You shouldn’t bid at all until the last few minutes of any auction.

It may not be much fun for the seller. And you won’t get caught up in the thrill of the chase. But this is by far the best strategy for buying on Trade Me. When you find something you like,  add it to your watchlist, wait until 15 minutes before the auction is due to end and then follow these five simple steps:

1. Decide on the maximum amount you want to pay.
Unless the auction item is the long-lost silver watch that Lloyd George gave your grandfather, you need to set yourself a limit on what you’re prepared to pay. Deduct the shipping costs. That’s your Maximum Bidding Amount.
2. Check the current bidding.
Open the auction listing page and check the current bidding. If it’s already over your budget limit, step away from the computer. Otherwise, proceed to Step 3.

3. Refresh the auction listing page every minute or so.
Keep refreshing the page until four or five minutes before the auction closes.

4. Place your bid.
Place your Maximum Bidding Amount in the box labelled ‘Minimum next bid’ and (vital!) tick the AutoBid box. Double check that you’ve put the correct dollar amount in the Bid box and that the AutoBid box is ticked.

5. Click ‘Place Bid’.
You’ll be asked to confirm your bid. Check it, click to confirm, then walk away.

So what just happened?
You set a budget and used Trade Me technology to do the bidding for you, up to the maximum amount you specified. You either won or lost the auction, but the odds are in your favour. You will win more auctions using this strategy than with any other Trade Me buying strategy.

WHAT’S SO GREAT ABOUT THIS STRATEGY?

A number of things:

1. You won’t spend more than you planned.
Discipline yourself upfront and stick to the maximum you think the item is worth. Then walk away. Yes, you will lose some auctions using this strategy. But those are auctions where someone else is prepared to pay more than you believe the item is worth. Congratulate yourself — you didn’t let your emotions run away with you. And you’ve still got your money in your pocket, ready to bid another day.

2. You won’t set off a red flare alerting other bidders.
Just one early bid on an auction will draw other members like bees to a honey pot. ‘What are we missing out on?’ Surfers skimming through Trade Me tend to head first towards the auctions with bids, figuring there must be something going on, if others have been inspired to bid. The more bids, the more interesting the item looks. Bidding early also tips off any other potential buyers who had placed the auction on their watchlist, increasing the likelihood that they’ll be more active when the auction is about to close.

3. Trade Me’s AutoBid system does all the work.
As the name suggests, the AutoBid system is used to make automatic bids. When you enter the most you are prepared to pay as an AutoBid, Trade Me will keep you in the lead, by the minimum allowable bid increment, until you win the auction or your AutoBid is exceeded. You won’t have to sit there watching, making a bid, watching, bidding again, watching, bidding, chewing your fingernails. Relax — your trusty companion is on the job.

WHAT ARE YOU UP AGAINST?

There are four other primary Trade Me buying strategies:

1. Nibbling
Users place a bid early in the auction, just enough to take the lead. They don’t bid again until they’re outbid, at which point they nibble away with small increments, just enough to try to take the lead. How do you respond to these users? Ignore them. If they nibble away enough to push the auction beyond your Maximum Bidding Amount, good luck to them. Otherwise they’ll be left behind when your late bid kicks in just before the auction closes.

2. Pre-emptive high bid
Some members believe that if they bid high at an early stage they’ll scare away other bidders. They may — or they may simply raise the cost of acquisition for everybody else, if it’s a popular item. If other bidders are indeed discouraged from joining the bidding, that’s good news for your late bid.

3. Early AutoBids
These Trade Me members have mastered the AutoBid but place their bids relatively early in the auction, often because they’re not going to be at the computer when the auction is due to close. Unfortunately, their bid does increase the visibility of the auction to casual Trade Me browsers and they risk escalating the auction pricing well before the end game — essentially an automated nibbling process. Nothing you can do but stay out of the way.

4. Edge-of-the-seat late bids
More and more members — especially those who’ve been around for a while — adopt the late-bidding strategy, but often want to be there at the kill so they are able to place their own bids manually in the last few minutes. It’s a fine strategy if they really, really want that auction item, but they end up bidding against the machine (ie, your AutoBid), and either drive up your final cost before pulling out or win in the end but pay more than you believe the item is worth. What can you do about these people? Nothing much — but at least you’re emotionally detached.

What about other late autobidders?
There will be other bidders out there who use the same winning strategy we’ve outlined, either as a result of their own experience or (hopefully) because they read this article (or our TRADE ME SUCCESS SECRETS book) as well. What can you do about them?

In the end, it comes down to two elements. Firstly, be as informed as you possibly can about the true value of the item you’re chasing. If the item is worth more to you than to them, your Maximum Bidding Amount will be higher and you’ll win.

Secondly, when you set the dollar value of your Maximum Bidding Amount, don’t round the total off. If you’ve decided that $40 is what the item is worth, toss in another 27 cents (or 59 cents, or 83 cents) or some uneven number that will take you just above what would seem a natural cut-off point. That may be just enough to win you the auction because people typically gravitate to nice round numbers.

Sure, this strategy isn’t as much fun — or as adrenalin-pumping — as a down-and-dirty bidding war but winning within your budget makes it all worthwhile!

SO IS THERE A RECOMMENDED STRATEGY IF YOU ABSOLUTELY, POSITIVELY MUST WIN?

Sure there is. And you can either read about it within the pages of TRADE ME SUCCESS SECRETS — or sign up for our free newsletter [use the signup form on the right hand side of the page] and we’ll cover it in our next issue!

Related posts:

1. Making An Offer They Can’t Refuse You’re listing a product to sell. What price should you...

So 58% of us have used the internet  for buying things.

What sorts of things are Kiwis buying online? Again, Roy Morgan Research to the rescue:

Top Ten Products Bought Online
(within the last three months, Jan-Dec 2009)

• 18% Travel (tickets/accommodation)
• 10% Clothing/Shoes
• 9% Books/Magazines/Newspapers
• 8% DVDs/Videos
• 7% Music to download
• 7% Sports equipment/clothing
• 7% Gifts
• 7% Toys or Games
• 5% Computer Software
• 5% Other entertainment

Trade Me’s influence is clear — most of those products (largely excluding travel, which can be found on sister site TravelBug) are readily available through our favourite online auction site.

So have the dynamics of selling on Trade Me changed, now that there are more than a million and a half items regularly listed on the site?

Better, Faster, Cheaper (pick all three)

Once upon a time, sellers could get away with offering products on Trade Me that were EITHER Better OR Faster OR Cheaper. Now we need to try and deliver across all three metrics — competition in most categories is as intense on Trade Me as it is in the real world (if not more so).

And customers today are more demanding. They want perfect orders, shipped and delivered on time.

What’s a “perfect order”? According to Edward Marien of the University of Wisconsin, customers are looking for:

1. The Right Product in the
2. Right Quantity from the
3. Right Source to the
4. Right Destination in the
5. Right Condition at the
6. Right Time with the
7. Right Documentation for the
8. Right Cost.

US consumer products giant Procter & Gamble has its own definition of a perfect order: “a product that arrives on time, complete (as ordered), and billed correctly.” By P&G’s internal calculations, the company estimated that an imperfect order was costing it an average of US$200 each time.

The company found that additional costs for getting things wrong included:

• the cost of redelivery when orders were late;
• replacement costs if shipments were damaged;
• processing costs for quantity adjustments;
• and price and allowance deductions.

Those are industrial-strength concerns, of course. The Trade Me equivalent would be:

• new shipping charges if items are poorly addressed and then returned to sender
• the cost of re-supplying and re-sending goods lost or damaged in the post
• time lost swapping emails with an aggrieved buyer if the product isn’t as advertised
• the reputational risk of negative feedback if you don’t meet customer expectations
• the danger of further damage to your reputation if unhappy customers decide to tweet, blog or post to Facebook about their unhappy experiences with you
• oh, and visits to the Small Claims Court if things really get out of hand

All in all, it’s better to be an overachieving seller, delivering more than you promised.

Seven tips for improving your Trade Me sales

In many ways, though, delivering on The Perfect Order is really just about the hygiene factor — getting things right after the sale.

