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    Thanks for the post was a great read!
     
  5. waynes

    waynes Newbie

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    Thank you for the idea
     
  6. anirome1

    anirome1 Newbie

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    im going to read this one., thanks mate
     
  7. Bestbuyfoam

    Bestbuyfoam Jr. VIP Jr. VIP Premium Member

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    I'll have to take a closer read when I have some more time...
     
  8. K. Skellington

    K. Skellington Newbie

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    Good info.
     
  9. ArtVandelay

    ArtVandelay Power Member

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    I really like this one. Some things are a little unclear, but I understand that this guide is second-hand, so I don't blame you.
    I'd love to have a Skype conversation with you if you're up to it.
    PM me if you're willing. It would be much appreciated!