Before you sell any product on eBay, no matter what it is, you need to do some research.  Let’s say you’re planning to sell a gourmet coffee gift basket.  How do you know how much that product is likely sell for, or whether it will sell at all?  Should you set a reserve price?  Is a fixed-price format or an auction-style listing preferrable?

One of the ways you can find answers to these questions is to preform an Advanced Search on eBay.  The “Advanced Search” button is on the homepage, right next to the regular Search button.  By hitting “Advanced Search”, you can search for products using keywords, checking particular categories, or even looking in a certain price range.

How To Research Your Potential EBay Product:

Step 1: Use keywords to view completed listings similar to yours

With our gourmet coffee gift basket, I’ll simply use the keywords “coffee gift basket” and possibly “gourmet” to search (I don’t want to input too many parameters or I won’t get a good overview of all the coffee gift baskets that have been sold).  Make sure you click the box to view “Completed Listings”.

Step 2: Examine your results

When I type in “gourmet coffee gift basket”, eBay changes my search to “gourmet coffee basket”, and I only find four completed listings from the last seven days.  Of these four listings, only one sold, and for a measly 99 cents.  This tells me that maybe coffee gift baskets aren’t the great idea I thought they were, and if I do try to sell one I should put a reserve price so it doesn’t sell for 99 cents.

Step 3: Refine your search

I’m going to try again, just to make absolutely sure coffee gift baskets aren’t a gold mine (after all, Valentine’s is coming up, so it seemed like a good idea for romantic javaphiles).  This time I use only the keywords “coffee” and “basket”.  I get 202 results, some of which are unrelated results like coffee makers and coffee-colored baskets.  I don’t read all the listings because I can easily see that coffee gift baskets are indeed a bad idea (at least right now): in the last seven days only one Starbucks coffee giftbasket sold for $19.99 versus eight baskets ranging from $8-$43.99 which did not sell.  Even that one sale was a brand-name product sold by an eBay Top Seller.

Step 4: Take the hint

When brainstorming, coffee gift baskets seemed like a good idea.  People love coffee, it’s a good gift item, it’s close to a holiday where gifts are given… what could go wrong?  Luckily I checked the completed listings before I wasted $2 trying to post my basket, or worse, went out to Sam’s Club and stocked up on twenty baskets to sell super-retail on eBay.

You should never, never try to sell a product on eBay that has a terrible sale ratio in the completed listings.  If you check the completed listings and the majority of laptop bags or embroidery kits or chess sets similar to your did sell, make sure that the price was commensurate with what you’re hoping to receive.  Don’t forget to ensure that the other factors of the sale are actually comparable: for instance, if you’re not an eBay Top Seller, you may not have as good a chance as selling your product, or if your item is used or refurbished and everybody else’s was brand new, you can’t expect the same price.

Wholesale Match is expanding into two new offices, one in American Fork, Utah, and one in Provo, Utah.  We are also adding new members to both our Research Team and our Account Manager Team.  This is part of an ongoing effort to serve our members better, including improving the speed and quality of our Research Request Results and offering additional resources for customer service, tech support, and educational tools.

What is a meta-tag?

Meta-tags are descriptions in your HTML code that communicate with search engines and are often visible to people who find your dropshipping website on a search engine response page (SERP).

When is your meta-tag used?

Search engines like Google and Yahoo often default to the meta description information, or use part of your meta-tag and part of the text they find on the page with relevant keywords when choosing information to display on the SERP.

If your meta-tag is used on a SERP, a human being will read that information when deciding whether to visit your dropshipping website or not.

Why are meta-tags important?

Creating a compelling meta description for each page of your website gives you the most control over what people read about your site in the SERPs.  (Remember to include the same keywords as your meta-tags in your actual web page content, because that makes it far more likely that search engines will display your tag.)  Also, meta-tags occasionally impact your SEO.

What should your meta-tag say?

Your meta-tag should accurately and attractively describe your web page, using relevant keywords (though not too many or you’ll be tagged for keyword-stuffing).  It can only be 63 characters long, including spaces, so you’ll probably have to stick to around 6-12 words.  Use keywords first, adding things like your company name at the end of the description.  Your meta-tag doesn’t have to be a perfectly grammatical full sentence as long as it is clear and comprehensible for a human reader.