If you want to increase the percentage of your listings that actually sell, start with these seven tips:

1. Always include shipping costs in your listings.
   American research shows that one in five online shoppers abandon their purchase because shipping costs aren’t shown alongside the product costs. Today’s consumer doesn’t want any hidden surprises.
2. Tell visitors why they should shop with you
   Unless you”re offering a one-of-a-kind product that’s simply unavailable elsewhere, chances are you have competitors on Trade Me selling similar products. So don’t rely on the product attributes to do all the selling job — tell your browsers why they should choose you. Talk about things such as value for money, your excellent customer service record, the merits of your organisation (not just your product).
3. Include Customer Reviews
   According to Nielsen’s NZ Social Media Report (July 2010), 1.92 million Kiwis now look to their fellow Internet users for opinions and information about products, services and brands. It’s not that they don’t trust sellers — they just trust their fellow consumers more. So incorporate the words of your customers into your listings, If you have really flattering feedback, feature it prominently in your listing (don’t expect visitors to check out past praise in your feedback — they won’t, they’ll just look at the percentage of positive feedbacks).
4. Have a highly-visible, no-hassle returns policy
   For many potential buyers, a money-back-guarantee will make the difference in convincing them to go with you rather than a competitor. Yes, there is the risk that your products will be returned to you, sometimes in unsaleable condition — but if you’re delivering The Perfect Order (as defined above), your percentage of returned orders will be much lower than your percentage of increased sales achieved as a result of your returns policy.
5. Check Out Your Competitors’ Images
   What are your competitors doing well that you might copy (and indeed improve upon)? Take a look at their listing photos — are they sharp, professional, attractive? Do they show key aspects of the product that yours don’t? If you put your photos and theirs side by side, which look more interesting, desirable, show off the product features best?
6. X-Ray Your Competitors’ Words
   Start with their headlines. What features have they highlighted? What keywords have they used? Are they using subheads as well? Are there any headlines which sound better than yours? Then take a look at the main body of their listings. How compelling are the words they use? Are there any benefits they’ve emphasised that you’ve overlooked? Review what others are doing, and then polish up your own stuff.
7. Use Real-Life Stories to bring your listings to life
   It’s one thing to have nice marketing copy describing a product — but it’s far more compelling to see real-life tales from other customers describing how they use the product. Once you have a base of happy customers, invite them to contribute their stories. Even if most won’t, you just might find some real gems. [Okay, you can't do this with every product, but where you can, it's worth the effort].

Tip of the Iceberg

What we’ve covered here is only part of the story of what it takes to sell effectively in 2010.

If you want to join the 15,000 or so professional sellers that Trade Me estimates conduct business on the site, you need to dig rather deeper.

Here are just some of the questions that professional sellers have asked (and found out the answers to) and most of us don’t know:

• What can you find out about the buyers who are most likely to be buying on Trade Me?
• When are they most likely to visit Trade Me and push the “Bid” button?
• What are the hottest selling seasons and how can you take best advantage of that timing?
• What types of products sell best on Trade Me? And what’s particularly hot in 2010?
• Who are the top selling traders on Trade Me these days and what are they doing well?
• Where are the best places to source your products?
• How can you make your products truly unique?
• How can you really get noticed on Trade Me?
• What are the secrets of going viral and getting your listings heaps of traffic?
• How do you come up with Compelling Headlines and Sizzling Descriptions?
• What sorts of images will sell your stuff best?
• How can you get the most money for your products?
• How do you promote your listings to best effect?
• These days, should you be building a following through Twitter or Facebook?
• How can you try to squeeze an extra sale out of every listing with no additional promotional cost?
• How can you grow your Trade Me business without having a total meltdown?
• What are the best tools for automating your listings processes?
• How can you get your products out the door effectively and efficiently?
• How can you attract really favourable feedback from your customers?
• How can you turn today’s one-time buyer into a longterm satisfied customer?

If you’d like to significantly improve your Trade Me sales performance, allow us to introduce our new course:

Course TM-1: Advanced Selling On Trade Me

This is a seven-week eCourse providing a comprehensive masterclass on selling on Trade Me. The course presumes you are already familiar with the basics of selling on Trade Me (if there are a few gaps, you can do your homework with our own TRADE ME SUCCESS SECRETS book).

This is an ONLINE-ONLY course — you can take part from anywhere, in your own time.

This eCourse is conducted on a web-based e-learning software platform, enabling course participants to proceed at their own pace, accessing materials online. This particular eCourse provides content in a variety of multimedia forms, including videos, slideshows, flash-based presentations and PDF files. No special software is required to participate.

Course lessons are released weekly, for participants to access in accordance with their own timetables. Interaction with the course tutor is enabled through the platform software tools (with telephone backup if required).

TIMING
This eCourse started on Wednesday August 18, with the delivery to participants of Lesson One. New lessons are delivered weekly on Wednesdays.

LATE ENTRIES
Late entries are accepted within the first three weeks of course commencement (up until September 8).

COURSE CREATION AND TUTORING
This course has been created and will be tutored by Michael Carney, author of the best-selling book about buying and selling effectively on Trade Me, TRADE ME SUCCESS SECRETS (now in its second edition).

WHO SHOULD TAKE PART
Anyone who wants to sell as effectively and profitably as possible on Trade Me.

——————————————————————————–

The full course details are at http://trademesuccesssecrets.com/ecourses/ but here’s a sneak peek:

COURSE CONTENTS

INTRODUCTION

• The secrets of selling successfully on Trade Me
• The skills you’ll need to have (or hire in) as your selling operation expands
• Self-assessment questionnaire to determine if you have what it takes to be a top Trade Me seller.

LESSON ONE: ABOUT THE BUYERS

• What makes them buy (or not)?
• How are they impacted by current economic conditions?
• What are their motivations?
• How can trigger the urge to buy?
• When are they most likely to visit Trade Me?
• How can you keep watch on their current interests?
• Who are the most likely buyers for your products?

LESSON TWO: PRODUCTS THAT SELL

• Products that always sell well on Trade Me
• Items that are especially hot in 2010
• The best places to source your products in 2010
• How you can make your products truly unique

LESSON THREE: TOP SELLERS & THEIR STORIES

• Who are the top selling traders on Trade Me these days?
• What are they doing especially well?
• We also catch up with some old friends (featured in Trade Me Success Secrets) and ask them what they’ve learned since last we met

LESSON FOUR: GETTING NOTICED

• Why an auction goes viral and picks up hundreds of thousands of pageviews
• Tana Umaga and that handbag
• The Scary Washing Machine phenomenon
• Strategies that make auctions sizzle.
• The increasing importance of Twitter and Facebook for auction sales

LESSON FIVE: KILLER CONTENT

• What makes content remarkable, valuable and relevant?
• What makes it worth sharing?
• How to craft the words that matter
• Creating headlines that get noticed
• Pictures that make your item a must-have

LESSON SIX: HOW MUCH?

• What pricing strategies are most effective on Trade Me these days?
• What are the little tricks for squeezing more revenue out of the site?
• When are loss leaders (such as $1 No Reserve listings) appropriate?

LESSON SEVEN: GETTING THINGS DONE

• Systems are vital if you want to grow your Trade Me business (unless you simply don’t want a life).
• What’s now available to create your listings, post them quickly, get the products out the door — and then handle those after-sales deals such as feedback.
• We also look at how you can build a list of satisfied customers — and turn that happiness into additional revenues.

CONCLUSION

• How to turn all that learning into a planned sales programme. We give you the tools (or tell you where to find them).

——————————————————————————–

INVESTMENT

This seven-part eCourse is available for $297 +GST ($334.13 total). However we offer a special highly-reduced rate:

EARLY BIRD SPECIAL: SAVE $100

Pay just $197 +GST ($221.63 including GST) if you book and pay before MIDNIGHT NEXT WEDNESDAY SEPTEMBER 8.

Bookings are confirmed on receipt of payment, which can be by bank deposit or credit card. We can raise an invoice in advance if you need it.

If you’d like to pay by credit card, here’s the link to sign up for the Early Bird Special (via international credit card processor PayPal): CLICK HERE TO PAY.

We also offer a couple of instalment options, if you’d rather not pay up front:

1. Pay five monthly installments of $70 per month (total to pay, including GST, $350): CLICK HERE FOR THIS FIVE-MONTH PAYMENT OPTION
2. Pay twelve monthly installments of $30 per month (total $360): CLICK HERE FOR THIS TWELVE-MONTH PAYMENT OPTION

If you would prefer to pay  by bank deposit, or require an invoice before making payment, please send an email to info@successsecrets.co.nz with your contact details.

(The service provider will be shown as Netmarketing Services Limited in your transaction and on your credit card statement)

WHAT HAPPENS NEXT?

• Your booking will be confirmed (if you have not received a confirmation within 24 hours, feel free to email info@successsecrets.co.nz
• You will receive a series of emails from us on Wednesday September 15 with login and password details and Course Notes for Lesson One
• Further Lessons will be provided at weekly intervals for the duration of the seven-week course

Related posts:

1. How To Create Eye-Catching Listings Want to sell on Trade Me? There’s a bit of...

Although these days we’re all pretty comfortable with the notion of buying and selling stuff on our favourite auction site, it still requires a leap of faith: we’re sending money to people we don’t know, for goods we haven’t seen.

Without some variation on the Feedback system , we’d be completely in the dark about the trustworthiness or otherwise of those on the other end of the trade.

The Feedback system isn’t perfect – but it’s a very useful guide to other members of the Trade Me community and helps keep us honest. Imagine how much better behaved we’d be in real life if we all had to walk around wearing Feedback ratings given to us by our colleagues and customers!

We had an enquiry from a reader which raised some useful questions about Feedback on Trade Me:

C.U. from Martinborough wrote:

“I’ve been wondering why everyone who’s browsing my Trade Me feedback (which is good and part of the ‘getting to trust someone’) can actually see what I had purchased or sold. I don’t (a) think it’s anyone’s business, (b) think it matters and (c) find it helpful if you’ve (for example) bought something as a surprise present.”

Thanks for the question, C.U. Firstly, to the issue of the surprise present: I’ve sold a few copies of my TRADE ME SUCCESS SECRETS book to bidders who intend to give the book away as a present — I usually know in advance because people ask me to sign the book “Happy Birthday [O So Lucky Recipient]“.

