The paper lad’s late this week, but forgive him as he’s carting around a bumper issue for you all … Put the coffee on, grab a croissant, and settle back for a news round up.

Bloggosphere

Alex Bellinger over at the SmallBizPod blog had a worrying report this week from The Economist’s annual Innovation Summit for UK and European start-ups and small businesses.  The outlook is exceptionally gloomy from the venture capital world, with wholesale carnage predicted over the next few years in the small business sector – go read it.  While you’re at SmallBizPod, also check out Alex’s take on Social Networking sites, especially the growth figures he gives for LinkedIn – one of the originals going back to the Millennium, and until recently, one of the most overlooked.

Meanwhile back in March this year, Ian Denny at Phoenix from the Ashes (blog) wrote a now even more pertinent “Small Business Credit Crunch Survival Kit” that explains well what to do in the current economic environment.  It does need a little translation for adaptation to businesses relying solely on Internet-channels to attract revenue, so I’m hoping to find time this month to write an article in that vein.

Raghav Gupta has left eBay.  If you haven’t heard about this yet then you’re either a dedicated follower of the eBay spin machine or you’ve had your head in the sand for a week.  Raghav was one of the technology foundations for eBay and though i could wax lyrical about his abilities and achievements, it’s best I let you read what Henrietta had to say about him.  Also take a minute to pop across to Raghav’s blog and read his last half dozen or so posts, including his ode to eBay.  His departure has the possibility of severely slowing the rate of changes on eBay, especially as it follows the loss of their head of technology and infrastructure earlier this year (remember what I keep saying about their infrastructure being overloaded and ready to collapse?).

Randy Smythe recapped the recent eBay Top Seller webinar and summarised it all in the fewest words of any blog post – good old Randy, nothing like blowing away some of the eBay smoke and smashing a few of their mirrors, eh?

Blog quote of the week

Nothing this week really caught my eye I’m afraid.  Raghav’s resignation blog post (above) was notable for the odd comment, and Henrietta’s post about static stock (below) had some good points, but unfortunately, nothing rated a “blog quote of the week” award – I guess everyone is getting too much into the swing of pre-Christmas sales to emit blindingly good commentary?

UPDATED – a very late in the day find on The BrewsNews – in a post about what they learned from their kids and a hypothetical lemonade stand in the front garden (emphasis is mine) -

eBay can never hope to be the Wal-mart of the internet for many reasons but, where sellers are concerned, there are two main reasons.  First, eBay sellers in the aggregate may sell huge amounts but individually sellers can never hope to get manufacturer pricing anywhere near what Wal-mart can and, thus, they cannot pass along savings to customers like Wal-Mart can.  Second, selling on eBay is incredibly expensive both in terms of the time it takes to list items on eBay and to service eBay customers as well the monetary cost to sell on eBay and, therefore, eBay sellers cannot afford to offer the lowest prices with such high costs to bear.

Discussions & Forums

I took some time out this week to have a good rummage around a variety of discussion boards tied to different news and blogging sites.  It’s left me with the impression that discussion boards not tied to extremely niche subjects with passionate followers, or to established trading sites (be they auctions or whatever), are becoming like ghost towns.

Some of the independent forums for online sellers have simply become gossip shops to discuss what the children did last, or who is going where for holidays, with maybe a few token posts about “what do you think of my latest attempt at a website?”.  This is all rather sad when you think about one of the most empowering qualities of the internet and the power of networking.  It is also a reflection of the lack of “fun” add-ons that most discussion boards offer.  Perhaps this is why the social networking sites are taking over the “societal role” once filled by forum-based websites?

International

Bonanzle finally implemented International Shipping options.  Not a full suite by any means, and as regular readers know, they would have to go some to beat the functionality and flexibility offered in the osCommerce software.  Let’s just say they dipped their toes in the water in a similar manner to the zone limitations available on sites like eBay and eBid.  You can read the a blog post by Bonanzle evangelist Henrietta on her RedInk Diary about it, or go direct to Bonanzle.com to have a nosy.

BrewsNews ran a piece about the PayPal 21-day money holds, full of tips on how to minimise the risk of being subjected to them, and unwittingly (maybe) revealed a further eBay action to destroy the internationalisation of their market place.  Read carefully point number 4 in their post.  Now I’ve been banging on for a while that eBay are determined to de-internationalise their market places, and commercially this does make a “sort of” sense.  Repatriating revenue from overseas is expensive for eBay/PayPal – it’s why instead of using their Swiss war chest for the latest acquisitions, they borrowed from the US President’s economic revitalisation funds, to much public outcry a few weeks ago.  Though exactly what they’ll be doing with those ever-increasing overseas liquid assets is anyone’s guess … far-flung retirement homes on a private island, and golden beach umbrellas for executives perhaps?

