Take Your EBay Business to the Next Level

Obviously eBay has 'hand held' no end of new start up businesses and, effectively created a whole new generation of 'anyone can do it' entrepreneurs. Many people should thank eBay for the education they've given over the years.

But the time comes for most businesses when they realise eBay are too expensive and excercise too much control that it can seemingly inhibit the future growth needed to turn a hard working sellers business that "gets by ok" in to the upwardly spiraling success story that seemingly "only happens to other people". So here I am going to offer up some very simple things to consider when it is time to take your eBay business to the next level.

In the UK, the British Army use a saying; "If you fail to plan then plan to fail". It is also one of the best pieces of advice you will ever get in your business life. So it goes without saying that the first step in progressing your business is to plan. And in order to plan we need some basic information to hand about our business.

So what do we need? As this is a brief generic article confined by space and not targeted at a particular type of business, I will keep it simple so this analysis and projecting needs to be fleshed out and tailored to the specific factors as they apply to your business before it becomes truly meaningful.

First we need to understand how our business is doing. This means analysing the last few months data from our eBay business. We need to know the volumes of product we are selling, the margins we are earning and the costs involved.

How much did you spend on sales inventory in the past three months? How much did you realise in actual sales in the past three months? How much did eBay fees total for both listing and sales in the past three months? How much were your additional costs in the past three months? (Paypal, Postage, Packing materials, any hired help etc.).

If there has been a major change in your trading patterns within the last three months then choose the most appropriate time scale to analyse. Once you have these figures you can go on to calculate a realistic model of your business performance and find benchmark monthly figures to work with.

For the sake of this article let's assume you achieved an average of $6,000 per month in sales from inventory purchases costing an average of $3,000 per month. From that you usually pay about $650 in total eBay fees. You then lost about $180 to Paypal and a further $200 in other costs. So our margin is $6,000 minus $1,030 costs and another $3,000 inventory purchase which equals something like $1,970 gross profit for you.

Now we know where we are, it is time to plan where we can go. So how do you grow a business like this?

You may think there isn't enough hours in the day to do any more sales and, without hiring more help, that may be true. But the first part of the process to get your eBay business to the next level is reviewing what you already do to maintain existing business levels more efficiently and increase earnings without having to work harder or longer.

The time has come to contemplate letting go of eBay's hand. They've served you well and done many of the awkward tasks of selling online for you. You've paid their fees and there's no room for sentiment about this if you want to get your business to the next echelon of success. Just as eBay don't really care about you as an individual, there's no room for you to feel sorry for eBay because you are moving on. With the experience and knowledge you've had on eBay, and paid eBay for, you are now much better equipped and ready for more success.

By now you can see what eBay has been charging you each month. But let's analyse what it is you've been paying for. Basically they have provided a web page for each of your sales listed and the checkout process for buyers to get payment to you. In truth there are many websites that offer these services at a much cheaper cost than eBay. But what eBay have been doing for you, which is by far and away the most valuable service they provide, is get buyers to your products. You've been listing in the eBay marketplace and eBay have made sure there is plenty of people in that marketplace to see your products. This one part of the eBay service is the biggest reason sellers of all types, sizes and experience cannot let go of eBay. They cannot see how their business can succeed without the spoonfed eBay buyers. Now eBay aren't at all stupid and they realise how difficult it is for sellers to leave once they've become dependent on eBay supplying most of their sales. They also know, regardless of the fury each of their fee increases brings, few sellers will know how to leave eBay and their ever increasing fee levels behind.

So to get to the next level we have to significantly cut our costs making our existing sales performance much more profitable. How do we do it? Many will want to consider their own independent website and that is a very live option to consider. But for the purposes of this article I don't want to assume a seller has any more web skills than are needed to operate an eBay type business.

By now we should have realised that we need an alternative venue, that costs a lot less than eBay, to provide the listing and checkout facilities. There are numerous sites offering these services. I have personal experience on a number that do a fine job and even offer facilities that eBay don't. It is definately worth investigating the options on offer but,as you do this, I offer a quick tip. Be very cautious of those eBay alternative sites that make a song and dance about offering an entirely free service. I assume you are already wise enough about business to realise that a service with no income is probably going to be somewhat short lived.

For the purposes of this article I am going to talk about www.Tazbar.com for no other reason except I use them myself and therefore know their current fee charges.

Tazbar will enable all the listing and checkout processes you need - and offer a few facilities on top compared to eBay. For example Google checkout is integrated in addition to Paypal, you can schedule start and end times/dates, use classified adverts to point people at your listings and automatically relist unsold items as a default rather than an action on your part. These extras are not unique to Tazbar, you will find many of the better eBay alternatives offer such facilities.

But most important for now is the costs. To use Tazbar regularly you pay a monthly subscription rather than fees for each individual item. I will assume you want an account that enables you to have up to 2,000 sales listings on the site at any one time. The cost of this is currently $8 or £4 per month depending in which currency you wish to trade in. That is it. There are no indvidual listing charges or final value fees to pay. This subscription covers all the basic features you would expect and even a few that eBay consider as chargeable extras (scheduled starts etc.). When you compare that price to the eBay fees you pay each month I am guessing you can start to see how your existing business can suddenly become a lot more profitable.