Check back next week for a description of how to actually insert meta-tags into your website.

How much capital does a person need to start an online business?  $100?  $10,000?  Obviously the answer is different for everybody, depending on your business goals and how many things you’re able to do on your own, but there are some common expenses that almost everyone has to shell out for.  There are cheaper and more expensive ways of setting up almost every aspect of your online business, but make no mistake, a business is an investment and it’s going to cost you something.  It might take you a couple of months to see a return on that investment, so don’t start an online business because you lost your job and you need to make rent or you want to buy a birthday present for your girlfriend next week.

What if I don’t have very much in savings?

It’s okay if you don’t have thousands of dollars stashed under your mattress.  You can look for less expensive options when setting up your online business, or you can seek additional funding from partners, bank loans, and lines of credit.

What are the costs of starting an online business?

The 8 main costs of starting an online business are as follows:

1. Education

Before you can start an online business you need to learn how to formulate business and marketing plans, how to choose a product, how to find suppliers, how to pick your venue, how to set up an effective website, how to market that website, and so on and so forth.  Perhaps your education will cost you no more than a library card.  Maybe you’ll get most of your information online, from a friend, or from a database.  Or maybe you’re a person who needs step-by-step encouragement and instruction and the best option for you is to hire a coaching service.

Learning how to operate an online business can cost you anywhere from $50 for a few good books to $5000 for a full-time coach.

2. Seller’s Permit and Tax ID Number (EIN)

It’s best to get your Seller’s Permit and Tax ID Number (EIN) as soon as possible.  You can get your Seller’s Permit either through one of the many companies offering their services online, or by downloading the form from your state Revenue Agency.  Your Tax ID Number can be obtained by applying online at the IRS website (you receive your number immediately and can download and print your confirmation notice).

Fees vary state by state, but it shouldn’t cost you more than $80 for the Reseller’s Permit, even if you use a service, and the EIN is free.

3. Finding suppliers

You can try finding suppliers online, but as anyone who has ever typed “golf club dropshippers” into a Google search can attest, you will have to wade through some 38, 700 results, 99% of which will be queries, middlemen, scams, foreign suppliers, and directories.  A second option is to attend tradeshows and other events to meet suppliers.  A third option is pay for access to a quality database.  The Wholesale Match database  offers affordable monthly and annual memberships, a Research Team to do the work for you, free educational materials, and a 100% money-back guarantee (probalby the only money-back guarantee you’ll find for an online service).

Finding suppliers will cost you approximately $200-500 for access to a database, or around $1500 for entrance fees, airfare, and hotel accommodation to attend a couple of tradeshows.

4. Products

You can handle your product sourcing in two main ways: by dropshipping or purchasing from a wholesaler.  If you decide to dropship, you won’t have to spend hardly any money upfront for your products.  There may be a small fee to set up an account with a dropshipper, but even this is uncommon.  When purchasing from a wholesaler, by contrast, you will probably have to make a large initial order.  (Subsequent orders may be much smaller).

The cost of purchasing products from a dropshipper is generally $0 upfront.  If you purchase from a wholesaler, your initial order may be anywhere from $50-$2000.  $100-$300 is most common. (Many wholesalers allow you to open a line of credit so you don’t actually have to pay any money upfront.)

5. EBay fees

Posting items on eBay occasions paying fees, whether or not your product sells.  Depending on the reserve price you set, posting a single item on eBay will cost you between $0.10 and $4.00 (adding extra photos, videos, etc. is extra).  You will also be charged a percentage of your final sale value, but that’s only if you make a sale, so that fee is really an operating cost, not a set up cost.  There are other auction sites you can use like Bonanzle which do not charge a fee unless your item sells, which is nice for e-commerce newbies, but these sites don’t always see the same traffic eBay does.  You should probably try selling on a few different auction sites and see what works best for you.

The cost of posting items on eBay is at least $0.10-$4.00 for one, or $1.00-$40.00 for your first ten.

6. Setting up a website

If you’re proficient at web design, setting up a site will cost you practically nothing.  Even if you’re not particularly computer-savvy, there are thousands of customizable templates you can use for your website (many are available free through hosting services).

