Changes to eBay Stores

March 19, 2004
The truth about selling designer clothes, handbags and shoes on eBay

I get so many people that email me because they want to sell on eBay. I actually prefer people who have already tried it and need additional suppliers over those that have just used eBay but have never sold clothing. The reason is that many people tend to have very unrealistic expectations of what it’s like.

They think the clothes can be purchased for ridiculously low prices, you know like a Canali suit for $50. They have visions of eBay sellers rolling in the dough. In fact, the majority of eBay sellers I know (and I know a few powersellers) are extremely hard working people. And they work even harder to find consistent deals and sell, sell, sell to keep the money rolling in. And not everything they sell is a winner. I know some designer handbag sellers that only profit $30-45 dollars a bag. That’s not bad, but it’s not a lot when you consider that the bag cost $250 to begin with.

Many sellers take chances and buy things that don’t sell as well as they hoped they would. Some get hit with the occasional bad or remorseful buy. Over all, they look at it and determine whether it makes sense to continue, where they could improve, what they could change.

I don’t like to perpetuate the perception that eBay is easy money. Nearly anyone will tell you it’s not. But I want to caution the newcomers to be realistic.

As an example, a lot of people want to sell handbags, but handbags aren’t sold as cheaply as clothes because bags are in such high demand that there’s never a need to drop the price. Even those who import still have to pay a pretty penny for their Prada, Gucci and Fendi handbags. And Louis Vuitton? Forget about it: there’s not a chance in you-know-where that you will find it wholesale, off price or whatever. As my good friend likes to say “Louis Vuitton will burn their bags before they let them hit the off-price market.”

The most opportunistic market is clothing, because the deals are more frequent and better. Shoes are good, but not as cheap as clothes, and designer handbags are the most expensive of the lot. What you can buy consistently will always cost more than what you can get when you catch a good deal. But the hotter the item, the more in demand it is, the more you can expect to pay for it on the off-price market.

For example, for the past few months, everyone has wanted Seven Jeans (Seven for All Mankind), Juicy Couture or [insert any hot brand name here]. Well, Seven is so hot that the manufacturers don’t really want it sold in their major US markets at discounted prices. When they do, they sell to select stores like Century 21 or Loehmann’s. The rare time they let it go on the market, guess what? There’s always a huge retailer that can buy all 30,000 pair, leaving few for the small buyer. That’s just reality.

I get a few emails every day from people who only want Prada, Fendi, Gucci and Chanel handbags. Why? Because they’re hot and sell well. Those areas are problematic on eBay because the competition is fierce and eBay is totally flooded with counterfeit handbags, especially Kate Spade and Christian Dior (I have hardly ever seen a real Dior for sell on eBay). And when you want to sell those items, you are “jumping on the bandwagon” so to speak. Your chances of actually being able to tough it out are slim. People do much better as sellers when they find their own niche, something everyone is not selling, and run with that. This way, they can become very knowledgeable about what they do and anticipate trends and changes in the market.

In other words, don’t sell something you know nothing about just because you think it’s hot.

But that’s enough about that, I discuss it in depth in the guide.
Posted by theclothingbroker.com at 11:55 AM
December 03, 2003
Changes to eBay stores part 3

So why am I going through all this? The reason is simple:

If you’re going to go through the trouble of bringing your own visitors to your store, might as well do it off eBay and not pay referral fees

You know, even if you had some simple webpage with some items and paypal buy now buttons, you could get your repeat customers to buy from you. Or you could use one of hundreds of decent ecommerce software packages to set up a store of some of your popular items. But if YOU have to do the work of bringing visitors to your site, why would you pay eBay fees for doing so?

I have websites, I have this one, and others. And I work hard to market those stores. But, and here’s the big thing: I only pay fees to those venues that bring ME customers. I’m not going to bring my own customers AND pay a percentage of sale.

Some of you have these mailing lists of hundreds or thousands of buyers. SELL DIRECT. There is a great service called Constant Contact where you can send pretty little emails and include PayPal buy now buttons right in the email! When you have a special to offer, people can buy directly from the email, they don’t have to go to a website, they don’t have to go to an eBay auction or store. They can get it right then and there.

Isn’t that better than paying fees? I’d like for some of you powersellers with hundreds or thousands of customers to try it out and let me know how it works.

