Selling goods for others, consignment selling, is the fastest-growing business segment on eBay.
Over 80,000 sellers have registered for eBay’s trading assistant program.
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If you can find people who are willing to give you something to sell without your paying for it unless it sells, then you have created an unstoppable money machine. With this business you get the inventory in your hand before you sell it, but your inventory is free.
Think about this a moment: What is the biggest problem eBay sellers face? It’s finding goods to sell on eBay that they can buy at a low enough cost to make a profit. What could be better than the consignment business? There is no investment in merchandise. If an item sells, you make a profit with little or no investment—or risk. If it doesn’t sell, you simply call the consignor up and ask them to come and pick up their goods. So, simply put, if you can find enough good merchandise to sell, this is a win-win business. The consignor ends up getting more for their merchandise than they could get from a garage sale or by selling it in a local auction, and you make a commission with little or no risk to you beyond the eBay listing fees. Assuming you know how to sell on eBay, and you can handle the administrative and bookkeeping side of this business, you really can’t lose as long as you find a steady supply of people with merchandise to sell.
Let’s explore the ways to do this.
Marketing Your Business:
Marketing your business or, put another way, selling your service is the key to success in the eBay consignment opportunity. This includes all forms of advertising, networking, and public relations. Marketing is a continuous process. If you stop marketing, you will stop growing. How you plan to market your services is the most important part of your business plan. The money you spend on marketing will most likely be the largest single category of expense you have after rent and labor.You should spend your marketing dollars very carefully. Make sure you test every advertisement for effectiveness before running it again. Always start small. Most advertising venues such as newspapers, magazines, and radio will give you large discounts for signing up for a program instead of doing just one or two ads. This is highly negotiable, however. My standard answer to an advertising salesperson is “I will buy three spots (or ads) and test them. If they work, I will sign up for a larger program. If I go ahead with the larger program, I want you to credit my first three ads with the program discount.” Because advertising is very competitive, the sales rep will agree to this most of the time. If he doesn’t, then talk to his competitor first before making a decision.
Advertising is probably the easiest way to build a clientele. Advertising takes many forms and has a wide variety of costs, depending on the reach and frequency of the advertising you do. The great thing about advertising is that you can start small, reinvest your earnings, and grow with very little financial risk. Avoid the temptation to jump in and commit to a large program. Test your ads first in small papers and journals, before spending large sums to advertise in larger publications.
Starting out, local advertising is probably your best source of merchandise. I stress the word “local.” This is a relevant term. If you live in a small town (under 100,000 population), you can take out a classified ad for very little money (usually under $15). If you live in New York City or Los Angeles, a classified ad in the major newspapers can cost over $50. If I lived in New York City and were starting out on a small budget, I would forgo the New York Times and place an ad in one of the neighborhood journals, such as the West Side Journal. On the other hand, in a small town I could afford to advertise in the largest newspaper.
There are also plenty of small publications such as the Ad Server, Little Nickel, and so on. These are very inexpensive to advertise in.
If you take your business to a higher level with employees and/or a storefront, then you will be able to afford advertising in the major newspapers.
Here is an example of a classified ad that I have used with success:
Make money selling your valuable goods on eBay. We do all the work for you. We photograph the items, list and launch the auctions, collect the money and ship the goods. We sell art, antiques, collectibles, computers, small electronics and good quality clothing, jewelry and accessories. Call 206-555-7777
Here are some shorter ads that also work:
1/ I will sell your items on eBay. Low fees. Call Skip at 306-555-5555
2/ Professional eBay Seller will get Top Dollar for your valuable goods Low fees, quick payment 703-555-5555
3/ eBay Seller works for you. Get Top Dollar for your antiques and collectibles. 212-444-4444
Local radio stations can also be very inexpensive and effective. Small local radio stations sell 30-second spots very cheaply. For example, I once purchased 25 spots for $300. One half of the spots ran in prime time. I received over 70 calls from the spots. About 20 of those resulted in acquiring merchandise to sell on eBay. Those sales netted over $6,000. What is more important, a few of the people I dealt with are still in touch with me and bring me merchandise on a regular basis.