On those occasions, I usually hold off giving feedback until I receive it from the buyer, to avoid tipping off the recipient in case they have access to the buyer’s Trade Me account. Similarly, you should specifically ask sellers to delay feedback if you intend to give the item as a gift.

To the more philosophical question of why feedback should link through to item details:

If you’re a buyer considering whether a particular seller is trustworthy, even when they have a number of positive feedbacks it can be really important to see exactly how they gained those feedbacks.

A whole industry sprung up over on eBay, selling downloadable items for one cent each, purely to build feedback. As a result, it has been really easy on eBay to build a host of positive feedbacks with minimal cost and little effort [although the rules over there have since been changed to try to stamp out the practice].

Trade Me don’t allow downloadable items to be sold on the site, so that particular problem is avoided here in NZ; but you can still amass positive feedback for limited expense by buying a pile of $1 items, paying promptly and requesting positive feedback. Your feedback total looks good but you haven’t actually done much to deserve it. So, when you set out to sell a high-value item, the feedback numbers can mislead us about exactly how trustworthy you are.

In such circumstances, it’s really important for prospective buyers to have the ability to see for themselves exactly how you acquired that glowing feedback score.

Also, from a purely commercial point of view, if I’m a potential buyer interested in buying a widget from you, it’s useful information for me to know how much you earned from earlier widget sales. I don’t want to overpay!

So what’s the best way to give Feedback?

Some pointers on Feedback etiquette, firstly for sellers:

• Ideally, post feedback as soon as you’ve posted the item off to the fortunate buyer. You’ve completed your part of the transaction. Also, it’s another reinforcement to the purchaser that their item is actually on the way [and you do have the opportunity to adjust or delete your feedback if problems arise later].
• If you’re a high volume seller, on the other hand, you’ll need to streamline the various parts of your operation so probably can’t afford the time to give instant feedback. In that case, schedule time at least once a week for posting feedback on all that week’s auctions; 15 minutes should be enough.
• Try to be unique and creative when you leave feedback. Yes, you could just create generic feedback statements, such as ‘Great buyer, quick payment, A+++’, but you’ll make a better impact with more customised feedback. You never know when a few thoughtful words will lead to new customers.

For buyers:

• Wait for the safe arrival of your item. If it turns up in good condition and matches the auction description, give positive feedback promptly.
• If there are problems, try and resolve them with the seller before you resort to posting negative feedback. It’s easy to get into a feedback escalation situation, both buyer and seller posting feedback flames. Try not to go there.
• On the other hand, if the seller is a ratbag and simply doesn’t meet his/her obligations, you should seriously consider giving that red-face negative. The Trade Me community is self-policing but relies on all members to do their part.

If, despite all the above, you do get negative feedback:

• Learn from it
• Mend your ways if necessary
• You do have the right of reply posted directly below the feedback – use it wisely
• You also have the facility to post feedback on the trader – but try to avoid retaliatory feedback
• And of course you can (and should) try to rectify the situation — the trader has the ability to remove the feedback they posted.

Trade Me will not review negative feedback unless:

• It contains swear words or vulgarities (but note that Trade Me reserves the right to determine what it considers swear words, vulgarities or defamatory statements)
• It contains defamatory statements
• It contains the trader’s contact details, phone number, surname, email address or other means to individually identify the trader
• The trader placing feedback has been permanently removed from Trade Me for misbehaving
• The feedback refers to an ongoing investigation by Trade Me, the police, or any other authorised party
• Trade Me is ordered by the court to remove it

If you feel that any feedback has breached these terms, you can report it to Trade Me (as long as it’s not more than 30 days old).

And one more thing: you can be held legally responsible for damages to the trader’s reputation under New Zealand law. So keep your feedback factual.

No related posts.

Selling on Trade Me is all about encouraging early bids and creating emotional attachments with the items. Your pricing strategy has a very real influence on whether early bidding is successfully achieved. To understand exactly what pricing strategies are right for you, you first need to understand the psychology of bidding.

THE PSYCHOLOGY OF BIDDING

Scenario 1: The high starting bid
You have a widget for sale. You bought it for $20 and you think it’s worth $40. You list it with a minimum starting bid (same as the reserve) of $39.95.

After a few days you’ve attracted some casual viewers but no bids. Then a widget-lover finds the auction and looks over the listing details. He sees the high starting bid price and wonders to himself:

• Is this widget a must-have addition to my collection or just a passing fancy?
• Should I bid for this or save my money for something special?
• Is it really worth $39.95?
• Why isn’t anyone else bidding?

If his widget-addiction is strong, he’ll make a bid. If your product description is mind-boggling and everything else stacks up, maybe that could tip the balance. Otherwise, no sale.

Scenario 2: The $1 No Reserve Auction
Same widget, different pricing. You still think the widget’s worth $40 but this time you start the auction at $1, No Reserve. Right from the start, you get more traffic — your widget shows up in the Widgets category and also in the $1 No Reserve Category. You attract a few casual viewers who have some interest in your item. Since the price is so low, they’ll place a bid on it if they have any interest at all, or if they think they can resell it and make a quick profit.

That mere act of someone making a bid transforms the fate of your widget. Now it attracts more interest — someone’s bid on it; it must be worthwhile. More people see the widget listing and more bid on it. There’s an increasing perception of the value of the widget (based on bidding behaviour which is really the blind leading the blind).

The bidding gets up to $10 or $15 when those with a merely casual interest stop bidding. Now your widget-lover comes along. When you started the bidding at $39.95, the price was high and he had to try to justify the purchase to himself. Now it’s a low price, obviously a great deal — and a host of others are interested in the widget. But our hero is a widget-loving expert and right away he develops a sense of ownership — ‘I know and understand widgets; this one is mine!’ He bids $20 and becomes top dog, leading the bidding.

Enter Widget Lover #2. He sees the widget, he sees all the bids and maybe recognises the user name of Widget Lover #1. The opponent effect kicks in — a bidding war erupts. Up, up, up goes the price, past $30, past $35, past $40. Widget Lover #1 finally gets the prize, for $49.77.

Why was Widget Lover #1 willing to pay more in this second scenario? Suddenly he really wanted it — but might lose out. The widget’s relative value had changed as a result of the auction itself. It wasn’t just a case of ‘do I really need this widget?’ any more. Now it was serious: ‘I have to win this auction — this is my widget. I’m the widget-lover.’

So how do you tap into the psychology of bidding to increase the potential return on your widget? There are five primary pricing strategies used by sellers at the start of their auctions:

1. STARTING BID = MINIMUM AMOUNT YOU WISH TO RECEIVE FOR THE ITEM
(Often flagged in listing headlines as ‘Start = Reserve’ or ‘S=R’.) This is a fairly straightforward pricing strategy: set the starting price (and the reserve) at the amount you think the item’s worth.

Recommended when

• You’re selling an item that appeals only to a very small niche market. If you’ll only get a small number of bids for an item, make them count — and make them profitable.
• You have absolutely no idea what the item is worth. List it for the minimum profit margin you want to get for it (after factoring in your acquisition cost).

2. STARTING BID = $1, WITH NO RESERVE (HEADLINE SHORTHAND: $1NR)
Simply start the bidding at $1 and set the reserve at $1. [NB: A word of warning with this strategy: be mentally prepared to let your product go for as little as one dollar. Not every auction proceeds according to plan.]

Recommended when

• You’re selling an item with wide appeal. If you’re offering a product that potentially appeals to a large target market, casual visitors will be willing to bid on your item at an early stage because it seems like a great bargain.

3. LOW STARTING BID + HIGH RESERVE PRICE
You could start your auction at an attractive low price (even as low as $1) with a significant reserve price (say $40) as protection in case bidding is too low.

Recommended when

• You want to attract as much interest as possible in your auction, but don’t want to sell the item unless the bidding reaches a minimum level.

4. STARTING BID = ENOUGH TO COVER YOUR PURCHASE PRICE AND LISTING FEES
This pricing strategy (where Start also equals Reserve) is a halfway-house between strategies #1 (high minimum bid) and #2 (no minimum bid).

Recommended when

• You previously opted for a high starting bid strategy but your item failed to sell. You’re not prepared to try a $1 No Reserve alternative because you wish to at least earn back your investment.

5. STARTING BID = PERCENTAGE OF LISTED VALUE (AND START=RESERVE)
With this strategy you price your starting bid in relation to an existing price guide or published price. For example, you might sell DVDs and start all of your auctions at 60% of recommended retail prices. Or you might sell a collectable item such as stamps or comic books, where price guides and catalogues exist and you can quote them in your listings.

Recommended when

• There have not been any recent trades in the products you’re selling, so there are no Trade Me benchmarks with which to work.

MAKING A FIXED PRICE OFFER
At the end of an auction, the seller has one final opportunity to offer the item at a fixed price. It’s a blunt instrument – price is the only variable under the seller’s control at this stage. If you just want to be rid of the item, offer it at that legendary “price they can’t refuse”.

Otherwise, choose a price that you’d be happy receiving — if someone accepts, it’s a done deal.

Related posts:

1. The Single Most Important Buying Secret The one essential piece of advice you need to know...
2. Making Money Online So you’ve decided to get serious about Trade Me and...

You can build a business on Trade Me by offering products at low prices — if you know where you can buy them cheaply enough. Conversely, if you’re a veteran collector of popular but hard-to-find items, you might be able to carve out a niche buying and selling the things you love (if you can bear to let them go).