I think eBay is great. I think eBay is wonderful. But I don’t believe in working so hard to bring people to eBay and pay eBay listing and final value fees on top of it.
Posted by theclothingbroker.com at 08:00 PM
November 28, 2003
Changes to eBay stores part 2

My feeling about this whole thing is this:

eBay stores is not a good ecommerce platform. It is good for auction users and for having more flexibility with your auction settings, but it cannot hold a candle to most ecommerce software out there. And the reason is simple:

It is incredibly complex for the average non-eBay user to buy something from your store. Listen, when you’re selling hard to find stuff, you can pretty much make people call your dog and place an order with your dog. Because the stuff is hard to find, people have to do what they do to get it. Like this site. I can get away with some things I could never do on a normal ecommerce site because you so badly needed this information and did not have many quality alternatives from which to buy. I break a lot of “ecommerce rules” and I know I do, but I know I can get away with that.

But since most of you are selling readily available designer merchandise and have a lot of competition, you do not have that luxury. You just don’t. So you have to make it simple to buy from you. And this is what all this eBay stores stuff comes into play.

Not everyone who shops online uses eBay. And not everyone who uses eBay finds it easy to use or likes to use it. Some people use eBay because they have to, they are looking for a bargain, they can’t find the item anywhere else, or they are simply eBay fanatics who would buy their groceries on eBay if they could. But some people might prefer to use a normal ecommerce website and be done with it, if given the choice.

And some people will never use eBay. Sometimes we overestimate the technical acumen of the average internet shopper. A lot are just simple folks who like a simple buying experience. And they will never buy on eBay because they find the entire process to complicated.

Tit for tat, buying on eBay is more complicated than buying from a normal, well constructed ecommerce website.

And this is where referrals come into play:

If you are getting your referrals through a normal search engine, the chance of you getting them to convert into a buyer through your eBay store is small, *if they have other suitable places to buy*. So, for example, you have someone searching on google for, hmmmm, a pair of Juicy Couture velour pants. The find your store listing because you promoted it in the search engines or you did some pay per click advertising or whatever. Now this person, even if registered on eBay, might prefer to buy those items from a normal website than through your store. But even if they decide to buy through your store, they probably won’t do so right then and there in that session and you lose the referral credit.

More in part 3…
Posted by theclothingbroker.com at 07:51 PM
November 22, 2003
Changes to eBay Stores

This entry will be in two parts (or more) because I have an awful lot to say about the changes to eBay stores. First of all, the changes are long overdue and for the most part good. If you don’t know what the changes are, for the most part, they will help you make a better store. That’s not my concern. My concern is with the referral fee credit and what that means. You can read about it here

Basically you get a credit on your final value fees if YOU bring a visitor to your store. Now many of you will go yippie and start bringing visitors to your eBay store. But wait, here we go:

My problem with the referral credit is this (and I’m quoting from the eBay website):

Please remember: All of the following conditions must be met to qualify for the credit:

* The buyer must enter your eBay Store or go to one of your Store Inventory listings directly from a location outside of eBay.
* The buyer must go to your Store because of your promotion.
* The buyer’s Web browser must accept “cookies.”
* The buyer must purchase the item during the same Web browser session used to enter your Store.
* The item sold must be in Store Inventory format.

Wow. What’s this about? Let me go over some issues I have with this:

First, the main, overwhelming benefit of eBay is that it brings buyers to YOU not that you bring buyers to eBay. You pay eBay those fees because eBay has this enormous built in following, does all this marketing and attracts thousands and thousands of visitors daily. Visitors you would take a very long time to build on your own. That is the primary reason you are paying those fees (or at least it should be).

Secondly, the minute you have to drive YOUR OWN visitors to your eBay auctions or your eBay store is the minute you need to stop paying those fees and do your own thing. Why spend the money and the effort to get your own visitors AND pay the fees? WHY?

Third, few buyers buy on the first visit. That’s ecommerce 101. I’ve read it in a study before, you can read it if you do some research. Many buyers will visit your site a few times before they buy, even if they buy the same day. Sometimes they want to check out another site, sometimes they want to think about it. But you will not capture all sales on the first visit. So what does that mean, well that means the you won’t qualify for the referral credit most of the time.

