Product Sourcing Ideas – Dropshipping

When you are beginning your ecommerce business, one of the first hurdles is deciding on what you will sell.

There are a variety of places and means to source product – you need to decide which one will work best for you and your business. Today’s blog post will address a low cost way to enter the market: dropshipping

Sometimes this is the easiest and lowest risk way of getting into an ecommerce business. Simply put, drop shipping is the process of listing merchandise for sale that is owned and warehoused by a third party. Once you sell the merchandise, you notify the drop-shipper who will ship out the product to your customer for you. Sounds easy, right? The secret here is finding a RELIABLE and TRUSTWORTHY source with a product line that is IN DEMAND.

Most legitimate drop shippers will not require a minimum purchase or charge a monthly fee, but there are exceptions to even that rule. Do your homework – research potential drop shippers by entering the dropshipper’s name into a search engine and add the words “complaints” “sucks” “reviews”. Also research what the fees are and figure out if there is a market for their products and what the going rate is. Take a look at private web sites, ebay and Amazon to start. Figure out if it is worth it to sell their products after you factor in the fees that each marketplace charges, the fees from the dropshipper and the cost of the merchandise.

Next up: distributors

Feedback – Is it even necessary anymore?

Written by Cyn

Feedback is an issue that causes much angst to sellers both on eBay and Amazon.  Many times the negative feedback left is irrelevant to the transaction especially when the buyer has not even contacted the seller.  So I ask you – Is feedback even necessary in 2009?  How many buyers even review a seller’s feedback?  On Amazon the seller’s feedback is pretty much hidden, especially if the seller has the coveted “buy-box”.  It is also extremely lopsided since so few buyers actually leave feedback on Amazon.  On eBay many buyers do not understand the feedback percentages and don’t take the time to review the comments.  This is obvious when you see a seller with 89% feedback, yet all their 99 cent junk auctions have bids.

So what other mechanisms could replace feedback and help reduce scam sellers?  Both eBay and Amazon already have the mechanisms in place, they just don’t publish the information derived from these mechanisms to the buying community.

Amazon has the A to Z Guarantee and eBay has the Paypal SNAD and INR dispute consoles.  Just these programs could be used to guage a seller’s trustworthiness.  Yes, I know there are claims that are decided against the seller unfairly, but truely, if you are a professional seller what is going to be your percentage of these claims?  It should be extremely low.  By publishing the sellers number of transactions, as well as the number of claims decided against them, should be enough for a wary buyer to determine if they want to do business with the seller or not.

Or to take it one step further, the venues could be more responsible for their sellers.  Amazon tracks A to Z claims, amongst other criteria, and supposedly takes steps to limit sellers who do not meet their criteria.  eBay is attempting to do the same thing, but not with very good results.  If eBay would focus more on their seller relations instead of on Worst Match, they could come up with a logical and fair way to rate sellers and determine which ones are not performing to expectations.

To sum it up – What do buyers want?  They want to shop on eBay and Amazon and buy what they want and know they will receive what they bought in a timely manner.  They want to trust that eBay and Amazon are offering them products from reliable, honest sellers.  They don’t want to have to spend 2 minutes researching the seller before making a purchase.  I believe that buyers want the venues to vet the sellers, not make the buyers do that themselves.

So do away with feedback, monitor the sellers, and let the buyers do what they do best – BUY!

Too MANY Payment Options?

Written by Cyn

With the launch of Checkout by Amazon  I have to ask myself – is there such a thing as too many payment options?  When a buyer comes to my site, what are they looking for as far as payment options?  Currently I offer Paypal, Google Checkout and a merchant account.  50% of my shoppers choose the merchant account, 25% Paypal and 25% Google Checkout.

Would I not be shooting myself in the foot by adding another payment option?  Considering each payment processor offers reduced fees based on volume, by having too many options, and spreading that volume among 3 processors, I am paying higher processing costs.

When I only offered Paypal, I had a lot of abandoned shopping carts and even a few potential customers email me that they canceled their order because they couldn’t use their credit card directly.  So I’ve added a merchant account and have had no more abandoned carts.  I may even experiment with deleting Paypal and Google Checkout for a month.  See if I get any requests for them, or if my abandoned carts return.  If I were to process all payments through my merchant account, I could save quite a bit of money on processing fees with the reduced percentages.

So for me, Amazon Checkout is a non-event.  Too many hands in the pie.

How to Fix The eBay Feedback Fiasco

Written by Cyn

I applaud eBay management for taking steps to “fix” feedback on the site. The changes are in the right direction, but there are still some things that could be fixed to make feedback more fair for both buyers and sellers. After much thought, I agree with the proposal that sellers should not be able to leave negative feedback for buyers, IF the following changes are also implemented.

First, I propose that eBay do away with “neutral” feedback as it doesn’t do anyone any good. It is unfair to call something “neutral” that really doesn’t have a neutral effect. I understand that eBay feedback percentage is “Positive Percentage” which is why neutrals now effect the score. However, many neutrals are left as a form of communication rather than showing dissatisfaction on the part of the buyer, and therefore should not be used to penalize the seller.