But if you really want to succeed as a Trade Me seller, your best opportunity lies in offering unique, personalised items with a high perceived value, so that you’re effectively providing both uniqueness and a great deal.

Those unique personalised items can either be something you’ve created yourself or else could be otherwise ordinary products to which you’ve added personal value in some way. With the Trade Me online marketplace groaning with nearly a million and a half listings every day, you simply must have products that stand out — products that attract interested watchers and eager bidders and sell more profitably than the merely average offerings of your competitors.

One early trader who understood the importance of uniqueness was Arsenalboy, the seller of ‘the butt of the last cigarette officially and legally smoked inside Malt Restaurant and Bar in Auckland, 11.59 pm on December 9, 2004 before the smoke-free legislation came into force seconds later.’

First he gathered up the butt, risking life and lungs in the process. Then he created a certificate attesting to the genuineness of the artifact, and then framed and displayed the aforementioned items in a unique and pleasing manner.

Anyone could have done it. Arsenalboy did. The auction attracted what was at the time a precedent-shattering 139,627 pageviews and sold for an incredible, nicotine-stained $7,475.

There are scads of more recent examples (the Scary Washing Machine comes to mind), but hopefully you’ll see the point without us having to belabour it.

SO WHERE DO YOU START?
Adding significant personal value to your products can be achieved in many ways. Here are some of the most successful:

• Adding personalised extras to make ordinary items unique
• Finding unutilised niches for products
• Packaging multiple items into a single, more attractive package
• Offering your own unique knowledge in addition to the product
• Customising the Trade Me descriptions and product listings in a manner that reflects your own personality and style

If you’re struggling to think up ways to personalise your offerings, get some help. Grab some of your more creative friends and get them to brainstorm with you.

A QUICK GUIDE TO BRAINSTORMING
Where possible, get as diverse a range of participants as possible. You’ll end up with a broad range of experience and expertise and a more creative outcome.

• Choose a scribe to write it down, preferably on a whiteboard/flipchart
• Clearly spell out the nature of the problem to be solved (customising your Trade Me offerings), and specify any key criteria
• Keep everyone focused on the problem
• No criticism or evaluation of ideas during the session as this stifles creativity and discourages individuals from speaking up
• Try to get everyone to contribute and develop their ideas, including the quiet ones
• Have fun; be radical, impractical, foolish, free-flowing
• Don’t get stuck on any single train of thought
• Encourage participants to build on other people’s ideas

THE OBJECTIVE: TO MAKE YOU THE ONLY PERSON SELLING WHAT YOU SELL
That probably sounds optimistic at best, impossible at worst. But once you personalise your offerings — or at least personalise the way you present them — you will indeed be able to turn yourself into the only destination able to offer the brand called You.

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Keeping us honest
Incredibly, out and out fraud represents only a very small percentage of the tens of millions of auctions a year taking place on Trade Me. Yes, Kiwis are essentially honest and that’s a fabulous point in our favour. But the relatively smooth functioning of the Trade Me marketplace is mainly the result of deliberate engineering. Key components of this artificially induced honesty are:

• The feedback system, whereby traders report on each transaction, means that those who attempt to rip off the system are quickly and effectively tagged. Go directly to jail; do not pass Go.
• Trade Me’s decision to restrict selling to New Zealanders and those Australians who can offer payment via a New Zealand bank account has stopped the most blatant international fraudsters ripping off us 100% Pure Kiwis.
• Trade Me’s Address Verification process, whereby you are sent a letter at a specific physical address, plays a major role in confirming that you do actually live locally and aren’t simply pretending to be a resident of Aotearoa.
• Authentication, which requires members to make a small payment to Trade Me, creates a trail for investigators. As they say on TV, ‘follow the money’.
• Use of the New Zealand banking system (via Internet or telephone banking) as the primary mechanism for Trade Me payment has effectively removed anonymity from potential fraudsters. If you pay money into my bank account and then I send you dud goods, I’m no longer just user dudtrader, emailing from dudtrader@hotmail.com. You’ve got my (account) number.
• The SafeTrader escrow system provides both a reality check and a helpful process for dealing with valuable items. If you specify on your auction listing that you’re prepared to use SafeTrader, that’s another indication of your trustworthiness. If buyers actually choose to use SafeTrader, their money is safe until they’ve had a chance to inspect the goods they’ve just bought.

Overall, the Trade Me system works hard to protect its members. Yes, there are still problems but they’re on a much lesser scale than they might be without the protective coatings applied by Trade Me.

Even so, it’s best to keep your wits about you when you go down to the Trade Me woods. Any collection of activities that relies on both buyer and seller being on their best behaviour does represent a risk. Allow us to guide you through 25 tips that will help you minimise the risks as you trade your way to fame and fortune.

1. Before you even consider bidding, become familiar with the Trade Me website. Know and understand exactly what the Trade Me rules allow — and what (if any) protection you can expect, and under which circumstances (one way to learn all about Trade Me is, of course,  our Trade Me Success Secrets book).
2. Know exactly what you’re bidding on. Read the fine print carefully and if there’s anything you don’t know, use the Ask the Seller a Question facility.
3. Bid only on listings that feature photos. This will (slightly) improve the odds that the seller actually has possession of the product being sold.
4. If you’re suspicious, check other listings for similar photos. An easy way for a somewhat more cunning fraudster to achieve a veneer of credibility is to steal the photos from someone else’s listing.
5. If the photo looks particularly professional (eg, a crisp, clear shot with good lighting and/or background), then it may have been copied from an online catalogue. That doesn’t necessarily mean that the seller is a fraud; they might simply be saving themselves some effort, at the risk of copyright infringement — but it does mean that you can’t rely on the photo for proof of possession.
6. Try to determine the market value of an item before you bid. Check out previous Trade Me sales for similar items. Look in retail stores or read advertising fliers to see what it costs to buy the item brand new.
7. Find out all you can about the seller. Review their feedback page. If the seller has only a few feedbacks,  has feedbacks only on low-cost items or mostly has feedback for buying rather than selling, tread carefully.
8. Check how long the seller has been a member of Trade Me (in the About The Seller box on each auction listing it tells you the date they joined Trade Me). New sellers, or those who have been members for a long time but not as active sellers, should be viewed with more caution than those who have been well-reviewed sellers over an extended period.
9. Educate yourself about the items in which you are interested. Talk to knowledgeable sources, go to stores that sell such items, search online and get a better understanding of exactly what you should look for in such items.
10. If the item is valuable because of its colour, size or some other attribute that isn’t necessarily clearly shown in a photograph, ask the seller for another photo from a different view, or for the item to be photographed alongside a common household product so that you can get a better understanding of the most important characteristics of the item.
11. Ask yourself: Would I buy this if I saw it in a local store? Don’t get carried away just because it’s for sale on Trade Me.
12. Consider whether the item comes with a warranty and whether follow-up service is available if you need it.
13. Find out who pays for shipping and delivery. If you’re uncertain about what the shipping costs are likely to be, ask the seller before you place any bid. And watch out for extravagant allowances for postage and handling which can be a nice little earner for an unscrupulous seller – Trade Me’s rules essentially require shipping to be passed on at cost.
14. Review the auction listing for the seller’s return policy. Under what circumstances will they take the item back? If there isn’t a policy shown (and in most cases there won’t be), ask the seller for details.
15. Check the seller’s payment policy: cash, cheque, bank deposit or credit card? If the seller specifies cash only, that can be a warning sign — unless the item is a bulky one and the seller has specified pick-up only.
16. Ask the seller as many questions as you need, to gather relevant information about the item on display. Don’t place any bids until you get straight — and satisfactory — answers.
17. Remember, the seller is trying to make a sale. You can expect a certain amount of hype and liberal usage of descriptions such as ‘unique, rare, uncommon, vintage, retro …’ Ignore them.
18. When bidding, know in advance what you’re willing to lose if the deal goes sour. $10? $100? Understand your risk threshold and try to stay within that range.
19. Establish a top price and stick to it. If you decided the item was worth only a certain amount when you began the auction, it still is. Don’t get into a bidding war.
20. Save all transaction information. A paper trail could turn out to be important if you have to go to the authorities.
21. Take a screenshot. Save a copy of the item listing just before the auction ends, capturing the key image and description details, as a way of proving what was presented on the auction. Trade Me maintains images for a limited amount of time after the auction closes, but there’s nothing to stop the seller deleting the images immediately the deal is done. If you receive the listed item and it’s not in the condition shown in the photograph, you still have proof showing what the item was purported to look like during the auction.
22. Know and understand what form of payment the seller accepts. Decide whether you’re willing to risk sending your payment before you receive the product or whether — if you have the option — you should pick the item up.
23. After the auction, protect your privacy. Give out only the contact infor­mation required to receive your purchase; for example, supply a postal address in preference to a physical address and (only if a phone number is absolutely essential) a mobile number rather than a landline.
24. If you need to send emails to a seller with whom you are in dispute, have a friend read your emails before you hit the send button. Even if you believe you have been ripped off, do not threaten the seller. Communicate in a fair and reasoned manner. Be polite and explain why you are dissatisfied. People do make mistakes when listing items, and many sellers will be willing to resolve the problem when approached in the right way. When you open with an attack, you leave the seller no room to respond reasonably.
25. If the problem remains unresolved and you still feel that your rights have been compromised, complain to the appropriate authorities. If the seller is a professional trader you may be covered by the Consumer Guarantees Act and possibly the Fair Trading Act. Otherwise your best bet is your nearest Disputes Tribunal or even (in extreme cases) the police.

