Extra Income : Online Auctions
An auction is a public sale in which property or items of merchandise are sold to the highest bidder. This method of marketing has been around for centuries because it works. Roman soldiers were known to auction off the booty they acquired in wars. And auctions have always been popular in certain areas, like art, with legendary houses like Sotheby’s and Christie’s. Livestock is generally sold through auctions, and recently certain kinds of financial securities have also been sold through auctions. Nowadays, billions of dollars of personal and corporate assets are sold each year at public auction. The auction method provides advantages not found in other marketing and sales methods, in particular because it accelerates the sale by generating additional consumer interest and activity.
Online auctions, which are increasingly popular, are held on the Internet. The rules and players are a little different from what they were. First of all, online auctions eliminate the need for sellers and buyers to meet in a specific place on a specific date. In addition, Internet auction websites give buyers a “virtual” flea market with new and used merchandise from around the world; they give sellers a global storefront from which to market their goods. As a result, online auction website are handling more business than ever, and these days it’s no longer surprising to hear about people quitting their jobs to be involved in online auctions full-time. According to Meg Whitman’s keynote (she’s the CEO of eBay), at the 2006 eBay Developer Conference, 1.3 million people make their living selling full-time on eBay. And some of them are making a six figure income in the process. But for those looking for extra income, there’s no need to quit your job to do this full time. You can do online auctions part time and still pull a decent income (a few hundred dollars a month).
How can you do it? The most important thing is to ignore those late night seller infomercials. They are not worth your time and certainly not worth your money. If you want to know how to make money with eBay, the first step is to find something to sell that you personally enjoy or even better love. Passion translates into knowledge of the product and you will be better equipped to both buy AND sell at the right price to make sure you turn a profit. The next step is tons of research (personal finance websites are a good starting point to determine what you’ll need and what costs to expect). Many items you think are worth a lot of money will turn out to be worthless and vice versa. So research is a key to success. It is in fact the most important step.
The next logical question is: where do you find inventory? The answer for most beginners is your garage, attic, and basement. You have things that are collecting dust in these places because you no longer use them. You will be surprised at the number of people in the global community that want those things. Auction websites themselves are a great source for product. Look for things that don’t have the most important pieces of information in the title (which brings us back to knowledge of the product). Another thing to look for is bulk lots of items. Look for lots where you can break the purchase up for sale as either smaller lots or individually for money. Many sellers don’t want to take the time to take picture/inspect and describe every item in a big purchase so they will just sell a huge lot to clear the space. Another great way to get inventory is believe it or not at your local department store. Bring a notebook next time you go and write a description and the price of items on clearance. Many things that are on clearance in your area are not elsewhere in the country.
At this stage, I could start talking about getting the best price, determining the best time to put up your listings, finding the right keywords, cross-promoting, specializing, but if you’ve been picking up items from free and/or inexpensive sources, you can afford to jump right in and learn as you go. I will offer a more in-depth post in the near-future, for now we’re just getting our feet wet. So let’s focus on the item descriptions and where they can be sold.
You should definitely write a good description listing the strengths and flaws of your item. Take pictures and post them in the description. Make sure that your picture is clear. People need to see what they are buying. Describe your item accurately, but also don’t over describe it. Obviously some items will require long descriptions but remember, Keep It Simple.
Here’s a short list of websites where you can sell your stuff:
eBay  |
eBay is the largest, most well known, organized and comprehensive online auction service available. Often it is the first place people go when shopping for auction products. There isn’t much you can’t find on eBay. Although its fees are higher than that of the competition, it also has the highest exposure and membership. |
| Overstock.com |
Overstock.com is an excellent alternative to eBay. It includes many of the same features and provides you with the safety and security of using a well–known company to host or buy at online auction. |
| Bidz.com |
If you are looking for diamonds, gemstones, watches and similar luxury jewelry at bargain basement prices, look no further than BidZ.com. They have currently molded their site into a unique form of online commerce; their luxury market specialization, 3 minute auctions and consistency in playing the bidding game their way has made them a great place to shop and sell. |
| Amazon | Amazon is one of the most easily recognized names on the internet, and has a loyal following. However, they are still cutting their teeth in the online auction business and could be a major contender if they reorganized their layout, included more item photos and user options. |
Before you jump in, I’ve copied and pasted this Tips For Sellers section from the Federal Trade Commission’s Internet Auctions A Guide for Buyers and Sellers. It’s a very good resource and might come in handy.
