Beginner’s Guide to Starting an eBay Business 2020 | Step by Step Guide – Part 2
Transcribe of “Beginner’s Guide to Starting an eBay Business 2020 | Step by Step Guide – Part 2”
Okay, so questions that come up a lot, before we launch into this is people come to me all the time say, “Neil, I’ve never done this before. Is that okay?” Well, none of us had ever done this before, we’re all brand new. I hadn’t done it, no one had ever done it before. We all came out like this, some just not quite so happy.
We’re all born blank pages, we all had to learn but we all can learn because a path has already been laid
All born blank pages, we all had to learn but we all can learn because a path has already been laid. You don’t have to reinvent the wheel. It saves you a lot of time if you don’t reinvent the wheel. After all, that’s why I went to school from day one. Know, my dad has always irked me at saying, “You know, don’t copy. You’ve got to do something different.” Then I would say, “But dad, you to go to university, what’s that doing?” All I’m doing is ripping off Weinstein and everybody else. So it’s you know, where does it end? Anyway, so tonight you’ll see, like everything in life, barriers to entry. And these are awesome, scares everyone away but they’re awesome.
Every time you see a barrier to entry and it takes a little bit of work to figure it out, you just left behind a massive amount of your competition
Because every time you see a barrier to entry and it takes a little bit of work to figure it out, you just left behind a massive amount of your competition. So every time you see a barrier to entry, celebrate it. It’s awesome, find out how to get through it, there’s always an answer. And bingo, you just left a ton more of your competition behind. So go every direction where there’s a hurdle. That’s where you should be focusing. Don’t go the easy way. The easiest thing to do on eBay is to go and sell USB cables, iPad cases, iPhone cases ’cause they’re cheap, they’re small and that’s what every man and his dog does.
Why do some people succeed at building full time businesses and others don’t?
Top questions, why do some people succeed at building full time businesses and others don’t? Why has Russel made it to seven digits? It’s the same reason why some people finish jigsaw puzzles and Lego sets.
– [Male] They don’t quite.
To win the game, you need to stay in the game long enough to win the game
– Exactly, they don’t quite. To win the game, you need to stay in the game long enough to win the game. It’s the secret of success in everything in life. To win the game, you just need to stay in the game long enough to win the game. The path has already been paved. So the great news is this, can you compete? And this is what scares so many people away, can you compete? Over 90% of eBay sellers guess it all. They all use what we call “Best Guess” marketing strategies. They just guess it all, they wing it all. If you learn to do it properly, you can beat over 90% of your competition. It’s always going to be that way.
Today we’ve got technology so you don’t need to guess anything at all
Many ways, people are too proud to learn. They just want to figure it all out and just waste so much time. Today we’ve got technology so you don’t need to guess anything at all. And this is why you don’t guess. If you look at almost any product, we have what’s called the six to 10 different ratio. What that means is the number one seller of this one item over the last 90 days has sold 2,089 items. Gave them a revenue of 278,000. The tenth seller of the same item, has sold only 759, giving a revenue of only 56,000. If this guy, this seller, tuned their listing up, bingo, they’d be up here. But do they tune them, no. They just list it up and leave it forever.
Just by tuning your listings
– [Male] What do you mean tuning it up?
– Tuning’s optimization, yeah.
– [Male] And what did you say that was called?
– This is just the difference between, take any item and it’s going to be always the same between six and 10 times more sales between number 10 and number one. Just by tuning your listings, it’s learning how to tune your listings. So that’s where you should focus on, it’s a huge difference. And if you’ve got-
– [Male] I’ve noticed that he’s not He’s almost second most expensive.
– Yeah, it’s not always price. So, and that’s with one item. That’s, you know, if you’ve one item, you might to have 10, you might have 500, you might have 1,000, you might have 10,000 listings.
