10 Things to Know Before Selling Online

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By Crystal Wells, Product Marketing, Vendio


Selling on aggregate marketplaces, such as Amazon and eBay, is great way to jump-start your ‘Net business or make a little extra income, but merchants need to avoid these common new-seller pitfalls or risk getting cut off from these potentially valuable online marketplaces.

1. Their playground, their rules. In return for a steady stream of ready buyers, you have to abide by the marketplace's rules and policies or risk losing your selling privileges. As a new online seller, do you really want to get your account suspended after you have invested hundreds, maybe even thousands, of dollars in inventory just because your picture was too small or you used the wrong keywords in your title?

Every aggregate marketplace has different rules and policies, and the only way to understand them is to take the time to understand them. They have active groups and forums that are a wealth of where-the-rubber-meets-the-road knowledge. If you want to control your own destiny, read the user agreements, policies and help files. Make notes as you go because it is all too easy to forget critical information (especially for those using more than one). Marketplace user agreements and policies are not boilerplates and it's very easy to make an inadvertent mistake that can get your account permanently restricted or suspended.

2. They make their money first. Make sure you make a profit, too. All too often new online sellers underprice their products. It's easy to underestimate the true costs of acquiring, holding and shipping products.

The cost of your physical inventory is just the beginning. You also have to figure in the cost to get that inventory to your doorstep, add in the expensive marketplace fees, the payment processing fees, the cost to ship that product to your buyer (including boxes, bubble wrap, tape, labels, etc.). The length of time products sit on the shelf must also be included. And finally, don't forget to add in the most important cost of all - the cost of your profit.

Profit has a cost; it is the cost of your time, or later, an employee's time. If you are not figuring in a profit that accounts for the time it takes to process inventory, fulfill orders, etc., then you are missing a very important cost factor.

One final word of caution: Aggregate marketplace fees are quite often complex, so spend some time to understand what these fees are before you list your first item.

3. Don't expect overnight results. Online entrepreneurs have spent years developing trust with their customers, building customer mailing lists and earning repeat customers. Entering a new marketplace, you will have little or no feedback or reviews, and buyers are more cautious with a new, unproven seller. Don't expect to get an immediate rush of customers and sell out in a day. Nobody makes a million dollars overnight. It takes perseverance, patience and testing to become successful selling online.

4. They are on the consumer's side. Tread cautiously with your marketplace customers, because they are also the marketplace's customers. And the marketplaces would rather get new sellers than new buyers. New online sellers sometimes tend to overreact to unruly customers. It's important to remember that you are a business and to not take things personally.

If you have a run-in with a customer, never threaten, name-call or assign blame. Your best bet is to step back, take a deep breath, answer emails or calls professionally and politely and then attempt to solve the issue at hand. Your goal is to stop action by the customer with the marketplace, such as negative feedback or opening a dispute. It is better to work with, and appease, the customer than to fight the marketplace over negative feedback and buyer/seller disputes.

On the other hand, you may not want to become overly friendly with your buyers, which may become a time sink and, over time, can lead to a relationship where the buyer feels a sense of entitlement.

5. Don't spread yourself too thin. You've read all the online advice for sellers, you've got the book and your to-do list is longer than your grocery list. You are on Facebook, Twitter and Pinterest and have spent all day "socializing". However, you neglected to ship items or list new items.

As a new seller, it's important that you practice good time management and focus on becoming skillful at your daily tasks first. Marketing via social media should take second place to your marketplace endeavors. When new online sellers spread themselves too thin, they tend to give up because they are frantically trying to do everything, and seem to fall farther and farther behind without achieving their expected results.

6. You must reinvest to grow. If your initial investment is $1,000 and you "make" $1,500, you are left with only $500 to either pay yourself or reinvest. It's critical to set goals and reinvest your profits back into your business until you achieve those goals. While you need to pay yourself enough to survive, initially having adequate inventory and sourcing additional products is a high priority.

Before you begin selling, determine your goals and reinvest until you reach a specific milestone. Disbursing your profits should only be done when you are able to purchase and restock comfortably.

7. Document your process. Online sellers do not perform the same tasks every day, and it's important to document processes to ensure that you don't have to relearn a task that you learned a month ago. For example, a seller may only take pictures once a month, and having your camera setting, lighting and uploading process documented prevents you from having to "relearn" each time. Eventually, you can archive your notes, but initially, you'll want to document everything to save time in the learning curve and make it quicker to have employees take over.

8. Have a backup plan. It's important for new sellers to have a backup plan in place in case you are unable to fulfill orders, upload tracking numbers or reply to customer emails. Your buyers and the marketplace(s) you sell on don't care if you are running a fever and can't get out of bed to send a package. They don't care if your kitchen gets flooded or your Internet connection is taken out by a storm.

Since it's not unreasonable to think you may become ill or be otherwise indisposed at some point during the year. Having a spouse or partner who can assist when you are unavailable can be a business-saver. If you've documented your processes, someone can "take over" the priority tasks. Go through the planning like you're filling out "emergency contact" information at the doctor's office.

9. Understand your competition. It is important as a new online seller to do some competitive research. Much of e-commerce is price-based and you'll want to make sure you can price your items competitively. It will be difficult to compete against another seller who is selling your widget for less than you pay wholesale, so it's critical when you source to make sure you can be competitive.

Taking time to view your competition critically will give you insights into how you should (or should not) price and market your items. This goes back to understanding your costs and should be done before you order your inventory.

10. Automate to grow. There is a school of thought that you need to grow your business before you can automate your business. However, you can't grow your business when you are so bogged down with repetitive tasks that you have no time to think, let alone source new products or invest time in methods that will increase your sales.

Bottom line - unless you automate, you will be held back from growing.

Investigate services that provide automation tools for sellers and look for the types of automation that can serve as your "second" employee, such as automating tracking numbers, sharing inventory across marketplaces, automating feedback and customer communications.

These 10 tips might seem harsh in comparison to bogus claims that you can make a million dollars overnight selling online. However, you can make earn a great deal of revenue as an online seller if you understand that it takes time, energy, effort and streamlining to get there. Work smart, jealously guard your time and you'll be on your way to being your own boss.

:: Create a local presence wherever you want to do business. Get a local phone number. ::


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19 comments

Roberto Carlo 07-09-2013 12:57 AM

That is something harsh if you get banned by wrong image size. On the whole, a huge number of people are getting too much benefits from these marketplaces. You need to compromise with something when looking for huge benefits.

Web Design Firm 07-09-2013 4:59 AM

Crystal thanks for the great article. Your best piece of advice is "Don't expect overnight results"

Hostels Barcelona 07-09-2013 5:39 AM

thanks for the great article! I've learned a lot of info with the post!

ThomasH 07-09-2013 7:39 AM

From experience eBay is a very expensive way to sell a product line but it can be a very cost effective way to grow a business. Just be prepared to cut your eBay strings as soon as you have a viable web business up and running.

Kenneth Glick (EEI) 07-15-2013 1:30 PM

Many businesses that sell on eBay or Amazon do so expecting to lose money but hope to make it up via adding names to their e-mail list or simply through putting their name in front of potential customers, even if they don't buy or build something.

To duong vat 01-21-2014 1:19 AM

Selling online means you have a lot of rivals "anonymous". An adventure if you keep boasting that you are the best. Instead, practice getting used to the competition and learn to not be subjective

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Competition is not the desired one, but it will help you a stronger, more developed

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