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Feedback

eBay has a unique feedback system, allowing buyers and sellers to post comments and feedback on their recent auction experience. Each transaction allows you to give a single rating to your trading partner – positive, negative, or neutral. You may also make comments (no foul language, abuse, racial comments, etc are allowed). Each user has a feedback score that serves as an indicator of their quality as buyers and sellers. It is effectively your online reputation. The more positive feedback you get, the higher your score, which also eventually is visually identifiable with a star system so experienced eBayers can tell something about you at a glance. Negative feedback lowers your score. There is also a running percentage of positive feedbacks. Some sellers will not allow buyers below a certain feedback level, as most fraud is committed by new, or fake, buyers who will generally have little or negative feedback ratings.

Buyer Protection

Currently eBay offers buyers protection. Online payment service users, such as PayPal are assured a Buyer Protection shield covered up to $500 (subject to change) at no additional cost. For users who are not using PayPal as their mode of transaction there is the eBay Standard Purchase Protection Program which provides up to $200 coverage (less $25 processing cost) for either items that are not received or items that are not as described in the listing. The resolution process can be slow and on many transactions that fee makes it not worth doing, so it is better to caveat emptor up front than hope to get money back on a bad deal later.

Fraud Protection

There are a number of ways eBay works to minimize fraud, some of which are automatic. The website feature of eBay allows the users to keep a constant track of which sites they visit. Whenever a user leaves eBay by clicking on a link, or when are transacting on PayPal, the system warns them of potential frauds. In addition, eBay helps users prevent and combat fraud by conducting online tutorials on fraud emails – such as those requesting personal or financial data no legitimate company would request – and educating members on how to report such issues to the eBay authorities.

There are buying strategies for buying if that is your end goal, but we’re assuming you’re here to learn how to buy to sell at a profit.

Obviously, in order to sell, you need to have things to sell – which in general you will have bought not too long ago. It is important to purchase early (ahead of your planned sales) and wait for the right time to auction merchandise. For example, don’t purchase an item and put it up on auction before it reaches you, for obvious reasons. For another example, unless it was a one-time deal, don’t put items up on eBay that you just bought. Your potential buyers can see what you paid, and that will disadvantage your pricing strategy.

What to buy?

You need to decide what kinds of items to sell, before you can buy them. Fundamentally, whatever you choose should meet these requirements:

· Something with a consistent predictable demand
· Something that you know a lot about – or want to know a lot about
· Something that can routinely be sold at a profit
· Something that is not available to most people locally for a similar price
· Something that you have room to store and will not lose value over time

Once you start thinking about the categories of items you want to sell – and there are more or less unlimited categories on eBay – you’ll have a good idea of what you should look at buying for your “inventory.”

How much to buy?

Think carefully before jumping into large volume purchases, even if the price seems good. Also research the specific type of item by searching past auctions. For example, we know one woman who had started a successful clothing business on eBay. She scoured the auction sites for odd lot deals on brand name merchandise in bulk, then she would sell them one at a time for a nice profit, in some cases 300% or more per item. One time she purchased an “amazing” deal on LaCoste (alligator) polo-style shirts, acquiring 144 – a gross – of them at a low price, around $8 each. Considering her local high-end retailer sold similar shirts for $48, this seemed too good to be true.

And it was. First, the lot was mixed colors and sizes. For example, the gross included 12 size smalls in bright yellow, and 12 size XXL in pink. These would be very hard to move. Second, these particular LaCoste shirts, while the genuine article, were made under license in Peru, not at the LaCoste factories in Europe. Some additional research showed that web discount shops sold these same shirts for about $20 all the time. So right there the profit was shrinking fast. And then you factor in the shipping on the 144 shirts, which was a couple hundred dollars, and the whole thing was basically a break-even pain in the rear.

The point is, first, know the market for your product and to the extent possible what you’re actually getting, and second, test the market with a few items to see how they do. Don’t buy 144 of anything unless you really know what you’re doing!

Bidding on eBay is easy to do, and hard to do well.

Here are the basics. Every auction item states a minimum bid. Bidding does not cost you anything.

Bid Increments

You can bid whatever amount you want, but as the price of any item rises, the minimum bid increment rises also.

Automatic aka “Proxy” Bidding

Most online auctions including eBay use a “proxy” bidding system for non-fixed price auctions. You can approach auction bidding with two philosophies. First you can bid the maximum you are willing to bid right now then check the auction, or your email, to see if you are outbid and may want to bid again. Alternatively, you can bid the maximum you think you will ever be willing to bid on the auction. Here’s the difference.

Say you are bidding on a Movado watch with a retail value of $695. The auction starts at $50 and has no reserve price.

Currently, with three days to go, the bidding is up to $135. You are willing to pay $400 but you only want to bid $150 today, so you do.

There are two possibilities. If someone had previously placed a higher “proxy” bid, their bid will increase automatically to beat yours even though you bid more than the current displayed price. If nobody did this, the bid will go to your price, or, the lowest price needed to beat any remaining proxy amount.

On the other hand, you can bid your maximum right now of $400. As the bids go up, your bid will automatically go up to your maximum, at which point you will be the high bidder and win, or you will not, and lose.