The difference in size you’re going to get if you tune your listings, massive
Look at the difference in size you’re going to get if you tune your listings, massive. So another thing that slows down beginners is, so many people come to me and say, “Look, I’m almost there. I just got to do one more course on Windows, one more course on Microsoft Word, another course in Excel, another course in this and that.” Don’t waste your time, learn the 5% that you need to know and nothing else.
Don’t waste your time, learn the 5% that you need to know and nothing else
Just like this, iPhone 5 For Dummies, you know, that’s an old book obviously but you know, I’m sure everyone here will agree, if you want to know how to use your phone, if you do can do five things, make a call, receive a call, send an SMS, receive an SMS and take a photo, you pretty much cracked your phone. You don’t need to know everything else that’s in that one inch thick book. It’s the same with everything here, just learn what you need to know and nothing else. Don’t waste your time. Like your car, if you want to go home, you don’t need to know exactly how your gear box works.
So you can use software and VAs
All you need to know is how to put it in drive if it’s automatic. Can I automate the business? 100%, this is just a fraction of the software that’s out there today. There’s new software coming out all the time to automate your business. So you can use software and VAs. VAs of course is virtual assistance. So do you need inventory at home? No, you do not need inventory at home anymore.
If you want to import, you can use third-party logistics companies, or 3PLs
You could use, if you want to import, you can use third-party logistics companies, or 3PLs. We use, in Australia, it’s best to use ones in Sydney, like in Western Sydney. Like there’s many, Shipway, Coghlan, Next Logistics, etc, etc. So you send your goods there straight from your supplier, they hold them and they pick, pack and ship them. You can do it all over the world. Like for instance, for our U.S. operation we use a company in Buffalo New York called Webb Logistics. We do exactly the same things.
You do not need any staff in your house
Soon as an item sells, it automatically send them a file, what’s called a CSV file and then they instantly start picking, packing and shipping it same day. Okay so, do I need to have staff in my house? No, you do not need any staff in your house. Hurrah to anyone who’s done that. Now, I’ve talked a lot about exit strategies in these past events but it’s really, really, really important that you do this. And the idea of it is, you build a business so you can sell it. But whether you sell or not is irrelevant.
You build a business that runs completely and utterly without you
The idea of it is, you build a business that runs completely and utterly without you. So if you do sell it, a buyer can say that you’re not required to be in that business. And the awesome thing about that is, you build a business that runs completely and utterly without you so you can have a life, really important. So it must run completely without you, you must keep clear records, you must use some kind of an accounting system. On that, we use Xero but there’s several out there that are very good.
We use Xero
Xero, MYB, there’s several out there. You can sell the parts of the business, I always used to say you can sell the business for one to four times. But I keep hearing regularly reports of businesses selling up to eight times the profit for online businesses. Which is, it’s really out there but it’s happening more and more times, I’m hearing it all the time. But realistically, one to four times is what we gauge on but you know, we regularly hearing eight times. You can implement outsourcing using 10% of your monthly profits.
You can implement outsourcing using 10% of your monthly profits
Okay, so step one. If you’re brand new, first thing you’ll have to do of course, is open an account on eBay which is free. So you go to the home page of eBay, up here you’ll see a sign or register, if you just click that register button, bingo and enter your details in and now you got an eBay account. And with that eBay account you can buy and sell. Next thing you must do, is you must set up what’s called the out of stock function. What this does, it keeps your sales history. So what do I mean by sales history?
So what do I mean by sales history?
Like, take this one item as an example, this has sold 1,386 times. If you do not have the out of stock function turned on which by default is not on, if you sell your last one, eBay ends your listing forever and you’ve lost your social proof which is that. That 1,368 sold is your social proof. So it’s very important that you go to here and you go to site preferences and you turn it on. Now, for those who came in late, these slides will be all available to you guys. I’ll put up a URL at the end and you can take a photo with your phone and you can download these slides so you don’t have to write everything down.
The next thing you do, is you open a second eBay account
Okay, so the next thing you do, is you open a second eBay account, this is your purchasing account. So it’s a spare account. So everything in life, of course we should always have redundancy with everything in business and with everything in life. So you always have a spare eBay account sitting there in case you need it for whatever reason.