Money Matters

One of the lessons I learned many moons ago, is that when the going gets tough, the savvy entrepreneur increases spending in the sales and marketing portion of their business.  Think about that.  Revenue is falling, there’s talk of recession or economic crisis, and your competitors are retrenching and reducing spending (the bean counters have taken over management).  Every business needs to constantly find new customers, and there’s only one way to do that – get out there and find them.

I don’t mean go knocking on doors.  As Internet entrepreneurs, we have the cheapest marketing channel available (and that doesn’t mean spamming past customers, although previous buyers are easier to persuade to return), it’s new customers that are the life blood of businesses in lean times.  When all is going well, the returning customers are the ones who fill the coffers, but when cash is tight, they are likely to return less often.  So, although you need to keep marketing to existing account holders, and keep them looking to you, you need to redouble efforts to get new customers and hopefully strike lucky by finding ones with new budgets to burn.

As recession bites and competitors reduce marketing spend, analyse your own business, find the profitable market sectors (products, customers, geographical area – whatever) and pour more resources into increasing your market share in the area(s) you identify.  As the financial situation improves and the world returns to the next boom cycle, you will be far better positioned to take the lion’s share of it.  This may seem a little “up in the clouds” if you’re a part-time seller working from home, but it’s not.  Now is the time to analyse your business and make sure you know exactly what your business is about – after all, if you don’t know, how can your customers be expected to?  And if they don’t know, how can they be expected to buy from you, or even to find you?

Between now and year end, try to find time between servicing all the Christmas season sales to sit down and determine which parts of your business you’re going to focus on next year – which products, channels, customer demographics, regions, transaction values, etc. – and which ones you’re going to dump.  Use the dumpers for the January sales (e.g. the avalanche of eBay Cheap Listing Days that always arrive between Boxing Day and mid-January), and use the same period to re-organise your online shops, booths, and kiosks to reflect the new you for 2009.

In a similar vein of though, but from the accountant’s viewpoint, Henrietta at RedInkDiary wrote an interesting post about stale inventory and its cost on the shelf.  Well worth a read if, like me, you have trouble navigating the stairs due to the stock piled up on them.

A very short but thought-provoking micro-commentary from Randy Smythe regarding Wall Street and the pounding that eBay and Amazon shares have taken very recently

Online Channels & Venues

As eBay’s share price dropped under the $13 mark this week (hitting $12.84 on Monday, though Randy’s post above says they went under $12.00) the topic of seller dissatisfaction and the flaws in the DSR system began resurfacing in both the Bloggosphere and the mainstream media.  WebProNews re-covered the top ten frustrations for eBay users at the tail end of October, linking to the IMA’s useful leavingfeedback.com tuition page for using DSRs – it does a far better job of it than eBay’s pathetic attempt (in their help pages) – in fact any 3rd party site does that.  When reading the WebProNews article, scroll down through the comments and read the one posted Mon, 10/27/2008 – 11:17am – truly scary stuff.

Meanwhile PC Retail online reported a BSA report that triumphed the closing of “18,314 auctions around the world selling over 45,000 items of pirated software.”  The report quotes the BSA as saying -

the perceived anonymity of the internet had led to a rise in the view that it was a victimless crime, however, speaking on the eve of the report’s release, vice president of the anti-piracy and general counsel at the BSA Neil MacBride warned that attitudes have to change.

“The anonymity of buying over the web leads to the distorted belief that intellectual property theft is a victimless crime,” he said. “Whilst many would not dream of shoplifting a music CD or package of software from a store, they are willing to go online to seek out copies of what is clearly illegal software.  Ignorance is not an excuse – businesses should be making basic checks to ensure that what they are buying is authentic.

Hmmm – now what was that old excuse for the existence of the “world’s oldest profession”?  “If the demand wasn’t there, the trade wouldn’t exist”  or words to that effect.  To me the key phrase in the BSA report is overlooked, though it clearly places the blame on the buyers, “they are willing to go online to seek out copies of what is clearly illegal software” but it makes me wonder how many buyers of such items eBay is willing to ban, in comparison to how many sellers of such products?  Where I come from, receiving and handling stolen/counterfeit goods is as criminal as supplying them.  I’ll bet eBay never thinks about that.