For more about online safety and Trade Me, see Chapter Three of Trade Me Success Secrets.

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Spending too much time on Trade Me? Here are ten ways to tell if your flirtation with Trade Me is turning into a serious business — and, if you are indeed in that position, ten other things you should know to help make that business soar.

BUSINESS OR HOBBY – DOES IT MATTER?

If you’re running a business, your business expenses are deductible but you have to pay tax on your income. If it’s a hobby, you can’t deduct any expenses but then you don’t have to pay tax on your sales either.

Inland Revenue’s point of view, paraphrasing its published advice on the subject: the same rules apply, whether you’re selling on Trade Me or offline. If you sell stuff you don’t want or need any more, there are usually no tax consequences. However, if you sell things on a regular basis you might be regarded as being in business and consequently should declare the sales for income-tax purposes.

THE TEN TELL-TALE SIGNS THAT YOU’RE RUNNING A BUSINESS ON TRADE ME

As a general rule you’ll be considered to be in business (and should declare and pay tax on your Trade Me sales) if:

1. You acquired your products with the purpose of onselling them

OR

2.Your intention is to make a profit from your selling activities

OR

3. If your business involves dealing in such products

Note the ‘OR’ — any one of these conditions is enough to lead to the conclusion that you’re running a business on Trade Me. A key factor that Inland Revenue will consider when evaluating your case is how often or how regularly you’re selling on Trade Me. A high feedback count in a short period of time may be good for business — but it’s also a good indicator that you’re actually running a business.

Business or hobby — it’s one of the ‘grey areas’ of tax law. Some of the other issues that Inland Revenue (and the courts) consider if they need to establish whether an operation is hobby or business are:

4. Scale of operations

If it’s relatively large-scale, it’s probably a business. If it’s small-time, it could be a hobby.

5. Volume transactions

Many sales make business work. Just a few sales suggest a hobbyist (or a really lousy businessperson).

6. Commitment of time, money and effort

If you don’t have a life any more, it’s a business. If you’re only occasionally engaged in Trade Me-selling, hobby status seems likely.

7. Frequency of sales

Regular = business; occasional = possible hobby.

8. Financial results

Large sums of money changing hands, whether profitably or not, indicate a probable business venture. Small dollar values suggest you aren’t very good at this, and if it’s not just a hobby then maybe it should be.

9. Type of activity

If you’re dependent on Trade Me for your livelihood, tick business. If it’s mostly for fun, tick obsessed.

10. Buttoned down

Do you have systems and processes set up for your Trade Me efforts? Quacks like a business to us. Or are your operations loose as a goose? Then you’re either feeding a hobby or setting yourself up for a major business quack-up.

CONGRATULATIONS, IT’S A BUSINESS!

So your operation fits one or more of the Ten criteria above? Well done! Time to get even more serious about doing business on the site. Here’s another top ten list for your collection, this time of  10 key points to improve the prospects for your Trade Me offerings:

1. There are four wholesale levels when it comes to manufactured products: manufacturer, importer, distributor and intermediary. The further up the chain you have to buy, the harder it is to make money when you sell. Try to get as close as possible to the original manufacturer of a product. How? If you see a product you think would be a profitable seller on Trade Me, check the markings on the product and/or the packaging for point of origin. Then pick up the phone, ask for sales and start talking likely volumes. At the very least they’ll point you in the direction of the nearest importer or distributor.

2. Don’t be an early adopter. Never buy new or soon-to-be-introduced products unless you’re absolutely certain they’ll sell on Trade Me (based on historical results for similar products).

3. Don’t buy fad products, unless you buy at bargain-basement prices direct from the manufacturer or importer and you’re buying right at the height of the fad (which, frankly, is unlikely).

4. All products have life cycles. First, they’re launched, full of hope and excitement. Ultra-hot new products, where demand exceeds supply, can sell on Trade Me for a premium — if you’re able to find a dependable product supply source and can get in when demand is at its peak. (Guess wrong about a product’s popularity, however, and you’re cooked. Anyone want to buy a Catwoman plastic toy — we’ve still got a few hundred left?)

5. Not all products survive the launch phase. But those that do tend to become established then turn into a steady seller at retail. During this phase you’re unlikely to match the buying power of the large retail chains, so it’s not a good time to sell this product on Trade Me (except for pre-owned versions bought for a song and resold at highly discounted prices).

6. In the next phase of the product life cycle, sales begin to dip as customers move on to the next big thing. Retailers will start clearing stock at discounted prices — but not at enough of a discount to make it worth your while buying up product. Once again, this is a poor time to buy for resale on Trade Me.

7. Finally, the products fall into the liquidation phase, flogged off for pennies in the dollar. This is when you’ll be able to make a decent profit — so long as the product still has inherent appeal for potential purchasers.

8. Don’t buy products in volumes that represent more than 10% of the total quantities available on Trade Me. You won’t corner the market; you’ll just take a bath.

9. Don’t buy a product if there are more than 10 competitors selling the exact same thing on Trade Me.

10. Never buy a liquidation or end-of-line item unless it carries a well-known brand name.

For a whole lot more about running a business on Trade Me, may we direct you to Chapter Seventeen of Trade Me Success Secrets, available through our Trade Me Store.

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Want to sell on Trade Me? There’s a bit of an art to creating headlines that grab peoples’ attention, photos that sizzle and descriptions that attract bids. Let’s explore each element in more detail.

A. THE HEADLINE

David Ogilvy (1911-1999) is a legend in the advertising world.  He has often been called “The Father of Advertising.” In 1962, Time Magazine called him “the most sought-after wizard in today’s advertising industry.”

Mr Ogilvy had this to say about the headline:

‘Headlines, more than anything else, decide the success or failure of an advertisement.’

What’s true for advertising headlines is also true for listing headlines on Trade Me. If the headline of your listing doesn’t stand out from its neighbours, visitors simply won’t bother to check out your item.

You have a maximum of just 50 characters — 100 if you choose to pay for a Sub-Headline (‘sub-title’) as well — available to you when you create a Trade Me listing headline. That’s not a whole lot of real estate when the headline has to do up to three different jobs:

1. Attract the attention of potential buyers by using the right keywords.
2. Communicate the pricing strategy at a glance (eg, $1NR, S=R).
3. Differentiate your product listing from every other listing out there for similar products.

1. KEYWORDS

There are two ways that potential buyers find stuff on Trade Me: browsing the categories or searching for keywords. Searching is the most popular method — not surprisingly, given that in a typical week more than a million items are listed on the site. To reach searchers, appropriate headline keywords are absolutely vital. Your listing simply won’t exist for them otherwise.

What keywords should you be considering? Start with the product name, the name of the manufacturer, the model or item number, slang terms for the product, even singular and plural forms of the product name. Also look for affinity terms: if you’re selling a tent, for example, you might also consider such additional terms as ‘outdoors’ or ‘camping’, to catch the eye of those looking for other items that are in some way related to your product category. Include whatever appropriate words you believe might catch the searchers and lead them to your auction listings. (NB: See Trade Me Success Secrets Chapter 14 for some tools to help you choose appropriate keywords).

2. PRICING

In Chapter Eleven of the Trade Me Success Secrets book, we discuss the most effective pricing strategies for your auction items. We don’t have time to go over those here, except to note that, whichever pricing option you choose, it may still be overlooked by Trade Me surfers unless you specifically feature it in the headline.

Why is that? So many listings, so little time, perhaps. Or more likely it’s because Trade Me is teeming with so many new buyers, who haven’t yet become wise to all the mysteries of the site. It’s not intuitively obvious that a $1 price tag and a little yellow flag can signal a terrific bargain.

Whatever the reason, listing the starting price strategy in the headline (eg $1NR if it’s a $1 No Reserve or S=R if it’s a Start=Reserve strategy) will help get your listing noticed by more potential bidders.

3. BEING DIFFERENT AND GETTING NOTICED

Keywords + Pricing — that’s fine as far as it goes, and most Trade Me sellers stop there. We want to go to the next step — standing out from the crowd. Otherwise how can we expect potential bidders to decide between:

• kelvinator Fridge Freezer
• Kelvinator Fridge / Freezer
• Kelvinator Fridge/Freezer
• Kelvinator fridge and frost-free freezer
• Frost-free Kelvinator fridge freezer
• Kelvinator fridge
• Kelvinator Fridge by Fisher & Paykel
• kelvinator fridge freezer

(And those were a sampling of the successful auctions!)

It’s time to learn a bit more about the art of the headline. It will be something of a challenge — after including keywords and abbreviated pricing you won’t have many characters left out of your 50 or 100 character total. Still, worth a try.

Eight Is Enough

Thankfully, even though online auction headline-creating is a relatively new discipline, we can draw upon a century or more of wisdom from the advertising industry, where headlines have long been crucial to making sales.