And that account, you just do your purchasing
And that account, you just do your purchasing. You and your partner purchase things through it. So if you’re going to buy some more paper for your printer, some toner cartridge, a new cover for your iPhone or whatever, you just buy it through that account. You don’t buy stuff you’re not going to buy, you just buy stuff you are going to buy and that account sits there and gets more and more feedback. Because around 40% of the places you buy from will leave you feedback. And as of, I think it was seven years ago, sellers can only leave positive feedback. So that account can never ever get negative feedback. It can only have positive feedback. All right, so done that, done that. Okay, so-
Why do you have a second account for buying
– [Male] Question.
– Yeah, sorry.
– [Male] Why do you have a second account for buying and-
– Just as a spare account. So if you want to jump to that account because something happens to one account, you can move to your other account. If you want to sell a business, you can take all your items out of one account, put them in the other one. It’s just so you got a spare one sitting there with history-
– [Male] With history.
Next thing is ask your accountant if you should get an ABN number
– So it’s not brand new. Next thing is ask your accountant if you should get an ABN number. You know, if you want to deal with Australian wholesalers, the first thing they’re going to probably ask you, “Do you have an ABN number?” Now, it’s a simple hurdle. They’re free from the ATO, you get instant approval but you must ask your accountant whether or not you should get one. I’m not saying to get one, I’m just saying ask your accountant. Next thing is eBay seller limits.
Next thing is eBay seller limits
Everyone when they start gets hit with limits. They might limit you to say, two and a half thousand dollars that you can list on eBay right now. Everyone starts at the beginning because other people have, you know, burnt the bridges. So they’re going to monitor your first 25 transactions and they’re going to want to make sure that you get… When you receive money, you can deliver products and the customers are all happy. Then after your first 25, they’ll keep raising and raising and raising your limits.
They’ll keep raising and raising and raising your limits
Now, if you get a low limit at the beginning like two and a half thousand, all you got to do is call up eBay and ask to have your limit raised and they’ll normally raise it. What they’ll do though, it’s normally because you’re not verified on either eBay or PayPal or both. And if you’re not verified, it means they’re missing some information. It could be a phone number, it could be a driver’s license number, it could be part of your address, it could be whatever but they’ll ask you these details to verify you. When you’re verified, they’ll increase your limit while you’re on the phone.
When you’re verified, they’ll increase your limit while you’re on the phone
So right now, you can go home and increase your limit if you’ve hit your limit, just by calling them up. Okay, so they do it review on the 20th of each month. Irrespective, but if you hit your limit, always call them up. Now you can also reduce the quantity of each item. So let’s say you’ve got a $5,000 limit. Let’s say you sell these, they’re $100 each. If you list 100 of these, you’ll hit your limit. Because it’s not the amount of all your… It’s just the amount of items you can potentially sell. If you put 100 of these at $100, at $50, there’s five grand.
So to get around your limit, just don’t list 100 of them
So to get around your limit, just don’t list 100 of them. List 10 of them, five of them, whatever. If you change your registration from a personal account to a business name, which means you just go in and change your name, they will regularly increase your limit on that as well.
– [Male] Just two things-
– [Male] And I know you’ll get to them. You should also mention they need to open up their PayPal account because that’s compulsory when you sell-
– [Male] on eBay.
– Good point, yeah.
Read the rules really carefully about what you can and what you can’t sell
– [Male] And the other thing is that when you’re selling for the first time on eBay, read the rules really carefully about what you can and what you can’t sell. Because if you sell things like concert tickets, gift cards and so on, you get banned from eBay straight away. Because eBay doesn’t like beginners selling gift cards because there’s too many scams out there with that. If you do that, because I’ve seen people sold gift cards and eBay just canceled their whole account straight away and they can’t get back on it. So you have to be careful, real really carefully what you’re allowed to sell and what you’re not allowed to sell on eBay.