Someone once mentioned that maybe, maybe eBay has it set up this way because it would be difficult to track buyers. BS. eBay has some of the most sophisticated tracking abilities you will ever find anywhere. Otherwise, how do they know how to keep suggesting other stuff to you if they aren’t tracking you? The reason this policy is in place is because it makes financial sense for eBay. Most people who sell on eBay don’t have the ability to even notice something like this, they don’t have the ecommerce acumen to see the flaw with this. So most will be perfectly happy to drive their own customers to their store and pay for it.

More coming in part 2…

Posted by theclothingbroker.com at 07:39 PM
September 17, 2003
Question & Answer

Question

Hi,

I wanted to show something to you on Ebay- I found it interesting. I found an Ebay seller and she is selling “Brand X samples”- tags removed, etc. She has some really cute things. I bought some from her and they are quite nice, tagless no inside size or fabric content tags, no signs tags were ever sewn in. They have the Brand X style, but are definitely not an Brand X level of quality (but that’s ok with me because I really like them) She says they are samples, but when Ichecked back through her feedback (curious me, wanted to see her other items) I saw that she had multiples of most styles in various sizes. I’m just curious as to what you think she’s doing- because she is making a killing on some of these auctions. She’s located in California. I know its not ethical to say something is Brand X when it isn’t, of course- she is definitely getting away with that. I have never seen items like hers on Ebay or in any catalog or store, for that matter. Anyway, sorry to ramble- just thought you might find what she is doing of some interest.

Answer

Samples are usually all one size or one group of sizes. For example, usually all of a rep’s samples will be a size 6 or maybe 4,6 and 8. I’ve seen a sample where there was supposed to be a screenprinted design on the tee shirt, but they didn’t have time to get it screenprinted so a printout of the design is taped to the front of the shirt. No kidding. I don’t recall seeing a sample without a label, but then again, I don’t recall looking. It might not be uncommon because samples can be defaced in some way to prevent them from being sold. Tag missing or cut, marked as a sample, etc..

Since samples tend to be the smaller sizes, if the seller has a full size run, like 2 through 12, then I would doubt they are samples. Most sales reps don’t have a dozen samples of the same piece, so if they have too many (of each style), then they probably are not samples.

Now, getting back to the point, I am pretty sure that it is absolutely illegal (and you read my bit on using the word illegal where it does not apply) to SELL garments with no label. I am pretty sure that the FTC guidelines prohibit that. They must at least have the fabric care/content tag and a RN number and country of origin. I am pretty sure that’s the law. A sample probably is not required to have this info because it is not for sale. Having said that, I don’t think a company would sell merchandise with no fabric care/content label, so I am wondering who removed the labels. It’s highly likely that the eBay seller did.

The reason she would remove the label is to prevent you from searching by the RN (Registration Number). The FTC law for the US is that a label must either have the legal name of the company on it or the RN number (redundant, I know). The FTC keeps a RN database and you can type in the RN and get the contact info for a company. Now if someone is selling some no name brand and calling it Brand X, then they would remove that fabric care/content label (often called a joker label) because they donâ?™t want you to find out who the real manufacturer is, if itâ?™s not Brand X.

It is not unusual for someone to pull a trick like that. For instance, in looking at her auction (I only looked at one), I see no mention that the brand is Brand X IN THE ACTUAL AUCTION, only in the title. When called on it, she could say that she is keyword spamming and not selling counterfeit merchandise because she did not specifically state that it was Brand X. Typically when a seller has a desirable brand, even if that label is only delineated or cut, they will try to show the label to get higher bids.
Posted by theclothingbroker.com at 08:53 PM
August 07, 2003
The eBay dilemma

eBay is, in many ways, a phenomenon. It’s almost like a world of it’s own. Many of you sell on eBay in some capacity: part time, full time, seasoned, experienced, or just starting.

And I have my opinions about eBay. Not so much about eBay itself, but about what happens with sellers that sell on eBay. I’ll write a lot about thinking outside of the eBay box, that eBay is not the world. Let me tell you why I say this.

You deal with eBay or eBay sellers long enough and two things happen:

1- a seller finds it increasingly difficult to make the same money they made before (overall)
2- a seller finds it increasingly difficult to get the same amount of money for specific merchandise as they once did

Some sellers accept reduced income, or increase their volume just to keep the income the same. And some try and find merchandise cheaper and cheaper and cheaper.

