Over on the Auctiva Education Blog, Dennis L. Prince asserted (on Friday) that “Smart listing strategies will ensure continued sales”.

It’s a great post and well worth a read in the context of its original intent. However I’m in a bit of a mischievous mood today, so I’m going to give the post an “on the other hand” workover. Have a read of Dennis’ original as well as what’s below, and add your comments at the bottom of the page (login not required).

I’ll start with a direct quote from Dennis that could have come from a Marketing Institute presentation (the subsequent section titles are also from Dennis’ original post) -

Since its inception, online selling has been called the “perfect market” approach. In simple terms, the concept asserts fair market value will always be obtained for goods when buyers and sellers come together to transact, the result being the current acceptable market price for goods.

When serious economic uncertainty creeps into the marketplace, however, the perfect market can become a problem for sellers who see prices continue to drop and profits erode as marketplaces such as eBay maintain and even raise fees on merchants.

If all of this gives you heartache and tempts you to bail out of online selling, wait – you can still be successful even when all signs seem to point to a loss. Here are five tips to consider and employ in your online auctioning and marketing that can help you navigate a way to continued profitability even when the waters become undeniably choppy.

1. Be selective in what you sell

Look, there’s a recession and a global downturn going on, but let’s be realistic about things, OK?

The cheapskates and the penny-pinchers are always going to be with us (as JC could have said as he turfed the money changers out).  Similarly the mega-rich and the greedy are always going to weather any economic problems – ask yourself why house prices at the very top end of the market barely bob up and down in a depression.  The people who get hurt the most are those in the middle.  That’s right, the middle classes – from the upper working class through to the nouveau-riche-not-quite-truly-wealthy.  They are going to be squeezed and bled dry as they try to maintain their lifestyles.

Forget the nickel and dime sales.  eBay have priced those off the site anyway – save them for the no fee sites to increase your market exposure on alternative and additional channels.  Forget trying to become a purveyor of Lamborghini and Ferrari classed items to the always-rich.  You need to be pitching to the people who have to cut back, but don’t want to look as if they are doing so.

It’s time to start buying the fake designer labels and “unique” knock-offs from the cheap Chinese exporters.  Don’t forget to print up plenty of title-deeds for British bridges too, they’re always good sellers for punters trying to out-do the Joneses.  Remember – the upper end of the middle classes will be pawning their Rolexes, so be sure to get plenty of those $10 look-alikes into stock, then they can buy and pretend they haven’t been down to the hock shop.

2. ‘Enticing price’ isn’t necessarily the ‘lowest price’

You get what you pay for – right?  If it seems too good to be true, it probably is – right?  OK, overcome the “too cheap to be real” scepticism by hiking your prices to what people expect to be paying.

Don’t chase the bottom of the market.  As my best mate says, “If you crawl, expect crabs in your shorts”.  In other words, float above the bottom feeders and reach down through them to catch the king prawns.  In this context, the prawns are not necessarily the Cockney equivalent of “plonkers”.  They’re simply the ones clearing up what everyone else is ignoring.  Remember, prawns and their bigger cousins, lobsters, are able to swim freely in open water – something that crabs cannot easily do.

Pull the prize customers away from the pack with tempting prices that make them think they’re getting something better than everyone else … even if they’re not.  Always leave them feeling they got a bargain, they’ll come back for more.

3. Cut costs to shore up profits

Good old Dennis waffled and spun better than Usher Leiberman on this topic.  He missed the most obvious point of all though – eBay are ever more frequently increasing fees and demanding sellers swallow the P&P costs in order to attract the lowest price points.  Therefore the simplest and most effective cost cutting is to cut eBay out of your marketing mix.

There, I said it.  If sales and margins are dropping, cut the costs at the top line, not somewhere in the middle, and most certainly not at the bottom.  Find cheaper marketplaces and save costs.  Find smaller markets with less competition and stand out from the crowd, immediately gaining a larger market share.  Together those two factors will turn profit volume back towards the right direction.

A simple example is my own efforts when I first started using online auction channels -

• Back in late 2003 and early 2004, I was running an average daily count of 2,000 listings on eBid (free to list and pennies in FVFs if a sale occurred).  On an average month with £500-$600 of sales, my fees were around £5.00 all-in.
• Also in 2003, I was using sites like Freeserve Auctions (until eBay bought and closed them), and niche site like MyBookLocker, until they were hacked and crashed.  I had weekly sales of around £50.00 and fees in the pennies per month on both of those.
• By mid 2004, I had a similar number of listings on eBay, and a similar total sales volume, but was paying £150-£200 in fees.  I must have been mad. I was effectively giving them the gross turnover from the two smaller sites, without increasing total sales value.