If you do want to hire a professional, web-design will cost you between $500 for a student to $3000 for a seasoned pro.  You will also have to pay about $5-50 a month for web hosting, and between $10-100 to register your domain name.

7. Marketing

Once you have your website set up, you’re going to have to do something to bring in visitors.  The most common way to market a website is through Pay-Per-Click Advertising (PPC).  PPC can cost anywhere from $0.10-$1.00 per visitor – basically you bid for certain keywords, and whenever someone types that keyword into a search, your ad pops up at the top or side of the search engine response page.  PPC is nice because you can set a certain budget, say $300, and once that amount is exhausted your ad will disappear.

Of course there are many other ways of advertising your online business including banner ads and press releases.  You can even find free ways of promoting your business, such as contacting your local newspaper for a write-up, sticking an ad decal on your car, or participating in an advertising exchange.  But for now, let’s assume that PPC will be your main marketing method.

PPC will probably cost you around $200-500 per month for the first few months (once you start receiving organic traffic, you can cut down on your PPC ads).

8. SEO

SEO is Search Engine Optimization.  As mentioned above, the ultimate goal is to receive “organic” or “natural” traffic to your website.  This means that visitors naturally to your site due to your high placement in the search engine response pages (SERPs), recommendations and inbound links on other websites, and word of mouth.  SEO helps with your placement on the SERPS.  You build SEO mainly through keywords, quality content, inbound links, well-designed web pages, directory submissions, and deep submission.  SEO is something that needs to be done constantly and it can be quite complicated and time-consuming.  You can practice SEO yourself, but you may also want to hire a service to review the efficacy of your SEO or hire someone to do some of the work for you.

SEO can cost you nothing but your time, or can run you around $100 for a review, or $1000 + to pay somebody to help you out.

Lately I’ve been receiving a lot of questions about LLCs, corporations, and partnerships.  People are confused about which ownership structure is best for their online business.  Is it really necessary to make your business “official”?  What are the differences between the various structures?  What will happen if you don’t choose an ownership structure?

Overview of Common Ownership Structures:

Sole Proprietorship:

This is a one-person business not registered with the state.  You are not required to register, file papers, or acquire documents.  Basically, if you do nothing your online business with automatically be a sole proprietorship.  In a sole proprietorship the business and owner are one and the same – you report your business income and losses on your personal tax return, which may or may not be a good thing for you.  The negative to sole proprietorship is that you are personally responsible for business-related obligations like debts or settlements if you’re sued.

Partnership:

A partnership is like a sole proprietorship in the sense that you don’t file papers or documents.  However, if you are entering into a partnership you would be wise to have some kind of contract since each partner is personally responsible for the entire amount of any business debt or claims.  You’d also have a hard time recovering any resources your partner might make off with in the middle of the night if there was no contract in place.

Remeber, nobody enters into a partnership with someone they think is dishonest, yet people are ripped off by their business partners all the time.  Even if your partner is your own mother, don’t leave the door open to misunderstandings and future legal issues.

Limited Partnership:

Limited Partnerships are complicated and difficult to arrange (not to mention expensive), so this probably will not be the best avenue for your average online business entrepreneur.  Basically, one person or company (the general partner) creates the business and receives investments from the limited partner(s).  The general partner runs the day-to-day operations of the company and is responsible for all business debts.  The limited partner has minimal input but also is not responsible for business debts or claims.  Profit can be split in a variety of ways.

LLC:

An LLC (Limited Liability Company) is one of the more popular options for people starting an online business (it’s certainly the option I receive the most questions about.)  An LLC combines aspects of partnerships and corporations: its owners have limited liability for the company’s debts and obligations like shareholders in a corporation, but its income and losses are passed through to the owners like in a partnership.   It is much less formal and more flexible than a typical corporation.

The benefits include separating your assets so you’re protected in case your business gets sued.  It also provides some tax breaks – you are only required to pay taxes on your earnings once instead of paying both corporate and individual taxes.