From that accumulated knowledge base, we’ve identified eight different types of effective headlines that will deliver results on Trade Me, specifically those that:

1. Promise a major benefit
2. Make an offer
3. Offer a solution to a problem
4. Give a warning
5. Flag your target customer
6. Use a testimonial
7. Make a news announcement
8. Give a guarantee

In the TRADE ME SUCCESS SECRETS book, we do give examples for each headline type, drawn from actual Trade Me headlines. Here, we just have time to describe the basic listing types, because now we’re onto the next component of successful auction listings:

B. PHOTOGRAPHS THAT SIZZLE

it’s still a surprise when we encounter a listing that doesn’t carry any photos. The expression ‘Russian Roulette’ springs to mind. We might be willing to bid on that widget when it’s only a few dollars, but if it costs much more than that, sorry, it’s not that we don’t trust you — but we just don’t trust you. Not with our money, anyway. No photo, no profit.

Want to earn a few more shekels from your auctions? Then allow us to guide you through the process of photo-enabling your listings. Say ‘Cheese’!

First, Take Great-Looking Photos

According to top photographers, it’s much easier for beginners to get great pictures by using natural or outdoor lighting to illuminate the product. The most suitable natural light is generally between 3pm–6pm, depending on the time of year. Set aside at least 15 minutes so you can take several pictures at the same time.

Set up a table next to a window and cover the table surface with white paper. Place your auction item on the table so that the side you wish to photograph is illuminated by the light from the window. Use a simple plain backdrop and place it behind your auction item. Suitable backdrops could be a plain bedsheet, fabric or piece of cardboard. Use a solid colour for your backdrop — an uncluttered background focuses attention on the subject, resulting in a stronger picture. (The backdrop colour should be the opposite of your item colour.)

Smooth out any folds or crinkles in the backdrop. Put your camera on a tripod facing the item you want to photograph. Move the item and the camera around until you’ve managed to capture the best possible lighting through the window. Once you’re satisfied with the camera position, make yourself a reflector (use either a sheet of white cardboard or some other card covered with aluminium foil) and place the reflector opposite the window so that it’s bouncing light on to the shadow side of your item. This will ensure that your item is properly lit. Do not use the flash. Otherwise you’re likely to end up with nasty glare, reflections and strange shadows.

If your camera allows, set the white balance to ‘cloudy’ — which will capture your image in more natural tones under these lighting conditions.

Now get up close and personal! Buyers want to see detail, so make certain your item takes up the entire frame. And (if appropriate) take a close-up of relevant sections of the item as well, to give buyers a better idea of its actual condition.

Detail is king — taking photos of any product numbers, brands or labels on your items adds substance to your offering and has the potential to increase the value of your bids.

If you provide multiple photos of your auction item you’ll normally attract more bids. You’ll have to decide for yourself whether it’s effective enough to justify paying the extra fee for more views of your product (we recommend you run some tests and see if it’s worthwhile in your chosen category).

Secondly, edit or process your photos

Once your photos are saved to your computer, you can often improve them with photo-editing software, which might have come bundled with your digital camera or scanner. If you don’t have such software, Windows users could try Google’s image editor, Picasa (a free download from picasa.google.com), or search for “image editor” at sites such as www.tucows.com or www.download.com. For Mac users we suggest iPhoto.

During the editing process, you should:

• Crop your image to remove unnecessary backgrounds
• Balance the contrast and brightness
• Resize your image to approximately 500 pixels wide by 400 pixels high (sometimes available as part of the Export process)
• Save or Export your edited image as a gif or jpeg file

Trade Me requires photos to be under 500 kb in file size so you may need to reduce your photos accordingly.

Thirdly, upload your masterpieces to Trade Me

The uploading of photos takes place as part of the List An Item process. Once you’ve entered your listing title and your description and selected the various components of the auction listing, you’ll be taken to a page where you can Upload a Photo.

The photo that you upload first will be displayed alongside your headline (if you choose a Gallery listing, which we strongly recommend). It’s also the photo that will be displayed with your main listing. So for that first image, choose the photo that most clearly captures the essence of your product.

C. THE DESCRIPTION

There are a million ways you could write a Trade Me description and none of them is wrong — but some will be more effective than others at attracting bids and driving  sales. The essential ingredients of a successful description:

1. A compelling description of the product
2. The offer — a reason to buy this product, now
3. All the product details, features and benefits
4. The fine print — terms and conditions of the sale
5. The close — ask for the order

Wrap all these elements in a writing style that reflects your personality and you’ve got yourself a successful sale.

In a nutshell, that’s what you need to do to create effective, eye-catching listings on Trade Me.

We’re out of room and out of time now, but if you’d like to explore the topic in a whole lot more detail, may we point you to Chapter Fourteen of TRADE ME SUCCESS SECRETS the book, available through our Trade Me store here.

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Effective today, sellers registered for Pay Now can accept payments up to $3,000 (increased from $1,000).

So if you’ve been holding back on bidding for one of our autographed Trade Me Success Secrets books because you couldn’t bid more than $1000 (and pay by credit card) — now you can.

Feel free to bid your heart out (up to $3000).

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WHAT SHOULD YOU SELL ON TRADE ME?
For some, the answer to this question is easy: sell products that you know a lot about – and indeed, are passionate about. That could be anything, from coins of the nineteenth century to slightly used designer clothing. If you know your products well enough to be a little, um, obsessed about them, then you’ve probably already identified what’s a good deal and what’s a ripoff anyway – and often you’ll already know where to buy your specialist products for a really good price.

For others, the choice of what to sell is not so clear-cut. Many of us have passions that don’t easily lend themselves to profitable trading. Collecting the various ‘Thomas the Tank Engine’ models, for example, can be great fun and all-consuming—but the stock easily available to Kiwi collectors may not have a high resale value, at least not on Trade Me.

And that’s the point of this particular article. We’re exploring what it takes to make some reasonable dollars online, not just earn some spare change by selling off those odds and ends cluttering up your garage – or by parting with precious items that you’ve spent half your life collecting.

HOW MUCH DO YOU WANT TO EARN ONLINE?
Before you even choose what products to sell, you need to decide how much money you want to make on Trade Me – and how much time you’re prepared to devote to doing so. When we interviewed some of the top Trade Me sellers for the TRADE ME SUCCESS SECRETS book, they told us they were spending 60-70 hours a week on Trade Me related tasks, and listing 200-300 items a week. That total suggests that they were photographing and listing an average of 3-4 items per hour (not to mention wrapping and despatching perhaps one item per hour, based on selling one in every three or four items listed*).

*Across Trade Me, typically the sell-through rate averages around 25%. In other words, one in four auctions usually close successfully. That response rate is much higher for specific categories, as you’ll see later.

Of course, those top sellers were trading fulltime on the site – your goals may be somewhat more modest. Even so, you need to identify some key metrics before you decide on your product selection.

For example, if you want to earn $500 per week (before tax) from Trade Me, but are only willing to spend 20 hours a week working on auction tasks, then the following maths might apply:

• 20 hours @ 4 items listed per hour = 80 items listed per week
• Sell-through rate of one sold for every 4 items listed = 20 items sold per week
• Profit required on each item to earn $500 per week = $25 each

If you’re selling one product for every four listed, then each product sold must also include a listing cost allocation for the three not sold. Those costs (within general auctions) can range from 25 cents to $5 or more per listing, depending on your selection of promotional items, subtitles and other options. So your calculations need to take those into account (x4). And then there’s the success fee of 6.9% per sale item (up to $150). All in all, you could be looking at fees totalling as much as $20 for every four items listed (and one sold).

In other words, in order to clear $25 per successful sale, you may need to earn at least $45 more than your purchase price per item. Clearly you need to choose (and then buy) your products very smartly indeed. You also need to be very careful when deciding which promotional options to choose, to minimise your costs but maximise the appeal of your auctions (for which advice, may we point you to Chapter Eleven of Trade Me Success Secrets).

CHOOSING A PRODUCT 1: THE PRICE RANGE
Continuing with our example, then, if you’re wanting to earn $45 per item, you could perhaps be looking at selling products with a perceived value of (say) $150, which you need to source for around $100 each in order to achieve your desired profit margins. That clearly rules out a wide range of products; but still leaves plenty of scope for the imaginative mind (refer to Chapter Nine of TRADE ME SUCCESS SECRETS for strategies to customise each product and thus improve its perceived value to potential purchasers).

CHOOSING A PRODUCT 2: STUFF THAT ALREADY SELLS ON TRADE ME
Every week, around 1.4 million items are listed on Trade Me. Every week, around 350,000 of those items sell. Trade Me collects and kindly reports on which items are more likely to sell than others, and you’ll find that information (updated monthly) here: http://www.trademe.co.nz/Community/SellThroughRates.aspx .

We’ve been tracking these statistics since Trade Me first started publishing them in late 2005 (just in time for the first edition of TRADE ME SUCCESS SECRETS), which was a great relief – we weren’t looking forward to crunching the numbers ourselves, which would have required looking at some fifty thousand pages (every week).

What we found in 2005 – and it’s a result that remains true today – is that Baby Gear and Mobile Phones are consistently the most sought-after categories on Trade Me. A higher proportion of products in those categories sell on a regular basis than almost anywhere else on the site.