– Good point and thanks Angen. So for those who didn’t get that, so you sign up for a PayPal account straightaway as well and don’t sell things like gift cards…
– [Angen] Concert tickets.
– Concert tickets, yeah because obviously a lot of people, scammers get caught on that and they can shut you down.
– [Female] account, no?
If you got multiple eBay accounts you can call them up and they can connect them together
– [Female] this part to the account today, if you have different account?
– If you got multiple eBay accounts you can call them up and they can connect them together.
– [Female] okay.
– Yeah, all right, so if you want to know more about selling limits, here’s a link to it. Okay, I’ve done that, so I’m not going go right through the fees tonight. If you want to know more about fees, because it doubles up too much time, there’s a whole slide here which shows you all about your fees. But basically, when you start off and you got no store, you’re paying the full whack which is 10.9%.
But you can go and get things like basic store which will cost you around $20 plus GST a month and yet you pay lower, final value fees
But you can go and get things like basic store which will cost you around $20 plus GST a month and yet you pay lower, final value fees. Then you can also go from a basic store to a featured store and an anchor store. And the stores cost money per month but you pay less final value fees. And that’s why you normally go to a store because you pay a lot less final value fees which, that’s how you justify it.
– [Female] What is store?
– [Female] Is everyone is eligible for a store or-
– Yes, anyone.
– [Male] As long as you’re paying the fee every month.
– That’s right, as long…
– [Male] That’s the thing about having a store.
– You subscribe and you pay the monthly subscription.
– [Male] See, you can start straight away in the store, you don’t have to wait. If you actually, if you’re starting, I’d prefer just to do a few things.
So if you stuff up the listing then you’re not going to stuff up your and put it on and you’ll know the problem is
So if you stuff up the listing then you’re not going to stuff up your and put it on and you’ll know the problem is. Let’s say you start with 200 listings and you know there’s an error in one listing and that’s replicated across all 200, you’re going to have to fix the whole 200 listings. So it’s better to do a few first and get your feet wet.
– Okay, so a summary of how to build a million dollar plus eBay business.
A summary of how to build a million dollar plus eBay business
This is through these steps, research a product, find a product, list the product, optimize it, automate the process and then you tune the listings after 30 days, you always tune your listing after 30 days. And then you simply repeat. So this is what we’re going to go through now, it’s just these steps. Now we learn how to do this and you just automate it by outsourcing. You learn how to do it yourself, then outsource it. So what would you rather sell? I’ve showed this slide a few times before. You know, here’s a, yeah?
Software use for research products on eBay
-[Male] and which software you use for research products on eBay?
– I’m going to show you, that’s coming up. So here’s a cable as an example, this is a VGA cable. As you can see, I bought this cable, it was $2.58 from China. So you can measure how much profit this seller made. Not much, enough to maybe buy a bowl of rice or something. This item, when we found this, this over 90 days was making just over $20,000 dollars profit for 90 days.
– [Female] What is that? It’s a portable hair shampoo basin.
– [Male] Geez.
– So like I mentioned in the beginning about hurdles, like a lot of people when they start off, all they want to sell is cheap, small stuff and fight it out with everybody else on margin. Personally, I like the bigger stuff. And I’m going to show you tonight how you can sell this stuff without having to buy it first.
So the difference between a small online business and a large one is simply
So the difference between a small online business and a large one is simply, like for anyone who’s read my book, each leaf is a product that sells over and over and over again. Unlike used items we sell once, if you sell these, they sell over and over and over again . So the more products you have that sell over and over, the more money you make. Every leaf is a product that sells over and over and over again. Another way of putting it, is many streams make a river.