There is a price floor in this industry. Once you are getting the best price on merchandise, it doesn’t get much lower. So if the prices are falling, then, maybe, just maybe you have to find somewhere else to sell.

What most eBay sellers do not understand is that when it comes to designer merchandise, eBay is not always indicative of the market in general. Just because you can’t get decent money for XYZ on eBay, doesn’t mean you can’t get decent money for XYZ. So you can decide whether or not to sell XYZ on eBay for little profit or find somewhere better to sell it.

The sellers in the best financial positions have multiple channels for selling merchandise. When one is slow, there are others to pick up the slack. They can keep their business level because they are not entirely dependent on one source of sales. This is great. This is not having all your eggs in one basket.

The other thing about sellers who have slightly diversified (not diversified to the point where they are a jack of all trades and a master of none) is that they are more receptive to opportunities. One of the best things you can do is be open-minded. You need focus, but not so much that you have tunnel vision. By keeping your mind open, you will spot opportunities in places you never thought of. You have to train your mind to be receptive to opportunities. The person that emails me that is hell bent on getting Prada, Gucci and Fendi purses will overlook boutique brands that are consistently selling for close to retail on eBay. The person looking for only top tier couture misses out on the casual designer sportswear selling for more than retail. The person dying to get Juicy because it is the cash cow of the moment, is overlooking the next big thing, the up and comer that they can get in on NOW so that when it’s a cash cow, they can take advantage of it.

Anyhow, that’s all I have to say about that. Basically, be open minded and try to diversify your selling venues a little.
Posted by theclothingbroker.com at 03:22 PM
July 24, 2003
Nothing But Net (from June’s Newsletter)

Here’s one thing I come across a lot with my customers that are eBay sellers: On one hand, the price of designer merchandise is rising. On the other hand, the amount of money they can get for it on eBay is falling. And they are constantly searching for less and less expensive merchandise or untapped niches.

The problem is that most jobbers serve retail stores as well. And the retail stores do not have the same nature of competition as eBay sellers, so they are perfectly fine with the prices the jobber is charging.

So what happens is that there is no incentive for a jobber to find cheaper merchandise or lower their profits to service the eBay seller. As a result the eBay seller is in a crunch.

Some of you, I feel really sorry for you, in a year, or two or three, you are either going to have to wrap up your business and get a job, suffer financially as prices fall or find something else to do. Some of you are smarter and will evolve because you see it coming and are planning an exit strategy.

Now the number one problem many eBay sellers have that’s keeping them “in their box” is that they are looking at how much they are SELLING and not how much they are MAKING.

So, let me explain. Some of you high volume sellers are paying $2,000-$3,000 a month in eBay fees. You won’t look for other avenues to sell in because you feel that the $3,000 is a necessary expense. eBay is a venue, but eBay is also advertising. If many of you looked at what percentage of your sales you were spending on advertising (i.e. eBay) you would not be there.

Anyhow, most other people don’t evaluate other avenues of selling because they don’t want to give up the income eBay provides. So I pose the question:

How much of a decline in sales can you tolerate and be just as well off. Someone who pays eBay $3,000 a month in fees will normally say that they can tolerate a $3,000 reduction in sales and be just the same.

WRONG.

If you have to sell $10,000 in merchandise in one month, just to pay the $3,000 eBay fees, then you can tolerate a $10,000 reduction in sales and be just the same.

But, GASP, OH, CHOKE, no one wants to suffer a $10,000 decline in sales.
The problem is most of you are looking at how much you are SELLING and not how much you are MAKING.

Let me give you one lesson I had to learn early on and thank god I learned it when I did.

Don’t get addicted to the revenue and get a big ego based on how much you sell. Take a good look at what’s left over after paying for inventory and selling related expenses (payment processing fees, auction fees, auction software fees, etc.). Take a good look at what that final number is and ask yourself two questions:

Based on this final number is what I am doing worth my time?

Is there a way to make that same amount of money with less work (because eBay is VERY labor intensive for many of you).

Let me give you an example. A somewhat distant relative of mine is a personal shopper. She specializes in getting people deals on merchandise. She meets with a client, sizes them up and hits the stores. Because she mostly gets discount merchandise, she charges a markup on her merchandise in lieu of charging by the hour of her time.