But let us remember the age old saying you've undoubtedly heard the eBay spin merchants quote; "eBay is where the buyers are". This, to a very large extent, is true. The reason the buyers are there is because eBay pays fortunes to get them there. Adsense adverts, TV campaigns, affiliates, PR consultants, in fact you name it and eBay probably do it if it will get visitors to their website. This is why eBay fees are as high as they are - you can see it isn't the cost of the listings and checkout and it isn't all spent on the eBay Execs salary checks!!

So this is the second part of the planning process and the most important part too. We've got all the replacement facilities in place but we must make sure we get the buyers looking too.

We've now reached the point where most inexperienced or,being blunt, less capable business owners start to fail. Not having had the benefit of any experience outside eBay they naively assume the new venue they've chosen is going to deliver as many customers to their door as eBay did. So let's clear that out of the way now. They will not. Plain and simple.

Take a look at the difference between the eBay fees and alternative venue costs. Our pretend business from earlier was paying $650 each month to eBay and we've just learned That tazbar will charge us $8. So please forgive Tazbar if they don't match eBay in customer delivery! They do automatically upload your inventory to Google Products and they do get your pages indexed by search engines. You can expect to get a few sales via their own search engine but you still need to make up a large proportion of the customers that eBay wont deliver in future. But with $642 already saved, I think it fair to say we can do something about that.

How we choose to advertise your product listings now depends on factors only you know. But, for most businesses, Google Adwords will be a good source of sales traffic. By setting up Adwords campaigns on Google you can get qualified visits from people who are interested in your products and probably ready to buy. There is plenty of advice available on the Google site to help you but I will offer a little help now for the purposes of this article.

Do not bid on the single word obvious keywords. Not only will you need to bid high against many other advertisers for those words, you will get far too much exposure to people not sufficiently qualified as being definately interested in your product. Learn how to create keywords that are in fact keyphrases. Think of the specific phrases people would type in on a Google search if they were looking for your products. It's not just the product name but adjectives that might describe them too. The effect of going for long keyword phrases is much reduced competition and much cheaper clicks. Do your research well and keep analysing results and you should get to the point where each click costs 10c or even less and they are so well qualified to your product that a 20% conversion of visitors to sales is not at all impossible.

Those stats are flexible and you need to experiement and tweek your Adwords campaigns constantly to improve results wherever you can. But for the sake of this article I will assume the lower end of my estimates and say you can get your clicks for 10c and achieve a 10% conversion rate to sales.

Now comes the backward math bit. At the moment you are doing $6,000 in sales each month. Assuming your product sells at an average $25 this means you are doing 240 individual sales each month on average. To achieve that number of sales via Adwords at a 10% conversion rate you will need 2,400 click thrus. At 10c per click this means budgeting $240 each month to get the buyers to your new venue. If you were to find 20% of visitors convert to sales then you would need 1,200 clicks costing only $120 per month.

Although there is a little more to gain yet, we've now planned to simply transfer from eBay to a cheaper but equally efficient venue and use the power of Google to find the buyers instead of eBay.

If you do a good job with Adsense you may do an awful lot better than I have illustrated but, for the purposes of this article, it was better to use the lower sales conversion percentage and higher cost per click. Even with these less attractive assumptions, we have replaced everything eBay was charging $650 a month for at a total of just $248. So without doing a single sale more than you have been, you've just planned how to increase your personal gross profit from $1,970 per month to $2,372 a month - or an increase of well over 20%.

You've probably realised now why so many people struggle when they choose to break their tie with eBay. The most common reason being they simply didn't realise they needed to replace the eBay buyer trafic. Now you can see how to overcome that problem quickly and cheaply, you are ready to complete the climb to the next level of business profitability.

All we have done so far is maintained existing sales figures while increasing your bottom line by 20%. But you now have Google driving customers at you all day, every day. If you have capacity you can increase this flow of buyers simply by increasing your advertising budget. More visits will mean more sales and the virtuous circle begins again. You may have a product where you can cut inventory costs the more you order and sell. If that's so your business growth curve will be even sharper.

Although we've not relied on it, your planning should also include emailing (or even snail mailing) your existing customerbase built up during your eBay trading. These people need to know where to find you now and, if several buy again because of this reminder, you can either decrease your Google budget to compensate or - if you can cope - increase sales. As I said earlier, you will find after a few weeks trading from the new venue that some buyers start to find you via the site or search engines. Not in eBay volumes I accept, but for each buyer that comes this way, money can be saved at Google or you can increase your sales.

Space prohibits me from offering other examples of advertising methods you can employ to attract interested buyers to the listings on your new venue but, I hope, this article should have given you the basic knowledge you need and the motivation to plan the next stage of your business.

Remember, eBay has served you well and, having paid their fees in return, you can part on good terms. But to take your business to the next level means taking personal control and responsibility for your advertising. Do it well and you will prosper.

We arrive at the end of this article having planned to make an existing business realsie more than 20% more gross profit without selling anything extra. Now each sale is that bit more valuable to you, start thinking about increasing sales capacity. But also, as you reach for pen and paper, always remember:

IF YOU FAIL TO PLAN THEN PLAN TO FAIL