jump to navigation

What does it take to sell stuff on Trade Me in 2010? August 19, 2010

Posted by Michael Carney in : auctions, trade me, trademe , 2comments

This internet thingy is catching on. The latest (August 2010) Media Trends Report from Roy Morgan Research shows us that buying stuff online is now pretty widespread in New Zealand:

used-internet-for-buying

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)

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:

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

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:

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

LESSON ONE: ABOUT THE BUYERS

LESSON TWO: PRODUCTS THAT SELL

LESSON THREE: TOP SELLERS & THEIR STORIES

LESSON FOUR: GETTING NOTICED

LESSON FIVE: KILLER CONTENT

LESSON SIX: HOW MUCH?

LESSON SEVEN: GETTING THINGS DONE

CONCLUSION

——————————————————————————–

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?

Post to Twitter

Selling on Trade Me: Business or Hobby? February 3, 2010

Posted by Michael Carney in : auctions , add a comment
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 things you should know to 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.

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.

Post to Twitter