So, one day she is telling me about this client. She spends three days shopping for the woman. And she says, it was great, I made $3300. And I said, okay, but how much did the merchandise cost? $3,000. And so I said, well you only made $300. Now, I’m not going to make a judgment about whether $300 for three days of work is good or bad because it all depends on where you live. In some areas, $300 is half your mortgage, in others, it isn’t even your car payment.

But what I said to her is:

Is what you do worth it for the money you NET and could you find a way of making that same $300 without having to drive all over town all day for three days (even though you like it)?

These are two important questions all of you have to ask yourself.

Why? Because some of you spend all day shopping at consignment stores, outlet stores and thrift stores for deals. I know you, you email me, you’re stay at home mothers who say that the thing you want most is more time with your kids, yet you select a method of sourcing your inventory that requires you to drive and shop all the time. Not to mention the time spent getting stuff listed. Is what you do worth it for the money you net and can you find a way of making the same money with less work?

Now to bring this back to eBay. The reason this is relevant is because some of you need to look at what you are selling and how you sell it. Some of you have one item that you’re going to sell for $10. I don’t care if you bought it for a dollar and made a million percent profit, is it worth the time involved in listing for what you are making for that item? I get a lot of people who want to sell children’s clothing. Man, they are perfectly happy photographing one onesie at a time and making $5 profit on that item. And then there are many who won’t touch certain brands of children’s clothing with a ten foot pole because they *know* that they don’t want to list a bunch of low dollar stuff. Low dollar stuff is only really worthwhile when you have a lot of it and you only invest the time into writing one auction ad to sell multiple items.

So the lesson here is take a look at how much you NET, not how much you sell and ask yourself those two extremely important questions.
Posted by theclothingbroker.com at 10:50 PM
Hey Clothingbroker, Do YOU Sell on eBay (from January’s newsletter)

People ask this question a lot. The truth is I did. But I don’t anymore. To be honest, I think you’d have to twist my arm behind my back while threatening to inject me with the ebola virus to get me to sell on eBay.

I don’t have anything against eBay, I just think there are better, more efficient, less costly and more stable ways to sell merchandise than eBay. But, honestly, everyone can’t do it because too many eBay sellers are stuck thinking inside the box to do anything different. I touch upon this a little bit in my guide, I don’t go into it in depth, because there are two kinds of people– the kind that just need ideas, and the kind that need handholding. And I don’t have much time to hold hands.

Some of you tell me you sell on eBay, you tell me your IDs, I don’t go look up every person that buys the guide because it would be too time consuming. Anyhow, I admire your tenacity and your work ethic and you guys work hard for every dollar you earn, because none of you make easy money. But so many of you need to think outside the eBay box.

It’s getting harder and harder, competition is tougher and tougher, you sellers running a business and/or supporting a family have to compete with hobby just for fun sellers who are just thrilled to make $5 profit on a $50 item and they are undercutting the market like crazy. And you have to know that it’s not going to be good forever. But too many of you look for the next auction, the next eBay, and you don’t realize that you might just need to think beyond eBay if you want to secure your future.

And I have some friends that still dabble in eBay, or some that sell there full time. And they might come across a deal and say to me, “If you can make quick money on eBay, why not?” It’s not always about quick money, there’s more to consider than that. But I don’t have time to really explain it because they aren’t twisting my arm behind my back and threatening to inject me with the ebola virus:)
Posted by theclothingbroker.com at 10:44 PM
Why Are Companies Shutting Down Auctions? (from January’s newsletter)

Here’s one thing I think a lot of you don’t understand about Vero. eBay’s Vero program isn’t about authentic vs counterfeit per se, it’s more about rights and such, you know like licensing, trademarks and copyrights. Some people believe that you can’t have an auction shut down if you’re selling authentic merchandise and that simply isn’t true.

Now I’m not an attorney, so don’t go thinking that what I am saying is de-facto law, I’m just giving you some insight.

Let’s take for example Gucci, since they are shutting down auctions like crazy. Well, Gucci owns several trademarks, their logos, their patterned logo fabric, they have specific designs and names for those designs that may be protected under copyright or trademark law and so forth. Can Gucci shut down an auction for authentic merchandise? Yes, because you could simply be infringing upon their rights by copying an image, using a name without the registered trademark symbol and so on.