Of course, not everybody can sell Baby Gear and Mobile Phones, certainly not all the time (and the categories would plunge in terms of success rates if everybody tried). So we recommend you look at the monthly sales results by category (through the prism of your price constraints, of course)  and decide if any of those are for you.

CHOOSING A PRODUCT 3: FINDING NEW PRODUCTS AND TRENDS

Even though online auctions can consume your every waking hour, there is, in fact, life outside Trade Me, radical though that notion might be. If you want to identify hot products and categories before they begin to become popular on Trade Me, you need to start your searching elsewhere. Ten suggestions:

1. The Trade
Manufacturers are constantly bringing out new products, as they look for ways to increase their sales and meet the evolving needs of their customers. Don’t wait for these new products to hit the public arena before you hear about them. Talk to industry experts, read trade journals, go to trade fairs and exhibitions.

2. Read
Haunt your local library, bookstore or news-stand. Some of the hottest new global offerings are written up in international news magazines such as Time, Newsweek and Business Week, especially in regular Hot Products issues. For techno-business trends, sample Wired, Fast Company and (locally) Unlimited and Idealog. For more technical products, Popular Science and Popular Mechanics provide inspiration. In the world of fashion, you’ll find the many international editions of titles such as Vogue will spark ideas. Whatever your product category, there’ll undoubtedly be international magazines serving that interest.

3. Watch TV
In particular sample some of the magazine-type shows on CNN and BBC World. You’ll get advance warning of hot trends brewing offshore. If you’re interested in the latest entertainment-related products, check out shows such as E! News Live, Entertainment Tonight and The Late Show with David Letterman.

4. Web Trends
If you’re interested in broader trend analysis, a number of global websites specialise in new trends. Inevitably, many of the trends thus uncovered are still some time away from commercial reality in New Zealand. However, for a sneak peek at some of the opportunities you might be considering for next year, visit (and, where available, sign up for newsletters at):

• http://www.trendwatching.com/
  This site and its thousands of trend-spotters scan the US, Canada, the European Union, Japan, South Korea, India, South Africa, Australia, Brazil and 50 other nations and regions for hot, emerging consumer trends and related new business ideas. A monthly email newsletter shares these global observations, insights and new business ideas.
• www.springwise.com
  A sister site to Trendwatching, Springwise scans the globe looking for new business-to-consumer ideas, concepts, innovations and ventures that have already proven themselves in local or regional markets, and are ready for expansion, partnership, franchising or copying.
• www.google.com/trends/hottrends
  Search patterns, trends, and surprises — what’s hot and what’s not, according to Google. Search statistics are automatically generated based on the millions of searches conducted on Google over a given period of time: weekly, monthly and annually.

5. Closer to home: Kiwi ‘what’s hot’ lists
‘What’s Hot and What’s Not’ lists make regular appearances in many local newspapers and magazines. While some of the selected hot items are fleeting at best, bizarre at worst, others will provide the seed of an idea for a profitable product to offer on Trade Me.

6. Any and all magazines
Even weekly magazines such as the New Zealand Woman’s Weekly, Woman’s Day and New Idea are great sources of inspiration for what’s current. Squeezed in between those tantalising tales of celebrities in trouble you’ll find:

• Advertisements about products that you could also be selling
• Stories on common problems facing readers, which may inspire you to find or create profitable solutions
• ‘How to’ features, eg, beauty workshops — needs found, for you to fill
• Fashion accessories, for which you might have access to a low-cost source
• Letters to the editor, citing problems and opportunities
• Home and garden pictures, which can inspire you to create your own versions and sell online!

7. Mailers and advertising ephemera
Tear down that ‘No Junk Mail’ sign on your letterbox and enter the world of sell, sell, sell! Devour those advertising circulars. Pay particular attention to products that have pride of place on the cover or have a full page inside that’s all about them. Those are products that will sell strongly at retail and — if you can source them at the right price — are potential sales champions for you.

8. Network
Talk to shopkeepers and shop assistants. Ask them what’s hot in their store. Those that have been paying attention can point you towards some best-sellers — and probably some surprises. A word of warning: take any overly passionate endorsements with a grain of salt. These people are in the business of selling and may have you in their sights!

9. Searching online
Once you have an inkling of the type of product you might sell, search online via your search engine of choice. What exactly are you looking for?

• The latest news on the product (for example, you may find that it’s just been superseded, recalled or enhanced – which can mean there’s an opportunity to buy up last week’s models at heavily discounted prices, wsell them at a not so heavy discount and make good margins)
• Possible wholesale sources, if you plan to sell new items
• Insider tips from those who love (or hate) the product
• Sales figures from other markets
• Articles or reviews on key features, benefits and failings
• A whole range of possible insights about the product
• Customer reviews, which tell you lots of useful info about the product (which you can use to inform your listings)
• Tweets alerting you to hot news about product releases
• And a whole heap of stuff you’d never find out the old-fashioned way

10. Number crunching
Many leading New Zealand retailers are public companies, and required to publish regular reports on trading patterns. Read their quarterly, half-yearly and annual reports and review any historical sales data that’s available in those reports (sometimes it’s in the accompanying commentary, explaining anomalous results). Use this information where you can to identify product categories that have been historically popular at certain key periods, eg, Christmas, Mother’s Day, Father’s Day, Valentine’s Day, Easter, etc.

CHOOSING A PRODUCT 4: WHAT ELSE?
Once you’ve identified possible products, you need to identify where to buy them, at a price that enables you make a decent margin. It’s never easy, but it is possible, as some of Trade Me’s top sellers reluctantly revealed when interviewed:

WHERE DO TOP SELLERS GET THEIR PRODUCTS?
We asked contributors to TRADE ME SUCCESS SECRETS where they get their products. They were understandably reticent — in many cases that’s the secret of their success — but we were very persuasive and managed to encourage a number of them to unlock their Book of Secrets, at least a little.

• One of our jewellery sellers attributes a large part of her success to an ‘Aladdin’s Cave’ of goodies which she discovered when she purchased a jeweller’s estate. The acquisition included items that had been in a storage cupboard for some 30-odd years. These were shop-new but very retro. These days she also sources products from offshore (from a variety of international suppliers based in England, Europe and the Americas).
• Another jewellery seller sources all of her products through the Internet. A lot of her ‘spare time’ is spent searching for products that no one else has, finding people with credibility and establishing good relationships with particular companies. She usually starts off purchasing a sample quantity of an item, to test the quality and the customer service of the company. If both measure up, she’ll start to build from there.
• Another top trader, who sells toys online, has a more direct source: a large extended family (12 kids!) so there are always unwanted toys, games, clothes, appliances, etc. The normal greeting is ‘Hi, is this any good to you?’ as they walk in the door waving whatever in the air!
• Yet another specialises in imported clothes and sexy lingerie. She reports that she does buy a little on Trade Me, but buys many of her products on eBay. Her particular niche: fashionable clothing and lingerie in larger sizes.
• A leading Australian Trade Me seller usually manufactures his own products (which include replica posters, pins and patches, replica and novelty currency — and Kiwi Million Dollar Notes), but sometimes gathers goodies from garage sales and markets.
• A Kiwi trader sometimes buys from ‘op shops’, and even occasionally buys sale items from shops. Her story is not atypical: many of the sellers we interviewed purchase products from local sources. A surprising number started out as hoarders, until they began drawing on their own collections to sell online. Friends’ stuff, markets and garage sales — as well as many of the other sources we identified earlier — were all fair game, and our top sellers were obviously able to make enough of a margin to make their Trade Me activities worthwhile.

As you can see from these reports from our experienced sellers, you can find resaleable products just about anywhere. If you just want to make a bit of pocket money, you don’t have to worry too much about regular sources of supply. But if you really want to build a sustainable business on Trade Me then you’ll have to put some serious effort into tracking down reliable suppliers, building relationships with those suppliers and (frankly) investing not just time but money.

For those who don’t particularly want to specialise in a single category, some other thoughts:

SOURCES OF SECOND-HAND GOODS FROM THE GENERAL PUBLIC

• School Fairs: If you have kids, start with the schools that they attend. If you volunteer yourself for the PTA organising committee, you’ll sometimes be able to wangle first look at the goodies to be sold, before the fair is open to the public. Of course, you will have to contribute your fair share of PTA work in return for this privilege.
• Flea Markets and Car Boot Sales: These highly localised markets attract a broad range of sellers, from the ‘clearing out the garage’ types to small-scale importers of knick-knacks from exotic destinations, but choose your purchases with care; some of these sellers you may never see again.
• Book Fairs: For those who believe they can earn good money from books, the country’s book fairs can be an inexpensive source of stock, but you’ll have to hustle; the best offerings are usually rapidly scavenged as soon as they’re put on display.
• Thrift Shops and Op Shops: We found 24 Salvation Army Family Stores and 20 St Vincent de Paul Society shops listed in the Yellow Pages; just some of the welfare organisations that operate these shops as community resources and worthy fundraising endeavours.
• Antique Fairs: Visit www.huntly.net.nz/antique.html for a list of antique and collectable fairs throughout New Zealand. If you know your antiques, these fairs can be valuable, but you’d be well advised to visit some of the more out-of-the-way regions if you want to unearth truly hidden treasures.
• Garage Sales: These humble events are always a mix of the good, the bad and the ugly. To find the real bargains, you’ll have to become one of those obnoxious individuals who turn up on the doorstep an hour before the scheduled start time. You’ll also make new acquaintances — the other earlybirds catching the worms, trudging along the same garage-sale circuits in search of the pot of gold hidden beneath the rainbow duvet.
• Inorganic Street Collections: The last bastion of conspicuous consumption, as neighbours demonstrate their affluence by discarding perfectly functional, um, kitsch for others to drive by, sample and adopt. Or, worse, leave untouched for (gasp!) the council to haul away. Alas, this acquisition process will not provide a steady flow of saleable inventory, but can provide a few choice items for the opportunist. Note, however, that in recent years councils have tended to pass regulations to deter activity by hawkers – check out the rules in your catchment area.
• And we would be remiss if we failed to mention the more regular supply of items that can be acquired if one is inclined to frequent the local Refuse Centre (that’s a rubbish dump with delusions of grandeur). Product quality might be an issue, but quantity and variety (certainly at a desirable pricing level) are assured.