The downside of an LLC versus a corporation is if a member of the LLC dies, leaves, or goes bankrupt, the LLC is usually dissolved.  You might consider making your online business an LLC if you want to reap the tax benefits (this would be important if you expect your earnings for the year to be quite high).

To set up an LLC, you need to file Articles of Organization with you state (usually through the Secretary of State).  You can hire an attorney to do this, or you can do it yourself (there are numerous do-it-yourself kits to help with this).  When I have legal/business/accounting work, I like to do it myself, then hire a lawyer or CPA to check it over.  That way I only have to pay for a little of their time, but I can be sure everything is correct before I file it, saving time and money in the long run.

Corporation:

A corporation is similar to an LLC: it is an entity that exists separate from the business owner, shielding owners and shareholders from company debt and obligations.  To set one up, you must complete articles of incorporation, file them with the proper state authority, and pay the requisite fees.  Unlike an LLC, if an owner dies or sells his interest, a corporation continues to exit until it is formally dissolves.  A corporation can also issue stock, which helps attract outside investors.

A C corporation is a standard business corporation, while an S corporation has greater strictures but allows you to avoid double taxation.  An S corporation is usually the choice of small business owners and entrepreneurs who want the legal protection of a corporation, but want to be taxed as sole proprietors or partners.  The strictures such as “no more than 75 stockholders” and “only one class of stock can be issued” are not a problem for your average small-business owner.  All stockholders/partners have to be US citizens or permanent residents, however.

Which Should Your Average Online Business-Owner Choose?

Generally, I’d say it’s not necessary to set up your online business as a Corporation or LLC unless you’re planning on amassing a mountain of debt or getting sued.  If down the road your online business vastly expands, you can change it’s ownership structure then.  I would recommend seeing a lawyer if you’re entering into a partnership, however, as an undefined partnership leaves you open to a host of financial difficulties.  You might want to speak to a CPA or attorney in any case before making a decision about ownership structure.

Pay-Per-Click (PPC) advertising is a very useful way to bring traffic to your website in the early stages of your online business when you’re still building your search engine page ranking.  PPC advertising is a system where you pay for ads on search engine pages and other websites.  You bid for the best placement, and then you pay a set amount, say 10 cents, every time someone clicks the link to visit your website.  PPC is beneficial to online business-owners because you don’t pay simply to have your ad posted, as you would with a traditional billboard or tv ads – you only pay when people actually visit your site.  You can also strictly control your costs, because once your agreed-upon amount is depleted – say $300 – your ad is immediately removed.

The downside of PPC advertising is that the traffic can be of very low quality – meaning, visitors have a high “bounce rate” (they leave immediately after landing on your home page), or your traffic has poor conversion (you have plenty of visitors but they don’t buy anything).  You can also have an issue if you’re paying for international visitors, but you don’t ship out of the country.

Obviously, you need to choose the right PPC service for your online business.

Which is the best Pay-Per-Click service?

The biggest and most popular PPC option is Google Adwords.  Google generally brings the most traffic to your site, and the traffic is of relatively high quality.  The problem with Google is it is usually the most expensive PPC option.  Many small businesses find it difficult to compete with the big brands in PPC on Google.  (It helps if you bid for placement at the end of the day or end of the week.  Many large companies have a set PPC budget on a daily or weekly basis – once their fund is exhausted, PPC becomes cheaper for the little guys.

What are my alternatives to Google Adwords?

If you prefer not to use Google for reasons of cost or because you want a more specialized PPC program, you can consider the following options:

1. Yahoo! Search Marketing

Pros: Like Google, Yahoo! is a popular engine with a well-established program and quality traffic.

Cons: They are likewise expensive, though some keywords are cheaper.

2. MSN AdCenter

Pros: Known for quality traffic and a very useful keyword research tool.

Cons: Poor reviews for their difficult interface and overall useability.

3. SearchFeed

Pros: SearchFeed purports to be a more specialized PPC service.  They promise more targeted advertising, which could be beneficial for people selling niche products – in particular they offer geo-targeting (traffic from your specific country).  They are generally much cheaper than Google.