Bulletin Boards and Posters :
Another source of advertising is local bulletin boards in supermarkets, book stores, Laundromats, senior centers, neighborhood kiosks, and so on. Yes, people actually read these. Just create a 5×7 card with the same text as the classified ads. Post as many as you can and check them on a regular basis. You can also put those little tabs with phone numbers on the bottom that people can tear off.
Cold Calling :
Lots of people sell things at garage sales that they could sell for much more money on eBay. There are hundreds of eBay power sellers who cruise garage sales, tag sales, and estate sales buying up good used items they can sell on eBay for three or four times the cost. If you want to sell on consignment, however, getting to the sale when it opens is too late.Instead, try this: On Wednesday or Thursday, get a list of sales from your local paper. Go to the house and knock on the door and explain what you do and offer to look at what they are selling to see if you could get more money for them on eBay. If you are too shy to do this, you could also just prepare a short note or a flyer explaining what you do and either drop it off on their door or send it in the mail timed to arrive a couple of days before the sale.Another source of cold-calling is dropping into small antiques and collectible stores.
Today a lot of dealers are already selling on eBay themselves, but I know a few dealers who want to sell more on eBay but just don’t have the time. There are other, old-fashioned dealers who have never tried eBay and probably never will. These people are very approachable. eBay and the soft economy of the past few years have been cutting into their sales, and many small antique dealers are struggling. Your efforts can really help some of these small-town dealers stay in business.You can do this with any business, but the advantage of antiques and collectibles is that they are usually higher priced than most used goods.
Another technique I use is to visit estate sales and garage sales at the end of the day just before they close. Sometimes people have things that wouldn’t sell, because either there is no local market or they priced them too high for a garage sale. Often you can sell these items at a higher price on eBay.
You should volunteer to speak before community groups such as the Lions Club, Rotary, the senior center, chamber meetings, and so on. Give a talk about “How to sell on eBay.” This will help get your name out in the community. Your talk should not be a sales pitch for your services, but you can mention what you do at the end of your talk and most groups will let you hand out business cards or flyers.
Join your local Chamber of Commerce, where you can meet bankers, attorneys, and local business owners. The best way to meet and develop a relationship with these folks is to volunteer for some of the committees, such as the speaker committee or dinner committee, or else for events the chamber sponsors. This will bring you in close contact with other members and people will look upon you as someone who really cares rather than someone who joined the chamber just for the business contacts.
As a chamber member, you will also be allowed to advertise in the chamber newsletter or magazine and will have a directory of all the members that you can use for direct mail.
As you will be dealing with business people you will want to look business-like. This doesn’t mean you have to wear a suit. The corporate casual look is very acceptable. Nice slacks, a blouse or shirt and perhaps a blazer if you are speaking to a group, or meeting a business owner, will work fine.
Creating a Presentation Book:
Prepare and carry a presentation book (or a “pitch book” as it’s called by salespeople). Buy a three-ring notebook and plastic sleeves that hold an 8″ × 10″ sheet of paper.
Prepare inserts as follows:
* Facts about eBay
* Facts about you (feedback status, power seller status, years of eBay experience, and so on)
* A screen shot of your feedback page with comments
* Examples of common items selling on eBay
* Some screen shots of successful auctions you have completed
* Your fee schedule
* A list of local references
You should also carry extra copies of your fee schedule, your flyer or card, and a consignment contract to leave at the end of the meeting.Practice giving your presentation until you can give a concise “pitch” in about ten minutes. You will be reading upside down (people seldom sit side by side in a business meeting), so you will need to memorize what you want to say about each page.Your presentation should be concise, informative, and to the point. When you get to the end of your presentation, don’t forget to ask for the business. Do not say something lame such as “Well, what do you think?” Instead say something along the lines of, “Mr. Jones, do you have any merchandise that you would like me to try selling for you?” Or you might say, “Mrs. Brown, would you like to give me a couple of items to test-market for you before making a final decision?”
If you take one thing away from this article, it should be that consignors will not beat a path to your door. It is not enough to announce to the world that you are in business. You have to proactively go out and look for consignors. I would try all of the techniques listed here. Over time, you will learn which ones work best for you and your particular market.