Tips for Sellers…
Know Your Legal Obligations
Under federal law, you’re required to advertise your product or service and the terms of the sale honestly and accurately. You can’t place “shill” bids on your item to boost the price or offer false testimonials about yourself in the comment section of Internet auction sites.
You’re prohibited from auctioning illegal goods; some auction sites have further prohibitions on sales of other items. While many auction sites monitor to ensure that illegal items are not being offered, the responsibility for ensuring that a sale is legal rests with the seller and buyer. Some auction sites post a list of prohibited items.
You are required to ship merchandise within the time frame specified during the auction, or within 30 days, if a time frame is not specified. If you can’t meet the shipping commitment, you must give the buyer an opportunity to agree to the new shipping date or cancel the order for a full refund. To learn more about your responsibilities when shipping products, see A Business Guide to the Federal Trade Commission’s Mail or Telephone Order Merchandise Rule.
Advertising Your Product
* When describing your item and its condition, state whether it’s new, used, or reconditioned.
* Anticipate questions buyers might have and address them in the description of your item or service.
* When possible, include a photograph of the item. There’s much truth to the saying that “a picture is worth a thousand words.”
* Specify the minimum bid you’re willing to accept.
* Specify who will pay for shipping, and whether you’ll ship internationally.
* State your return policy, including who’s responsible for paying shipping costs or restocking fees if the item is returned.
* Let prospective bidders know whether you provide follow-up service; if you don’t, tell them where they can get it.
Dealing with Bidders
* Respond as quickly as possible to bidders’ questions about the item you’re auctioning or the terms of the sale.
* When the auction closes, print all information about the transaction, including the buyer’s identification; a description of the item; and the date, time, and price of the bid. Save a copy of every email you send and receive from the auction site or the successful bidder.
* Contact the successful buyer as soon after the auction closes as possible; confirm the final cost, including shipping charges, and tell the buyer where to send payment.
Arranging for Payment
* If you accept credit card payments from the buyer directly, bill the credit card account only after you’ve shipped the product.
* If a buyer insists on using a particular escrow or online payment service that you’ve never heard of, check it out by visiting its website or calling its customer service line. If there isn’t one, or if you call and can’t reach someone, don’t use the service. If the service claims to be affiliated with a government agency, that’s a sign of a scam.
* Before agreeing to use an online payment or escrow service, read the terms of agreement. If it’s an online payment service, find out who pays for credit card charge backs or transaction reversal requests if the buyer seeks them.
* Examine the service’s privacy policy and security measures. Never disclose financial or personal information unless you know why it’s being collected, how it will be used, and how it will be safeguarded.
* Don’t use an online escrow service that does not process its own transactions, but that requires you to set up accounts with online payment services. Legitimate escrow services never do this.
* Check with the Better Business Bureau, state attorney general or consumer protection agency — where you live and where the online payment or escrow service is based — to see whether any unresolved complaints are on file against the service. But remember that a lack of complaints doesn’t guarantee that the service has no problems.
Look Out for Fraudulent Checks or Money Orders
Sometimes, your bank may not alert you that a fake check or money order has been returned until after you have shipped the merchandise. If you are suspicious about a check because it is written by a third party or for any other reason, call the person who wrote the check to verify that they have authorized it. If you receive a check or money order for an amount that exceeds the successful bid, and the buyer asks that you wire the excess funds back to him or to a third party, do not wire the money. Instead, return the check to the buyer, and do not ship the merchandise.
If you accept payment by check, ask for a check drawn on a local bank, or a bank with a local branch. That way, you can make a personal visit to make sure the check is valid. If that’s not possible, call the bank the check was drawn from and ask if it is valid. Get the bank’s phone number from directory assistance or an Internet site that you know and trust, not from the person who gave you the check.
For Buyers and Sellers…
Where to Turn for Help
If you have problems during a transaction, try to work them out directly with the seller, buyer, or site operator. If that doesn’t work, file a complaint with:
* the attorney general’s office in your state.
* your county or state consumer protection agency. Check the blue pages of the phone book under county and state government.
* the Better Business Bureau.
* the Federal Trade Commission. File a complaint online at ftc.gov
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
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