Second, I propose that non-paying buyers be banned from leaving feedback at all. Isn’t feedback supposed to be only for members involved in a transaction? If an item is not paid for, that is NOT a transaction and therefore that buyer has no right to leave feedback. I understand that eBay cannot tell if a buyer has paid unless that buyer pays via Paypal. However, I propose that sellers be on the honor system to mark an item Paid in their My eBay when a buyer pays with a payment form other than Paypal. If an item is not marked as paid, the buyer would be unable to leave feedback. Should a buyer choose to pay with a method other than paypal, they will risk not being able to leave feedback if the seller does not mark the item paid. However, this would just be another risk a buyer takes when paying with other methods. In addition, it would encourage more buyers to use Paypal – and isn’t that what eBay wants anyway?

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Congratulations To IMA Amazon Sellers! You Helped Make Amazon #1 For December ’07’!

Congratulations to all the members of IMA who sell on Amazon. According to the Nielson ratings, Amazon had more unique visitors than Ebay for the month of December. According to an article by “The New York Times” dated January 14th, 2008: “Amazon has opened its site to independent sellers, while eBay’s auction model is running into problems with fee-fatigued sellers and buyers wary of fraud and counterfeit items.”

“Now the latest audience figures from Nielsen Online confirm that the e-commerce traffic crown has changed heads. For the month of December, for the first time, more Americans clicked over to Amazon.com (59,624,000) than eBay (59,374,000)”

To read the complete article including some very interesting comments in the NY Times.

Jennie

Why Ebay Sellers Should Check Out Amazon’s Marketplace

I was not one of the top 200 Ebay sellers invited to the Ebay Ecommerce Summit last week where Ebay announced the changes to Fees, Search, and Feedback. I was one of the lower volume Ebay sellers on the sidelines at home waiting to hear the long awaited announcements about fee reductions. As we all know now, the fee changes will probably hurt more Ebay sellers than they help. The changes overall made me ask myself how the new CEO designate of Ebay, Mr. John Donahoe, can make changes to Ebay’s platform that blatantly copy the Amazon platform without feeling a bit unimaginative. Mr. Donahoe has been at Ebay since March 2005. If you would like to check out his salary on Forbes Mag. Is Ebay going to become Amazon Lite?

The new final value fees (FVFs) for Ebay stores are just slightly less than Amazon’s FVFs are now. Not allowing sellers to leave negative feedback for buyers is similar to the Amazon feedback system. The star rating system is similar to the Amazon seller rating system. Amazon already has a relevance based customer search that sounds like the “finding experience” Mr. Donahoe has been working on, and which is scheduled to be rolled out to Ebay this year. My guess is it is time for us all to examine the Amazon sellers marketplace because the new CEO-designate of Ebay seems to want the Ebay buyers experience to be just like the Amazon buyers experience, and will probably continue to imitate Amazon features.

Jennie

The eBay Flip Flop

Wasn’t it just 2 years ago that eBay wanted to bring back the “vibrancy” to core by encouraging 99 cent starting bids? In 2006 they decreased the listing fee for the 99 cent starting bid while increasing the costs for eBay store listings. eBay felt the need to go back to their roots – the auction format.

So it was with shock that I read the new fee structure. eBay’s 99 cent auction sellers are no longer the darlings of eBay. They have been hit the hardest by the new fee structure. Because the traditional 99 cent auction sellers generally have a very high sell through rate, they are being hit hardest by the large increase in Final Value Fees.  Although their insertion fee has decreased by 5 cents it’s nowhere large enough to make up for the 3.5% increase on the backend.

Yet Fixed Price sellers, who generally have a low sell through rate, have seen their insertion fees decrease greatly, especially the majority who use gallery.  They still pay the increased FVF, but the decreased insertion fees will more than make up for the increase in FVF’s for those seller with sell through rates below 50%.

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The Amazon Return Policy-Raising ??? Buyer Expectations Internet Wide

An odd thing happened this holiday season on Ebay. I had an buyer that decided the Amazon return policy was much better than my return policy. I have to admit that having 30 days (Amazon’s policy) to return an item is much better than 7 days (my policy), and I did refund my customers money when the item arrived 30 days after we agreed she would return the item. But the incident got me thinking.

Is Amazon setting the standard now for internet buying customer service? Other Ebay sellers have reported that buyers are asking to return items up to 60 days after a sale. Some Amazon sellers are reporting packages being returned from Amazon buyers more than 30 days after the buyer received it.

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Discrimination & Anonymity in Internet Selling

Ebay Amazon LogoOne of the most interesting aspects of internet selling is anonymity.  The mild mannered insurance salesman sells hardline harley motorcycle gear on the internet.  The shy Ohio housewife sells racy red silk lingerie as Mimi an immigrant from Paris France.  Because the buyer on the internet can’t see a balding head, or mousy dress, and make any assumptions.  This type of anonymity has positive and negative consequences to an internet business.

The positive consequence of anonymity is that discrimination, or generalization due to a sellers appearance is all but eliminated, but it also creates a problem.  It is difficult to create buyer trust for an internet product, or seller.  In a typical brick and mortar store a wary customer can converse freely, and develop a bond with a seller leading to a purchase.  On the internet, there are very few opportunities for conversation and/or communication of any kind before purchasing.  So, for an internet seller, the buyer will trust you as much as they trust the venue you sell in.  In other words, we internet sellers are at the mercy of the reputation of the venue we sell in.

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