Another way of putting it, is many streams make a river
So the great thing about this strategy of having many products, is if you lose one, if the manufacturer stopped making this, you don’t care, because you lost one product but if you’ve got all your eggs in one basket and you’ve only got half a dozen products, you care a whole lot when you lose one product. There’s one lady in the Adelaide group, she spent two maybe three years now and she spent over 60 grand investing into one product. And that’s a big chunk of your life and a big chunk of money. I really don’t recommend doing that. Unless you’re really passionate about a particular product idea that you’ve got, sure.
I like to do proven products just like Warren Buffet does with his shares
Now I like to do proven products just like Warren Buffet does with his shares. He buys shares in companies that he understands, like Coca-Cola, etc. He only buys into proven businesses, he does not touch startups. We’re doing exactly the same thing with eBay and Amazon. Do not touch startup products. Don’t try to come up with some new product idea unless you’re really passionate or you want to. Instead, just do the same model, use proven products. It’s 10 times faster if you use seller research that is product research. If you do product research, you’re going to find less than 3% of the products that you research make money after you add shipping, it’s less than 3%.
If you do seller research, where you research sellers, it’s over 10 times faster
And if you do seller research, where you research sellers, it’s over 10 times faster. And I’m going to show you tonight how to find these top selling items. When you have experience, you can implement the one in 10 rule which means that you sell one in 10 items that you list are brand new items that are not sold by another seller. So they’re like a new item.
One of your suppliers and they regularly have ways or mechanisms to find that they show that they’re new items
So you look at one of your suppliers and they regularly have ways or mechanisms to find that they show that they’re new items. It might be like a link, a page or whatever, or a brochure or some way they put out displaying the new items. Now when one of those items comes up that looks familiar to you and it fits into what everything else you do, you obviously recognize it and say, “Okay, I’m going to have that as well.”
This is an advanced strategy and I recommend you don’t do that until you got the hang of it.
There’s no competition on this and you can quite often get a higher margin and get high sales because you’ve got no competitors. But this is an advanced strategy and I recommend you don’t do that until you got the hang of it. It’s what we call the one in 10. So you can either be a tester of products or you can just sell what’s already proven. How to find how much items sell for on eBay. So any time you can find how much an item actually sells for. Because a lot of people say, “You know, these are for sale on eBay for x amount.” Well, that doesn’t mean anything.
Want to know how much it actually sold for and how often they sold
We want to know how much it actually sold for and how often they sold. We want to know how much they actually sold and how much they sold for. So let’s take, let’s say you want to know how much stand still drinking straws actually sell for. Not that it’s listed on eBay, because that doesn’t mean anything. So you just type in, “stand still straws,” and click on “sold items,” bingo, the price goes green. When the price is green it means they have sold.
“How many times did that item sell in the last 90 days?”
They’re not for sale, they have sold. And that’s a big difference. Now then you want to know, “How many times did that item sell in the last 90 days?” So take this item here, this item has sold 2,169 times. Now that’s sold 2,169 times since it was listed. It could’ve been listed yesterday, it could’ve been listed two years ago. But we can find out exactly when they sold.
This 2,169 is actually what’s called in known in industry as a hyperlink, which means you can click on it If you click on that 2,169, bingo, you see this page. This shows you exactly when they sold, the date and the exact amounts that they sold for. So from here, you can calculate how many they sold in the last 30 days or 90 days. And you can do it with any product and it’s free. You don’t have to buy any software to do this. Any questions on that?
Where in the process do people offer less?
– [Male] Where in the process do people offer less?
– Yeah, and sometimes the prices, their sellers will change their prices. So it’s always good to know what they sold for.
– [Male] Just to update the listing?
– Well, you know, because the dollar’s gone up and down. So when they import, the next shipment came in, they put the price up or down in relation to the dollar.
– [Male] Does someone actually contact them and say, “Will you take-
– No, but they won’t show that price. It’ll just say, “Offer accepted.” This is more and likely because of the dollar or they had the item on sale. So, how to find any eBay seller’s top selling items in any country.
To watch “Beginner’s Guide to Starting an eBay Business 2020 | Step by Step Guide Part 1” see https://www.neilwaterhouse.com/begin-part-1