Cons: Smaller services like SearchFeed have been accused of providing lower-quality traffic.  However, since the service is so much cheaper, you may still get a better ROI (Return on Investment).  For example, if you received 100 visitors from SearchFeed for the same price as 10 from Google, as long as 10 or more of those visitors are of comparable quality, it’s a better investment.  But it’s quite possible that all 100 of your visitors could be useless.

Note on SearchFeed: If you are receiving inappropriate traffic (too many international visitors, scam clicks, etc.), you can call the company and ask them to tailor your placement.  This has resulted in better traffic for some users.

4. 7Search

Pros: Known for their high ROI, which they claim is better than Google’s.

Cons: As with many of the smaller services, users have reported receiving 100 visitors from all over the globe for every 1 from the US.  If you’re not planning on shipping internationally, this could be a problem.

5. MIVA

Pros: Quite inexpensive, and offers a list of under-bid keywords that you can advertise for pennies.

Cons: Accused of having a very high automated traffic/scam traffic rate.  Some users claimed to have spent hundreds of dollars without receiving a single viable sale, though others reported a positive experience with a good return on their investment.

Most of the reviews I’ve read on messageboards, blog posts, articles, and so forth are very mixed.  The best course of action is probably to try a few different PPC services and monitor your conversion rates and overall ROI very carefull.  I would recommend starting with Google, and then run the same PPC ads through other companies as well.  (You need to use the same keywords and post on the same days/times so you can isolate the real value of the service.)  Many PPC services offer a $25 or $50 credit for signing up, which would allow you to test their results without spending too much money.

Most people can sell one or two items on eBay, but what do you need to do to take your sales volume to the next level?  The following are five easy tips for boosting your sales:

1. Improve your Profile

If you haven’t already filled out all the information on your About Me page, including a photograph that makes you look like Aunt Jemima rather than the Unibomber, this should be your first step.  Your About Me page can be a very effective promotional tool, and can include much more than a biography.  Take Ken Potter’s About Me page: http://cgi3.ebay.com/ws/eBayISAPI.dll?ViewUserPage&userid=koinpro. Ken’s page includes a detailed curriculum vitae and offers a list of his educational articles.  It includes a bar of his favorite links, and an offer to sign up for his free newsletter, (which I’m sure he uses to gather email addresses to promote his business via direct marketing).  Ken has used his page to build a solid impression of reliability and knowledgability.

2. Offer a Money-Back Guarantee

You may be afraid to offer a money-back guarantee because you think every second item will be sent back for some arbitrary reason, but in fact most people don’t want to go to the time and hassle to return products, even if there is an issue.  The fact that you offer a guarantee will make people much more likely to buy from you, and you will probably take very few losses, especially if you’re honest and accurate in your listings.  If you prefer, you can offer a modified guarantee, such as “Returns within 30 days”, or “Full refund if item is not as described”.  Honoring your guarantee will help keep your all-important customer rating high.

3. Boost your Customer Satisfaction Rating

Despite your impeccable fulfillment of 10 or 20 sales, you may find that your customers aren’t actually rating you.  One of the best ways to ensure that customers post a positive rating is to give them a positive buyer rating yourself.  It’s also not out of line to send a polite message asking for a review.  If you are having a difficult time getting any ratings or any sales at all, try selling a few small, cheap items at cost purely for the experience and the rating boost.

4. Lessen your Auction Durations

This tip may seem counter-intuitive: after all, won’t your listings garner more views the longer they’re up for?  The answer is no.  Your listing will get the most attention in the Best Match and Time Ending Soonest results if your auction duration is shorter.  The majority of bids come in the last 24 hours, in part because a lot of people are like me: they treat eBay more like a garage sale than a silent auction.  Since I want to make immediate purchases, auctions that are closing in the next few hours and Buy It Now listings are the ones that I’m most likely to pay attention to.

5. Don’t Overcharge For Shipping

EBay buyers aren’t stupid – they know what shipping on a particular item should cost.  Your profit margin should not be padded by a mark-up on shipping costs.  At most, you should add an extra dollar to shipping for the time and materials required to package the item.  Don’t think you can get away with averaging out the item and shipping cost either – eBay will ban you if they catch you boosting your shipping prices to avoid paying fees on your final sale value.  And remember, even if you do fool somebody into paying ludicrous shipping fees, they’ll just torch your customer satisfaction rating later.