However, eBid had grown and sales had slowed a bit, so I was trying to expand and was listing like crazy on eBay UK’s monthly FREE Listing Days – sometimes live-uploading (no scheduling) as many as 6,000 listings on one of those days (using a dial-up Internet connection too – my modem fried twice that year).  The fees were mainly therefore FVFs and I didn’t notice the overheads creepage until I was too embedded in eBay.

“Avoid proclamations of ‘times are tough’ within listings, and resist imposing hard-lined policies that would dissuade buyers” says Dennis in the original post – I agree with the first half of the sentence, but not the second.

Banzai !!!  No prisoners.

eBay buyers are the most difficult to please in the world, and they think nothing of trashing a seller’s business with vindictive (or thoughtless) feedback.  Put them in straightjackets with ice-hockey masks on their faces, and nail their ears to the rafters.  Caveat Emptor – right?  They should read the terms of sale before committing to themselves to them.

4. Put on a happy face

2009 is going to be tough financially, for everyone – especially for eBay corporate.  Bigger sellers won’t be relying on eBay as a sole channel the way they did in previous years.  There’s already been several who very publicly have launched their own eBay alternatives, and many more who made an “Agincourt Salute” to the fee-meisters.  If you’re going to stay, take a lesson from the smiling assassins of yesteryear.

Remember P.T. Barnum’s famous declaration, and above all be up front about your prices – tell the buyers what they’re paying for.  Make sure they know why you’re 30% – 40% above High Street retail, and make sure they know it’s because of eBay and PayPal’s fees.  But say it with a smile and they’ll still buy from you.  Sell the sizzle not the sausage – tell them about the convenience of online shopping and home delivery, get their eyes away from the price and the postage, use some of that eBay smoke and mirrors experience on them.  The hand (on the mouse) is faster than the eye – right?

Better still, remember the old street seller’s trick – it works online too – “Too expensive is it Sir/Madame?  No problem, you’re free to get it somewhere else …. if they have stock”.  Then ignore them.  Most buyers actually do appreciate such honesty, will pause and think for a moment, and will still buy from you rather than resume hunting for it cheaper.  They’ve already broken the ice by entering into dialogue with you, and subconsciously consider you a lower risk than someone they’ve not yet approached.  You’re a slightly more known factor, and that does influence them … even if they don’t know it.

5. Offer higher-priced goods… where there are no fees

I agree with all that Dennis said in this section, except that there is a per-sale cost involved with sending out printed or digital catalogues in packages of other purchases … ANY small business person can put him straight on that.  The trick is to minimise the cost involved in getting the buyer to where your higher priced goods (and bundles) are available, while they’re costing you nothing extra to have them there.

Telephone directory sized tip sheets are all over the Internet regarding marketing tricks you can use to capture customers away from eBay and onto other channels, and then keep them returning to the latter.  I’m not going to repeat those here.  This topic is about capturing the fat wallets to buy your top-end products.  In my opinion, that’s where you earn your sales and marketing stripes, or are simply a downright lucky so-and-so with the right product in the right place at the right time.

Many years ago, a salesman friend told me, “you’re only as good as your next sale”.  That means that anyone can get the lucky big sale, but it’s the real sales people who routinely bring in the big ticket revenues, day in, day out, apparently without effort, but in reality with a lot of planning and skill, and very, very, rarely any luck.  Full time professional selling is a four-legged occupation – perspiration, persistence, planning, and personality.

All joking aside, we all need to learn to sell refridgerators to eskimoes, and coals to Newcastle, in the coming year.

• If an appearance-concious yuppie wants to buy a fake designer watch, so that they can pawn the real one to pay the mortgage – who would you rather see sell it to them, a cheap Chinese exporter … or yourself?
• If an “everything for nothing” penny-purchase scammer wants to do a fraudulent PayPal charge-back and submerge the seller’s DSRs, who would you prefer sells to them – you or someone else?
• If you can be a whale in a small pond, instead of a dolphin in a large net, will you make the leap?

Is higher profit for less cost important to you, or like eBay, do you believe total GMV is the most important metric?  Any fool can sell anything, but not many fools make a profit.  Turnover is vanity and profit is sanity.

I’ll leave the final quote to Sun Tzu – “Keep your friends close, and your enemies closer”.  Don’t close your eBay account – keep it open to make use of cheap listing days and fee promotions, but don’t rely on eBay to continue feeding you and your family.  Decide what portion of your total marketing costs you’re going to continue throwing at them, then stick to it.  Remember to keep checking whether or not Worst Match and Frightening Finding is hiding your items from potential buyers.

2009 is going to be the year that the Arthur Daleys and the Del-Boy Trotters come to the fore.  Be sure to dig out your camel-hair coats and dust off the Reliant Robin.  If all’s fair in love and war, how much more so in an online store?

Gaz

….. can I take my tongue out of my cheek now?