LOCAL RETAIL OPPORTUNITIES
Trade Me is accessible to anyone with a computer and an Internet connection. As such, it’s a great shopping venue for buyers in more geographically isolated parts of New Zealand. Residents of far-flung outposts can now get access to products normally sold only in the larger metropolitan areas, while still enjoying their more pleasant lifestyles. Astute city-clicker sellers have noted this fact, and have been known to frequent their local retailers, buying discounted and sale items and reselling them online. Inexpensive products can often be found (with a certain amount of rummaging around) at stores such as:

• The Warehouse
• $2 Shops and other similarly named dollar stores
• Dick Smith stores (especially their repairs and returns tables)
• So-called ‘Category Killers’ — retailers that focus on a single product category, eg, Super Cheap Auto, Rebel Sport, Number One Shoe Warehouse
  

In fact, any retailer who has regular clearance sales should be on your list of potential product sources. If you know of retailers who have sales at a particular time of year (eg, Smith & Caughey’s twice-yearly events) you should add them to your calendar. New store openings are also a good source of bargain buying, but you need to be quick.

FACTORY AND OUTLET STORES
Although some ‘Factory Shops’ sell their wares at prices little different from traditional retail outlets, there are enough genuine factory shops out there to serve as a good source of products. The ideal factory shop will also be one of a kind and physically close to the factory it supports, so that few Kiwis have easy access to its lower prices.
SECOND-HAND DEALERS AND PAWNBROKERS
These classic institutions, which had the resale of second-hand goods pretty much to themselves in the days before eBay and Trade Me, can still be fertile sources of products to resell, although the dealers’ margins can mean it’s not always profitable to list them online. Second-hand dealers range in size and scope from single stores to national chains such as Cash Converters. Pawn shops occupy a lower profile in the retail sector generally, and are more likely to be found in areas bordering poorer households.

OPPORTUNISTIC EVENTS
There are, we are told, only two sure things in life: death and taxes. Estate sales, liquidations and bankruptcies are essentially the side-effects of both certainties, and while we naturally wouldn’t welcome such eventualities, they do tend to create opportunities. Typically, the recipients of deceased estates have little interest in many of the items hoarded by the dear departed, and will tend to dispose of them in bulk without worrying too much about the value of specific items. Similarly, receivers and liquidators are more interested in quitting chattels quickly than in realising optimal resale prices. Watch out for such opportunities: good profits can be made reselling the items individually.

ENDS OF LINE
We live in a disposable world of conspicuous consumption. Products with heaps of life still left in them are consigned to oblivion when new (sometimes only slightly) improved versions are introduced by manufacturers. But what happens to the old products? Where do superseded cellphones go to let their batteries run down? When the latest PlayStation rolls out the door, what happens to all those unused (but redundant) previous-generation consoles?

If you can find the right sources, perhaps some of those retired products could find new homes through your Trade Me listings. We can’t always afford the latest and greatest new product, and you could be performing a valuable public service by providing a new life to these obsolete senior citizens — and making a decent profit at the same time.

TRADE SHOWS AND CONVENTIONS
There’s nothing quite like the last day at a good trade show. Exhausted exhibitors, weary of the whole thing, just want to pack up and go home. But they’d rather not have to lug home all the products they still have on display, so they’re often willing to quit stock at a substantial discount. So if you intend to go to any tradeshow, make sure you leave it till the last day — and preferably the last afternoon. Then get ready to haggle.

RENTAL AND LEASING COMPANIES
Companies that lease out equipment, whether on a short-term or long-term basis, inevitably end up with used but often still serviceable products when the leases expire. They are bound to have existing arrangements in place to dispose of those goods, but will probably listen to a compelling alternative.

UNCLAIMED ITEMS
We’re a forgetful lot. We leave our belongings on trains and buses. We drop stuff into drycleaners or repair shops and never get around to picking them up. We send packages to the wrong addresses. We leave goods in storage. That’s why the companies reserve the right to sell unclaimed goods. To you.

CONFISCATED GOODS AUCTIONS
There’s something vaguely voyeuristic about bidding for goods that have been confiscated by police or customs. We tend to imagine all sorts of sordid tales about the former owners of these innocent household goods. Unfortunately, that morbid fascination also tends to make such auctions very popular, so bidding can be brisk for many items. Our best advice: get a catalogue in advance, if you can, and check out potential resale returns in advance. Failing that, turn up early, identify and inspect the items you could resell. If possible, work with a partner by cellphone to identify the prices such items are currently fetching on Trade Me. Subtract your costs and your margin and that’s your top bid price. Don’t bid beyond that point (sometimes easier said than done, if you happen to fall in love with a particularly choice offering).

CHARITY AUCTIONS
Auctions have always been a popular method of supporting good causes. They have become even more effective with the advent of Trade Me. Products are donated freely, all the dollars raised go towards the designated charities and everyone’s happy. Of course, not all products at the auctions achieve their maximum value. The high-profile offerings capture attention and bids, but some of the products slip through at bargain prices. That’s your cue.

TRADITIONAL AUCTIONS
While Trade Me auctions continue to draw more and more members, they’re not the only game in town. Traditional auctioneers still handle large quantities of goods, and they’re still a great place to pick up unexpected bargains. We recommend looking out for special-interest auctions (eg, those which involve the sale of complete stock and chattels of restaurants, industrial goods suppliers, contractors, etc). Typically, these auctions attract industry insiders looking for the specialist equipment available only at such auctions. The insiders generally have little interest in the everyday chattels common to all businesses — computers, fax machines, copiers, printers, desks, tables, chairs, etc — and such products can be purchased at much lower prices than if they were being sold at general office or computer-equipment auctions.

LOCAL WHOLESALERS
Where can you find genuine local wholesalers who might be willing to deal with you? You have to ask the right people. And that would be who? The local manufacturers who made the products or the local branches of multinational manufacturers for products made offshore. Specifically, you should call them up and ask for the sales department. Simply tell the person in that department that you own a retail business, and you want to sell some of their products. Ask them for a list of their wholesale distributors. They’ll have that information readily available, and should be willing to give it to you.

Next step: call the wholesalers they give you and ask about their terms — discount structure, minimum stock requirements, payment terms, etc. They’ll probably need you to set up an account, and you still have to deal with the issue of whether they will sell to a small home-based Internet business. Many of them won’t, so this research can take a great deal of time, but it is very important to your business that you do it right.

INTERNATIONAL WHOLESALERS
If you thought local wholesalers were tough to track down, just wait until you try to find genuine international wholesalers. The Internet is flooded with millions of people and organisations claiming to be wholesalers — a quick Google gave us 4,560,000 results — so you really will have to put in the hard yards. If you’ve identified a specific product you want to sell, the first steps can be the same as those we’ve suggested for dealing with local wholesalers: call the sales department at the manufacturer and find out their wholesale distributors. The next step, however, would be a lot harder: finding someone who’s willing to (a) deal with small orders; (b) ship stuff all the way over to New Zealand; and (c) overlook the fact that there’s probably someone in New Zealand who already has the distribution rights for this market.
LOCAL ONLINE AUCTION SITES
There are a small number of online auction and classified sites operating in New Zealand in competition to Trade Me. It’s fair to say these sites have been attracting relatively limited numbers of visitors and as a result the bidding on specific items is less frenzied. There may well be products listed on these sites that could be purchased cheaply and then resold on Trade Me.

INTERNATIONAL ONLINE AUCTION SITES
If you can cope with such issues as currency exchange, shipping costs and the higher risk of fraudulent activity, the world’s online auctions are a fertile source of products for you to resell locally. You should inevitably begin with eBay.com of course, and that may well occupy you enough. But eBay has many international offshoots. If you can handle languages other than English (or use the automatic translation options on Google’s browser bar plugin), you might well pick up some useful bargains on non-Anglo sites.

PRODUCT SOURCES ARE EVERYWHERE, BUT…
With a combination of knowledge, experience and imagination you can find potential product sources anywhere. But if it was easy, everyone would do it. It takes as much diligence and determination to turn an idea into a business on Trade Me as it does in any business venture.

PS That’s definitely all we have space and time for in this way-over-length article. If you want more, may we respectfully direct you to TRADE ME SUCCESS SECRETS, which covers the topic in even more detail. The second edition of this best-selling book is of course available for sale at our Trade Me store.

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