They are within their rights to do so. Like for an example, this is a true example that I experienced. I had for sale a certain poster of a certain artist from a certain music group. I received a letter from their attorneys letting me know that the license for that item expired long ago, and I needed to remove both the item and the image from my website immediately because I was in violation of the licensing agreement. Now it turns out that the actual distributor was the one being held responsible because they were selling this stuff in violation of the license and pretty soon they were contacted by the attorneys because they sent a letter to all their retailers asking them to remove the items from their websites. Now if this were an auction, the company or its attorneys could have had the auction shut down under the Vero program and would not HAVE to send me any correspondence.

And I hope this gives some insight as to how things like this can happen even when you are selling authentic merchandise. In my case, since I was buying from a legit distribution channel, I’m not in trouble. The problem with off-price is, you don’t know HOW your jobber got the merchandise and whether or not they got it legitimately.

Now in most cases, no one wants you, they want the source that’s putting the stuff out on the market. But this is the way this stuff works. Is there something you can do about it, well, I don’t know, because a company has every right to protect their trademarks, copyrights and other stuff.
Now if you’re selling fakes, counterfeits or as some like to say it nicely “knock-offs” that’s another issue because that’s illegal and you’re breaking the law.
Posted by theclothingbroker.com at 10:42 PM
July 13, 2003
The truth about selling designer clothes, handbags and shoes on eBay

I get so many people that email me because they want to sell on eBay. I actually prefer people who have already tried it and need additional suppliers over those that have just used eBay but have never sold clothing. The reason is that many people tend to have very unrealistic expectations of what it’s like.

They think the clothes can be purchased for ridiculously low prices, you know like a Canali suit for $50. They have visions of eBay sellers rolling in the dough. In fact, the majority of eBay sellers I know (and I know a few powersellers) are extremely hard working people. And they work even harder to find consistent deals and sell, sell, sell to keep the money rolling in. And not everything they sell is a winner. I know some designer handbag sellers that only profit $30-45 dollars a bag. That’s not bad, but it’s not a lot when you consider that the bag cost $250 to begin with.

Many sellers take chances and buy things that don’t sell as well as they hoped they would. Some get hit with the occasional bad or remorseful buy. Over all, they look at it and determine whether it makes sense to continue, where they could improve, what they could change.

I don’t like to perpetuate the perception that eBay is easy money. Nearly anyone will tell you it’s not. But I want to caution the newcomers to be realistic.

As an example, a lot of people want to sell handbags, but handbags aren’t sold as cheaply as clothes because bags are in such high demand that there’s never a need to drop the price. Even those who import still have to pay a pretty penny for their Prada, Gucci and Fendi handbags. And Louis Vuitton? Forget about it: there’s not a chance in you-know-where that you will find it wholesale, off price or whatever. As my good friend likes to say “Louis Vuitton will burn their bags before they let them hit the off-price market.”

The most opportunistic market is clothing, because the deals are more frequent and better. Shoes are good, but not as cheap as clothes, and designer handbags are the most expensive of the lot. What you can buy consistently will always cost more than what you can get when you catch a good deal. But the hotter the item, the more in demand it is, the more you can expect to pay for it on the off-price market.

For example, for the past few months, everyone has wanted Seven Jeans (Seven for All Mankind), Juicy Couture or [insert any hot brand name here]. Well, Seven is so hot that the manufacturers don’t really want it sold in their major US markets at discounted prices. When they do, they sell to select stores like Century 21 or Loehmann’s. The rare time they let it go on the market, guess what? There’s always a huge retailer that can buy all 30,000 pair, leaving few for the small buyer. That’s just reality.

I get a few emails every day from people who only want Prada, Fendi, Gucci and Chanel handbags. Why? Because they’re hot and sell well. Those areas are problematic on eBay because the competition is fierce and eBay is totally flooded with counterfeit handbags, especially Kate Spade and Christian Dior (I have hardly ever seen a real Dior for sell on eBay). And when you want to sell those items, you are “jumping on the bandwagon” so to speak. Your chances of actually being able to tough it out are slim. People do much better as sellers when they find their own niche, something everyone is not selling, and run with that. This way, they can become very knowledgeable about what they do and anticipate trends and changes in the market.

In other words, don’t sell something you know nothing about just because you think it’s hot.

But that’s enough about that, I discuss it in depth in the guide.