In a similar seller-punishing vein, the German courts have been getting tough lately.  Germany’s “The Local“, which reports German news in English, reported on the case of a seller who forgot to set a reserve price and had to part with a 12,000 Euro yacht for just 22.50 – apparently not the first such case.  The article also cites the sale of a 60,000 Euro tractor for just 51.00 Euros, because again the vendor forgot to set a reserve price.

Looking at those two cases is proof absolute for why eBay should return to free reserve prices – they’d make a sight-load more in FVFs than they make in the discouragement of reserves through fees for those.  As a yachty myself, I empathise with the seller, though given the brand and model of the yacht (in the article) I am left wondering exactly what was wrong with it, if it was only valued at 12,000 Euros, and thinking the buyer may have bought a money-pit needing extensive repairs or refitting.  Jeanneau’s are not cheap boats – even second hand.  The sale was on AllesAuktion.de not on eBay, but the same need for caution applies.

Suppliers & Services

Kuala Lumpur (Malaysia) based OnlineAuctionsDaily launched a “How to” series mid-week.  Optimistically called “How to make a fortune with your eBay Home Page” I can’t help wondering if the writer has spent the last 11 months in a coma, or whether they are an eBay employee “planted” into the blogging world.  Opportunities to make “fortunes” on eBay evaporated in 2006.  Nowadays it’s all about a consistent grind to stay ahead of the fees invoice and make enough extra to put something in the bank after paying for stock.  They do have an extensive articles category for eBay Alternatives on their site, acknowledging that the universe does not revolve around San Jose.  They also have a Wholesale Directory on the site – something I’ll eventually find time to do on BuildaSkill – and in fact, they also cover suppliers quite extensively.  Well worth a visit, and I’ll be nosying back there regularly.

Social networking sites are emerging as the possible future marketing channel for online retailers – at least according to a story in the ecommerce guide.  It seems more and more online shoppers are relying on them for bargain hunting and recommendations from friends.  Mid-week, Gaz blogged here on BuildaSkill about his experiences of using onsite advertising on Facebook (follow up due mate – how’s it progressing?) and it’s an interesting read.  Couple this type of developing buzz with tools like ShopIt, which we’ve blogged on BuildaSkill a few times, and as we’ve questioned several times, social networking sites could take over from eBay and their ilk for the small and hobby sellers, plus provide a significant additional channel for serious businesses – see what I said above about online forum sites, for extra justification.

That same ecommerce guide article provides some valuable demographics about how North Americans relate to different online communications methods for bargain hunting, and some further advice about the topic of geo-targetted advertising, which will no doubt reawaken memories of eBay being accused of, and denying, the geo-clustering of item visibility.

Webifying

If like me, you utilise affiliate marketing programs with your websites, you’re probably not wanting to hear about extra work at this time of year.  However, if you used Amazon a lot last Christmas season, you can’t have not noticed the links to “Letter from Santa” that were all over the site.  The good news is that you can now advertise the same service on your site, via Commission Junction, and it’s still not too late to get those links on to your site.

“A Letter From Santa” is operated by an Anglo-American company established in 1998. Although operating under the universal banner of Santa-Claus.com, logistics are directed through local HQs.  For the UK, Father Christmas Ltd operates Santa.co.uk from Cambridge based offices while Santa Claus, Inc operates SantaClaus.us from Nevada.  Both companies offer the same innovative products that have set the standards in “communications from Santa”.

“A Letter from Santa” and “A Letter from Santa Special” retail from £4.99 or $7.95, to £14.99 or $29.95.  Both high volume items come with up to 12 personal references and a Christmas Eve bedroom door hanger, whilst the Special also comes with a cute Teddy Bear and chocolates.  The envelopes arrive with a “Mailed from the North Pole” motif for that extra Santa believability, and at parental discretion, Santa will even include a unique password to his Top Secret website.

Affiliate commissions range from 15% to 30% depending on product and volume, and there’s a wide range of creatives on CJ.  Warning - around half of the creatives are from last year and the notes state they are discontinued programs, which means you won’t get paid if you continue to use them.  Not a problem, if you see one you like and want to use – get the HTML for an active program, and substitute the image URL with the one for the older image.  You’ll then be using the current code for earnings, with the older image that is still being displayed on CJ.

Order a Letter From Santa for someone you know if you feel it’s too late to add another campaign to your sites. You can order today and choose a future mailing date, and it can be mailed worldwide making it a great way to deal with presents for distant family and friends.  It’ll also help us pay the costs of keeping BuildaSkill online, and that’ll be a welcome Christmas present from you, to us.

Looking Ahead

Nothing to report here, except the obvious, move along please … there’s nothing that won’t be revealed in the fullness of time, for now.

Ed