Internet Auctions on a Hosted Site Gives You Access to a Vast Global Marketplace
When you enter the world of Internet auctions you need an online store. Select something to sell that you can buy wholesale, one that few stores sell, one with a good profit potential, and one that you have a special interest in.
Setting up an online store through an established shopping portal like EBay is a great Internet business model to embrace if you are new to selling hard goods online. It's a good way to get your feet wet, and it will be easier and take less work than trying to set up an ecommerce store if you are just starting out.
In the World of Internet Auctions You Need a Profitable Niche
When starting an online store, having an interest in your product makes it easier to spend the necessary time developing a specialized knowledge, and can lead to a niche.
Paradoxically, it's a good idea not to get too attached to your idea so you are free to put what your market wants first. Whatever you decide to sell, research your idea to make sure it will be profitable before you conduct your first Internet auction. When you are in the process of choosing a niche, use eBay’s “Completed Listings” to find out how much product is being sold in the niche you are considering.
If you offer your own product while starting an online store, you will make you more money; but this can be a slow and arduous road if your product isn’t developed yet. It’s much easier and quicker to start out reselling products that you buy at wholesale prices, and develop your own line later if you want to. As a new store owner, when starting out in Internet auctions, it’s best to pick one product with a good selection, and sell it faster, better, more cheaply and more creatively than anyone else.
Defining Your Customer
When you open an online store, know which type of customer you are selling to. Customers buy online for two reasons, convenience or cost. The first type of customer is more affluent, and willing to pay for convenience. For example, this customer will pay more than it costs in a grocery store for a specialty gift basket because it is hassle free and arrives on time. In this situation, an efficient fulfillment system will be important to your success as an Internet auctioneer.
The second type of customer wants it cheaply, and does a cost comparison to find the best bargain. This situation can be a boon to the shop owner who, when starting an online store, can afford to sell items with a lower profit margin than the bigger players can. In this case, finding a
will be critical when starting an online store. Wholesale dropshippers buy all their stock directly from the manufacturer or importer, thus cutting out the middleman—allowing you to sell cheaply.
Starting an Online Store Through a Shopping Portal
A major consideration when starting an online store is whether you will have your own storefront, or will set up a store using someone else’s server and technology. EBay is the granddaddy of all shopping portals. Two others are Shopping.com and ShopZilla. Selling this way is a form of revenue sharing. You'll pay a small upfront fee and a percentage to the “landlord” when you sell something.
Entering auctions this way, you avoid much of the risk: warehousing product and shipping, the high cost of paying a web developer and designer, an online marketing company, ongoing maintenance, and dealing with security concerns. This frees you to administer your store while still maintaining control over your offerings.
Internet Auctions and Marketing
Marketing will also be important when you open an online store. You market by showing photos of your products . . . a good digital camera is critical! . . . and by offering product reviews and buying tips to your customers. Also, send e-mail newsletters to inform shoppers of your special deals. This is a great sales technique, as is offering previous buyers special discounts. Remember when starting an EBay business, that EBay keeps a customer list for you for a period of time, and you’ll want to download it periodically in order to keep it updated. You'll need an e-mail autoresponder that will help you to send your newsletter.
Finally, don’t forget to monitor what your competitors are doing. How does their inventory compare to yours? How is their display? What kind of sales are they running? As newcomer to the world of Internet auctions, you owe it to yourself to do this competitive intelligence . . . And when you put yourself on their mailing list, you’re doing your homework.
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