Once your eBay sales have increased, there are many more tools and applications you can use to take your sales from profitable to earth-shaking.  However, these tips should help you boost yourself from part-time dabbler to eBay professional.

Audio is one of the great secrets of eBay, an under-used tool that has been shown to boost overall sales volume and also bid prices on individual items.  Adding audio to your eBay listing personalizes your post – it makes your post more memorable and trustworthy for the buyer.  It also allows you to include more information about the product and point out important selling features.

What will audio do for my listings?

The results of adding audio to your eBay listing are incontrovertible.  To give an example, in his article 77 Tips and Tools for Selling on the New EBay, Skip McGrath relates how he saw an immediate increase in sales when he began using audio in his online auctions.  He was selling fire pit barbeques in the $200 range, averaging about one BBQ sold per week.  After he added audio, he began to sell one a day.  To fully test his theory, his sold a number of Starbucks collectibles in identical auctions, half with and half without audio.  The audio auctions received more bidders and sold for as much as 22% more than the control group.

How can you add audio to your eBay auction?

You can add audio in a number of ways.  One of the easiest is to use a tool like Seller’s Voice to record audio via the phone or your computer’s microphone and upload it to your eBay post.  The benefit of using this kind of tool is that it runs using flash and is compatible with most buyer’s computers.  The downside is, of course, that they charge a monthly fee of around$29, though you can try it out for $1.

Whichever method of adding audio you choose, make sure you obey the eBay rules – they are selective about which kinds of audio they allow in posts.  Also, tools like Seller’s Voice give you the option of having the audio play automatically, or only when a button is pushed by the buyer: personally, I don’t like unexpected noise while I’m online, but you might increase the number of customers who hear your audio by having it play automatically.  You’ll have to decide whether you want to run the risk of annoying people.

According to a recent survey by Netcraft, there are more than 182 million websites on the world wide web.  Of that 182 million, how many are retail sites?  A LOT.  So how can you make your online business stand out from those thousands, even millions of other websites?

Develop a strong “point of difference” for your online business

“Point of difference” is a term for the outcome of product differentiation.  Business economists see product differentiation as an important strategy for businesses everywhere.  The modern man (or woman) is innundated with countless advertisements and product choices every day: products that stand out due to a strong point of difference are better noticed by consumers.  Furthermore, a clear and distinct brand image helps foster customer loyalty.

Your point of difference could be something quirky, catchy, or trendy, but I believe differentiation is most successful if it fills a need in the market that is not already being met.

How can you find market needs that are not being met?

1. Study the online community

By participating in message board discussions and reading blog posts, you can determine whether emo guys are interested in a “man makeup” website, or what products your average scrapbooker is hankering for.

2. Examine your own needs

Countless successful buisnesses have been formed by people who were trying to solve a need in their own lives – like the mompreneurs who create the perfect maternity pants or the hot new toddler toy.  Take your basic business model, say “online sheet music store”, and ask yourself, what do I wish the average music store would offer that it doesn’t?  What would make me visit a particular sheet music store over another?

Remember, when formulating your business model don’t say “It’s going to be just like Zazzle” or “It’ll be like CoffeeGeek”.  If your site is just like a bigger, better established website then you won’t be able to compete.  Use your point of difference to stand out from the crowd.

Wholesale Match has recently added six new videos to our education section.  The instructional videos walk you step by step through researching products on eBay, calculating the profit margins of potential products, ordering from dropshippers, and more.

The new e-commerce education videos are titled as follows:

Research Products on eBay

The Retailer’s Site

The Profit Calculator

Completing an Order

Sales and Coupons

and

Saving Images and Descriptions

All Wholesale Match members have full access to our educational materials including the videos, articles, blog posts, and Daily Deals products.  If you are not currently a Wholesale Match member but would like to try our services free for one week, simply sign up for a free 7 day trial on the homepage.  In addition to the educational resources, you will have access to our extensive database of dropshippers and wholesalers so you can find a supplier for your online business.

If you have any questions, or if you have any difficulty in signing up for the trial or viewing the videos, please email the customer service team at support@wholesalematch.com or call 801-938-4718.